whole lot along in here to me, same as if they were a manner of landin'-net. And sure wasn't I moidherin' her every night of me life to be sendin' me some company? 'Deed was I so, and be the same token ne'er a word of thanks have I thought of sayin' to her, after her takin' the throuble to conthrive it that-away, more shame for me, but I was that tuk up wid it all." "Thrue for you, Mrs. Martin, ma'am," said Mrs. Brennan ;- "aiten bread 's soon forgotten, as the sayin' is. Howane'er there's nothin' liker than that that was the way of it as you say. What else 'ud be apt to make it go clamber all round the image of her, as if 'twas her belongin'? And didn't the gintleman tell you 'twas nothin' that grows be rights next or nigh this counthry? Ah, for sure 'tis from far enough it's come, if 'twas the likes of them sent it. And a kind thought it was too, glory be to God." in providing the strong black tea with From Macmillan's Magazine. THE FOUNDERS OF THE BANK OF ON July 24th, 1694, a charter was first granted by Parliament to the Bank of England; and thus one of the most remarkable of our national institutions completes this year the second century of its history. A vast amount of criticism has lately been lavished on the bank not by any means from the historical or antiquarian point of view alone, but rather indeed with reference to its actual relations towards the commerce and finance of to-day. It is not our intention to discuss that criticism, which, whether justified or not, is inevitable in view of the position held by the bank in our money-market; we wish rather to recall some of the salient points of its earlier story, and especially to consider the circumstances of its origin. Probably the most severe of its recent censors, reviewing the two hundred years during which the Bank of England has played a prominent part in the political and social economy of the country, would not deny that it has been distinguished among the financial institutions of the world for the patriotic loyalty of its attitude in crises of the national history, Mrs. Martin's theory gained almost unanimous approval, and was generally accepted by her neighbors, Father Gilmore sanctioning it with a half wistful assent. It had the effect of enhancing the interest taken in the flourishing creeper and the little withered dame, the pledge and recipient of so signal a favor from those who are still the recognized powers that be in such places as Clonmacreevagh. The idea gave a tinge of religious sentiment to the soon established custom of visiting Mrs. Martin, and on the weekly market-days you often might have supposed some kind of miniature pattern in progress at her cabin, so great was the resort thither of shawled and cloaked and big-basketed country-wives. These for the indispensable assistance it has guests seldom came empty-handed -a rendered to successive governments, couple of fresh eggs, or a roll of butter, and the succor it has afforded to our or a cake of griddle-bread would be re- commerce in times of disturbance and served for her at the bottom of the panic. Although, strictly speaking, it roomy creel. Other visitors were fain is not a government institution, its to carry off slips of the many trailing course has almost invariably been desprays, and would leave payment for termined not by any narrow view of the them in silver coin, which sometimes private interests of its stock-holders, had the comfortable portliness of half- but by larger considerations in which crowns. But I do not believe that the the general welfare has been paralittle old woman valued these very mount. An ordinary acquaintance with highly, and I think most of them went the history of the last two centuries is ful claim; while freedom of trade and a sound currency, essential factors in our economic and social progress, owe much to the clear demonstration of principles which then proceeded from the vigorous minds of Locke and Newton. Precisely the same qualities which appeared in the administration of national affairs, were shown in the clear understandings and steady prudence of the men who established a system of banking which in its leading features has seen little essential change from that time to the present. all that is necessary to indicate the | In many vital matters the reign of character of these services, and to William the Third marked a dividing show how constantly the enormous line between ancient and modern ways. financial transactions of the nation It gave a Parliamentary basis to the have been made easy by the resources monarchy, established the power of of this great establishment. It is man- the House of Commons, and originated ifest that only such resources could the idea of a homogeneous Cabinet and have sufficed for the scale of the na- a responsible ministry, laying thus the tional finance in periods like those of foundations of our political liberty. William the Third's Continental cam-Religious toleration is another notable paigns or of the long struggle with conquest to which the closing years of Napoleon, not to speak of the vari- the seventeenth century can lay rightous restorations of the coinage, or the wholesale conversion of the debt. Moreover, the commanding position of the Bank of England, though modified inevitably by the rise of great banks around it and by the vast increase in our trade, has not been radically altered. Notwithstanding the development of joint-stock banking during the present century, a development that has more than kept pace with the growing wealth and commerce of the country the enormous mass of the bank's paid-up capital, the caution of its methods, and the success with which it has throughout avoided the more serious risks of business have given it a claim to the first place as yet unapproached by any rival institution. But perhaps at this point we touch the a vast expenditure, and the means had fringe of some recent controversies. To come then to our immediate purpose, the early history of the bank will repay, we think, a brief study. It is the story of a great experiment boldly carried out amidst extraordinary difficulties. That the success of the Bank of England was immediate and