Rutland weekly herald. [volume] (Rutland, Vt.) 1859-1877, 1873-10-23
Ene B nk Of England.
By JOHN ARBUCKLR.

BY JOHN ARBUCKLE.
The reader knows that the Bank OF
England was founded in 1894, but it is
not SO generally understood that the
state Of things which made the bank
possibly dates from as far back as 1911
. The credit of the English government
| had always been tolerably good until
| under the Cabal administration of
Charles H., it was almost destroyed by
an act of gross perfdy. The credit of
the state was, in old times, better than
any other credit. and the goldsmiths,
who then were the only bankers, used
to give their money to the government
to take care Of. This money Charles
III. refused to pay back TO them, and the
goldsniths were ruined. Thus the goose,
/ English credit, which had always laid
the golden egg, was killed by these fool
ish or wicked ministers The state could
borrow no more money. .......
T In 1894 William Ill, who was then on
. the throne, Was going TO war with
France, and he greatly needed money.
had it not been that the credit of the
English government was so poor, the
money might have been raised without
appeal TO what was then considered by
many to be a desperate and rcvolutiona-
ny scheme There was fierce Opposition
. To the bank on the part of the lords, who
! considered it a strengthening of the IA IN
eyed power at the expense of the landed
interest But the money had To be
/ raised; the need was SO urgent that the
+ arisiocraCy We're compelled to sacrifice
I the class 'scrupies and interests
: The Inventor of this scheme was vii
lian Patterson, Scotchman by birth
aud q West Indian by residence. the
/ West IHdiGS friends. said he had been
| missionary his enemies that he had been
! a buccanecr lie was an ingenious and
I ardent person, gifted with great powers
/ of persuasion. The scheme which he
had first proposed IN 1891, he succeeded
| three years later in getting the great
! Montague TO take up.
The plan was simply that the govern.
i.ment should borrow twelve hundred
/ thousand pounds ats per cent, which
| was then a very moderate rate, aud
which would have hcen very favorable
to the borrowers. In order to INDUCE
/ capitalists to advance, the Subscribers
were TO be incorporated into company
to be called The Governor and Conn
pany Of the Bank OF England There
! was much fierce opposition, but the
dream Of the obscure advGnturer soon.
I became a solid fact
{ This was the origin of that greet ia
stituti0n, which is now the greatest
moneved power in the world, and which
Z was for many years the blllMark of the
! English Government During the wars.
lin which. France was endeaVoring to
! force the Pretender back uponthe throne,
/ It was the bank which supplied the
7 government with money. Had France
I succeeded, of course the new king would.
have refused TO pay interest on money
| which was spent in resisting him. The
bank was therefore greatly interested in.
unfolding the existing government 1t
was, through some generations q Wing
! institution. 1854 ~ -E-#.s. .f
SO important apart has the Bank of
! England played in history that it is diff
! ficult for US to understand that it is a
/ private and not state establishment
| 1t is like any other bank, except that
the government has granted it some
| privileges and lnmunities. These are
three. In the first place, the govern
| ment balances are in the possession of.
| the Bank of England, The Bank or
I iginally gave credit to the government,
| as we have seer, but now the govern
| hlent gives credit to the bank. Men are
! inclined to follow the example of a gov
eminent, and &c believe that it is wiser
than. they. Phey think that if the gov
1 eminent trusts its great balance to the
! bank, they may surely trust their small
ones there. ..# IL.
In the second place, the bank had till
recently monopoly Of the principle of
! limited liability. Here we are SO used
4 to the idea thSt the stockholders of q
/ bank when,th3 bank fails are liable for
I only the amount of their stock, that it
is difficult to understand how English
men. can have regarded this limited liza
4 bility as wrong. A bank would have to
/ go begging 4 good while for stockhold-
ers and directors in this country if its
failure woald. involve the entire private
/ fortunes Of its owners. The English.
i have always thought it right that the
Bank. of England should be an excep-
ton. This immunity was of great help
to the bank, as it induced. many careful
merchants to be directors who would
not hare consented to serve had their
fortunes been liable. - :if,..s
t The third privilege of the Bank of
England is, that it is. the only bank.
which can issue notes. Before 1914 it
was only joint stock eompanyth that could
issue notes. Private bankers might, and
indeed did SO until about 1860, but the
bank gradually forced them out of the
fisld. Legally, however, they might
i have issued notes up to 1874, when. the
. privilege was taken away, But no Joint
/ stock company except the Bank of Eng
land has ever been permitted to issue
to, have the right of exclusive banking"