A fresh scheme, Feb., 1694.
When the House re-assembled in November (1693) the City again presented a petition in terms[pg 582] similar to their former petitions. The petition having been referred to a committee of the whole House that committee reported (17 Feb., 1694) to the following effect,[1792] viz., that (1) a rent-charge of £8,000 per annum should be set aside out of the City's revenues towards payment of interest due to orphans, (2) that the City should be permitted to raise a sum not exceeding £2,000 per annum upon personal estates in the city to satisfy the orphans' debts, (3) that the patentees of a new kind of glass light known as convex lights[1793] should contribute an annual sum of £600, (4) that an additional duty of 4d. per chaldron should be imposed upon coal entering the port of London and 6d. per chaldron on coals imported into the city for a term of fifty years commencing from the determination of the duty already existing in respect of re-building St. Paul's, (5) that an additional duty of 4s. should be laid on every tun of wine entering the port of London, (6) that the improvements about to be made in the water supply of the city[1794] should also contribute, and lastly (7) that every person bound apprentice in the city should contribute 2s.6d., and every person made free of the city 5s. towards the same object.
City Orphans' Act passed, March, 1694.
A Bill[1795] was subsequently introduced embodying these resolutions, but with an additional proviso that[pg 583] when the tax of 6d. per chaldron on coals, to be imposed for a term of fifty years, should cease the City's lands should be charged with an annual sum of £6,000 over and above the rent-charge of £8,000 previously mentioned. The Bill was read the first and second time on the 22nd February, and the third time on the 12th March. A few days later (21 March) it passed the Lords without amendment, and on the 23rd received the royal assent.[1796]
City loan of £200,000, 6 March, 1694.
On the 6th March (1694) the lord keeper came to the Guildhall, accompanied by the lords of the treasury, to ask the Common Council for a loan of £200,000, upon security of the land tax, for naval and military purposes. The court at once assented, and before the end of the month the whole amount had been paid into the exchequer.[1797] The money was raised in the usual way from the inhabitants of each ward and from the livery companies. The Corporation itself was by no means well off, and encouragement was given to anyone who could suggest a means whereby the City's revenues could be increased.[1798] Recourse was had, among other things, to nominating for sheriff the least suitable men for the office, and such as would prefer paying the fine to serving. In no other way can one reasonably account for the fact that the fines for refusing to undertake the office of sheriff amounted for this year (1694) to over £5,000.[1799]
The foundation of the Bank of England, April, 1694.
This loan was but as a drop in the ocean compared with the necessities of the times. The estimates for the year 1694 were enormous. The army, which was already the largest standing force that England had ever seen, was to receive a large increase, whilst considerable sums of money were required for payment of arrears, no less than for the future expenses, of the navy. Notwithstanding the renewal of the land tax, the imposition of a poll-tax, the revival of stamp duties, and the raising of a million of money by a lottery loan, there yet remained a large deficit before the estimated revenue of the year balanced the estimated expenditure. At this juncture Charles Montague, poet, politician and savant, took up a scheme propounded to government three years before by William Paterson, an enterprising if not always successful Scotsman, but allowed to drop. This scheme was none other than the formation of a national bank. The idea was not altogether a new one. Before the close of the reign of Charles II several plans of the kind had been suggested, some being in favour of establishing such a bank under the immediate direction of the Crown, whilst others were of opinion that its management should be entrusted to the Corporation of the city. It was now proposed to raise the sum of £1,200,000 for the use of the government by way of loan at eight per cent. interest, the subscribers being incorporated by the name of the Governor and Company of the Bank of England. The matter was introduced into parliament for the first time on the 28th March, in the shape of a Bill for granting their majesties certain tonnage duties on wine, ale and other liquors.[1800][pg 585] Although it was not easy to recognise in the terms of the Bill the germ of "the greatest commercial institution that the world had ever seen,"[1801] it met with considerable opposition in the House, and still more outside. With their recent experience of the evils arising from a rich and powerful body like the East India Company, men were cautious in allowing a Corporation to be erected in their midst which, as many feared, would absorb the wealth of the nation,[1802] and might render the Crown independent of parliament and people. This last consideration was not unimportant, and, in order to avert the possibility of such a danger, a clause was inserted in the Bill forbidding under the severest penalties the new Corporation advancing money to the Crown without the authority of parliament.[1803] Subject to this and other conditions the Bill passed the Commons, and on the 24th April was agreed to by the Lords.[1804]
At the head of the Commission, issued under the Great Seal for the establishment of the new bank, stood the name of the lord mayor, Sir William Ashurst; and out of the twenty-four original directors at least four rose to be chief magistrate of the city, whilst others are known to have taken an active part in the affairs of the municipality.[1805] In the city the undertaking met with a success beyond all expectation. The very first day (21 June) that the subscription lists were opened at Mercers' Hall nearly £300,000 was received, and[pg 586] within a week that amount was doubled. Sir John Houblon, who succeeded to the mayoralty the following year, and became the first Governor of the Bank, subscribed £10,000, the largest amount any one individual was allowed by the terms of the charter to subscribe before the first day of July. The same amount was subscribed by the lords of the treasury on behalf of the queen. By mid-day of the 2nd July the whole of the money (£1,200,000) had been subscribed and the books closed.[1806] The Great Seal was put to the bank charter, and business was commenced in the hall of the Grocers' Company.
Hitherto, as we have seen, the city of London had always acted (as indeed it claimed to be) as the king's Chamber, and the occupier of the throne of England for the time being had never hesitated to draw upon this Chamber whenever he was in need of money. The mode of procedure was nearly always the same. The lords of the treasury would appear some morning before the Common Council, and after a few words of explanation as to the necessities of the time, would ask for a loan, offering in most cases (we are bound to confess) undeniable security. Supposing that the Council agreed to raise the required loan, which it nearly always did, the mayor for the time being was usually instructed to issue his precept to the aldermen to collect subscriptions within their several wards, whilst other precepts were (in later times at least) sent to the master or wardens of the livery companies to do the same among the members of their companies. There were times, also, when the[pg 587] companies were called upon to subscribe in proportion to their assessment for supplying the city with corn in times of distress.[1807] Times were now changed. Instead of applying to the City for an advance in case of need, the king thenceforth drew what he required from the Bank of England. During the remainder of his reign William only applied twice to the City for a loan: once, towards the close of 1696, when he required money for the army and navy, and again in 1697, when it was necessary to pay off his continental allies and lay up the navy after the peace of Ryswick (10 Sept.).[1808] The City, in its corporate capacity, was no longer to be the purse of the nation.