permanent, is a testimony both to the public necessities which it met, and to the skill and prescience of its founders. The period in which the bank arose is one of the heroic ages of English history. The energy and vitality of the nation have never shown themselves more unmistakably than in the period of the Revolution. The great questions which then demanded settlement were solved as only great men could solve them, and it is to this period we have. to trace some of the most important principles affecting the political and social life of our own time. The bank took its rise directly from the necessities of the government. The great struggle with France, to which William's whole life was devoted, could not be maintained without to be obtained sometimes by methods that were felt to be exceedingly troublesome and humiliating. These terms were certainly applicable, if not to the raising of money by lotteries, at any rate to the practice to which the lords of the treasury resorted, of "going, cap in hand, with the lord-keeper to raise a loan among the thriving citizens." It was, therefore, when the government saw the prospect of immediate assistance to be derived from a public bank, that the project, to use a modern phrase, came within the range of practical politics. Various schemes of the kind had been drawn up many years earlier, and had from different causes failed; one of these was considered by Cromwell's government in the year 1658. Quite as pressing, however, as the necessities of the administration, were the requirements of a rapidly develop - ing commerce. It was plain to the only such a proportion of them as they merchants of London that these were found needful to meet daily demands, not adequately met by the existing a varying quantity which experience system of banking. Not only were would speedily enable them to gauge the goldsmiths, in whose hands the with fair exactness. "It was this pracfinancial business then rested, extor- tice," says Thorold Rogers, " which tionate in their terms, but, from the distinguished the theory and habit of insufficiency of the capital at their dis- banking in England from its earlier posal, insolvency was not infrequent types in foreign countries." It is pracamong them to the grievous loss and tically certain, also, that long before often to the ruin of their customers. 1694 the experience of the goldsmith The petty operations of Lombard Street and his customers had taught them in the seventeenth century must often the utility of bank-notes and cheques. have been compared very unfavorably The free use of cheques, which effects with the vast scale and well-proved so vast an economy in our currency, stability of the great Continental banks. is to this day a feature distinguishWhen the Bank of England was at length established, it took such a form as proved how beneficial had been the long period of preliminary discussion; a form which rendered it of far greater practical utility to the commerce of the country than if it had been made, as some at first proposed, a servile copy of the public banks already existing in Europe. In his "Wealth of Natious," Adam Smith gives a full description, though not from his own pen, of the most famous of these, the Bank of Amsterdam. We there learn that like two older institutions, the Banks of Venice and Genoa, it was a bank of deposit merely. It received, we read, "both foreign coin and the light and worn coin of the country, at its real intrinsic value in the good standard money of the country, deducting only so much as was necessary for defraying the expense of coinage, and the other necessary expense of management," and the balance was placed to the credit of the depositing merchant. The latter was thus enabled to pay his bills as they fell due, in "bank money" of which the value was certain. This was no doubt an inestimable advantage to commerce; but it did not cover what we now understand as the functions of a banker. The Bank of Amsterdam did not trade with its deposits or any part of them. A wholly different practice had already rooted itself in English banking, for the goldsmiths did not pretend to keep unused in their hands the balances of their customers, but ing the English banking system from better criterion of the shrewdness of the commercial community of that day could be desired than the respective issues of these two undertakings. pray pay unto Charles Duncombe, Esq., | for the government; the amount which or order, the sum of four hundred was actually subscribed by the public pounds, and place it to the accompt of to the foolish project was £2,100. No your assured friend, WINCHESTER. To Captain Francis Child, near Temple Barre." This was a remarkably close approach to modern usages, and it was too valuable a reform to be lost. If, At its first establishment the inexpeindeed, a public bank had been pro- rience of its founders was by no means jected on the foreign model, it would, the worst peril which the bank had to although of narrower utility than that encounter. It was surrounded by enewhich was eventually established, have mies whose opposition arose partly served a useful purpose as a place of from political, and partly from selfish safe deposit, the want of which was motives. The goldsmiths, in whose then keenly felt. To provide such a hands the banking of London, such as place was beyond the resources of the it was, had developed into a most goldsmiths, while the action of both profitable trade, were naturally disCharles the First and his successor had posed to set every obstacle in their demonstrated that money deposited rival's way. They contended that an either in the mint or in the exchequer institution on so large a scale was was liable to be arbitrarily borrowed, likely to assume the control of all finanor confiscated, by the king. Those who projected the Bank of England had thus two precedents or models to guide them, and they may be said to have combined the advantages of both, for with the massiveness of the great foreign institutions they united the freer practice of the Lombard Street goldsmiths. When at length, in June, 1694, the scheme was placed before the public, the necessary