The Bank of England – 1694 – Part I

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We had a ‘dig’ around in our library on the history of the Bank of England and discovered this interesting article which we will publish in several parts over the next few days – its from the book London – Volume 3 published in 1824 by Sholto and Reuben Percy – Brothers of the Benedictine Monastery.

Read other posts in this series on the Bank of England

Read other posts in the London series

The Bank of England – 1694

It was an observation of the father of political economists,  Dr. Adam Smith, that ‘the stability of the Bank of England is equal to that of the British government’ and the history of this establishment has proved that the remark is just: it is an institution whose welfare is so intimately connected with that of the state, that they must stand or fall together; not that the State is dependent on the bank which it enriches, but that the obligation and services are reciprocal. The bank is the agency house through which the government pays the greatest portion of-its creditors, allowing a liberal sum as a compensation for the trouble, which has of late years been somewhat reduced in amount.

The origin of the banking system has been traced by more than one historian to the time of Pharoah, when Joseph gathered all the money in Egypt to the house of his master, thus manifesting a partiality for the precious metals which the descendants of his tribe and nation have preserved unimpaired to the present day. Among the moderns Venice, the cradle of European commerce, was the first to form one of those institutions, which have since been found so advantageous to its progress. The first bank in this flourishing republic was established so early as the twelfth century, when a bureau, called the Chamber of Loans, was opened for receiving the deposits of a forced contribution, which the pressing necessities of the republic rendered necessary, and paying the interest of four per cent. Such was the origin of the first national bank in Europe, which continued to flourish until the invasion of France, in 1797, when the independence of this republic was overthrown.

Venice was so much in advance of the other states of Europe in commerce, that it was long before her example was followed. Amsterdam was the next, but the bank was not established there until the year [1609]. London was still later in adopting so excellent an institution, the Bank of England not having been established until the year 1694. Not that the merchants of London were ignorant of the principles of banking, for considerable business had long been carried on in that line by private individuals, particularly the Lombard merchants. It has already been stated, [vol. 1.] p. 323.) that the goldsmiths were the first regular bankers in London, and it exhibits a singular instance of what may be termed the longevity of prosperous commerce, that the descendants of the first two bankers still carry on the business, and that, too, where they first commenced. In an old tract, printed in [1675], entitled “The Mystery of the new-fashioned Goldsmiths or Bankers discovered,” the adoption of banking in England is attributed to the distrust which was generated in the reign of Charles I, when the merchants and tradesmen, who before trusted their cash to their servants and apprentices found it no longer safe to do so; neither did they dare to leave it in the Mint at the Tower, on account of the distress of majesty itself.  It is, however, rather to be wondered at, that banks were not established long before, than that they were only adopted in the year [1645]. The first regular banker in London was Mr. Francis Child, a goldsmith, who kept a shop in Fleet-street, Temple-bar, where the business of the respectable firm of Messrs. Child and Co. is still carried on. The next bankers were Messrs. Snow and Denne, whose shop is said to have been a few doors west, and on or near the site of the banking house of Messrs. Snow and Paull.

Excerpt from London Volume 3 1824 by Sholto and Reuben Percy – Brothers of the Benedictine Monastery

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Further reading and external links

The Bank of England on Wikipedia 

The Bank of England Archives