capital was forthcoming with what must have appeared in those times a startling rapidity. Three days after the books were opened more than half was provided, and a week later, on Monday, July 2nd, the full amount of £1,200,000 was subscribed. It was manifest that the plan, which had met with SO much opposition in both Houses of Parliament, commanded at least the enthusiastic support of the city, where its merits could best be judged, and where alone could be found the funds to carry it to a successful issue. Very different was the fate which two years later befell the rival scheme of Chamberlain's Land Bank. By its specious promises of universal prosperity it took both government and Parliament captive, but fell dead before the common sense of the moneyed classes. The Land Bank undertook to raise a loan of £2,564,000 128 LIVING AGE. VOL. III. cial business to a degree most threatening to the common interests of the country, and to attain so much power as would give to it a dangerous authority and influence even with the national government. They pretended to foresee that as soon as it was firmly established, it would so raise the rate of interest as to cripple industry, while filling its own coffers by usury. And in this there was no doubt some reason, for many of them had grown wealthy by the very methods they now denounced. Some of them employed their means freely in endeavors to embarrass the bank, and their plots were occasionally successful enough to bring their new rival into danger. One of the most unscrupulous of its enemies was Sir Charles Duncombe, who had lately purchased a magnificent estate out of the profits of his own banking business. On one occasion he is said to have sold his entire holding of bank stock, amounting to £80,000, in order to discredit its reputation, and, some years later, to have conspired with others to create a run by collecting and presenting on one day £300,000 in notes of the bank. Another section of its foes consisted of the promoters of rival schemes. These plots ended in failure, but they were only foiled by troublesome and expensive expedients. The real danger in these crises arose | ties of mutual interest. If the former from the exceedingly limited reserve of had succumbed to its enemies and cash which the bank retained to meet James had returned, the latter might its outstanding notes. An account consider its capital as good as lost. On presented to the House of Commons in this ground, therefore, as well as from December, 1696, showed a debt on a genuine attachment to the principles notes issued, and on money deposited of the Revolution, its founders threw or borrowed, approaching £2,000,000, themselves with ardor into the Whig while the amount held against it in cause, and spent their resources lavactual money was no more than ishly in support of it. A political bias £36,000. The lesson had not yet been was absolutely inevitable in so imporlearned, that a bank must not rest con- taut an institution at such a crisis. tent with being actually solvent, but Burnet touches on the matter with his must hold its resources in a sufficiently usual shrewdness. "It was visible," liquid form to enable it to meet large he says, "that all the enemies of the and sudden demands with absolute government set themselves against the promptitude. It was evident here, as bank with such a vehemence of zeal a pamphlet of the day ingeniously and that this alone convinced all people accurately expressed it, that "the that they saw the strength that our bank confounded the credit of their affairs would receive from it." Burstock with the credit of their cash." net's criticism confirms the natural inference that the line of political cleavage, which was never more strongly marked at any period of our history, was also the line which divided the friends of the bank from its foes. The credit of successfully combating the opposition thus arising from many quarters, is in great part due, Thorold Rogers shows, "to those honest, Godfearing, patriotic men who watched over the early troubles of the bank, relieved it, by the highest shrewdness and fidelity, from the perils it incurred, and established the reputation of British integrity." But among its founders it is possible to distinguish two or three leading spirits, who in their different spheres contributed mightily to its success, and were admirable representatives of the financial and commercial skill of their time. But the bank had other enemies besides those to be found in the trading community. It was regarded from the first as a Whig institution, and a bulwark of the settlement of 1689. The merchants of the City, whose confidence and support were the strength of the bank, were the Nonconformists and Liberals of the time. It was natural enough, therefore, that an institution which was thus committed to the side of the existing government should have been hated by those who would have rejoiced to see that government overthrown. The instinct which prompted the fervent opposition of the Jacobites was a sound one, as was clearly proved before the new bank had been long in existence. The loan of £1,200,000 to the government, in consideration of which the charter was granted, was only the first of many By the general consent of tradition important services to King William. the principal share in the original It was in itself an immense gain to scheme of the Bank of England is to have a strong and wealthy corporation be credited to William Paterson, a which might be resorted to by a needy | native of Tinwald in Dumfriesshire. treasury, in place of the petty expedi- Paterson is unfortunately best remements which had hitherto prevailed; and bered as the projector of the disastrous even in the first half-dozen years of its scheme for the colonization of Darien, course the bank had many opportuni- and his reputation has suffered accordties to give substantial proofs of its ingly. But even Macaulay, in his undevotion to the cause of the king. In sparing criticism of that wild venture, fact, the government and the bank has not denied its projector great natwere bound together by the strongest ural intelligence, a perfect knowledge |