CURIOSITIES OF THE BANK OF ENGLAND.
Considering the world-wide reputation of the Bank of England, it is remarkable how little is generally known as to its internal working. Standing in the very heart of the largest city in the world—a central landmark of the great metropolis—even the busy Londoners around it have, as a rule, only the vaguest possible knowledge of what goes on within its walls. In truth, its functions are so many, its staff so enormous, and their duties so varied, that many even of those who have spent their lives in its service will tell you that, beyond their own immediate departments, they know but little of its inner life. Its mere history, as recorded by Mr Francis, fills two octavo volumes. It will be readily understood, therefore, that it would be idle to attempt anything like a complete description of it within the compass of a magazine article. There are, however, many points about the Bank and its working which are extremely curious and interesting, and some of these we propose briefly to describe.
The Bank of England originated in the brain of William Paterson, a Scotchman—better known, perhaps, as the organiser and leader of the ill-fated Darien expedition. It commenced business in 1694, its charter—which was in the first instance granted for eleven years only—bearing date the 27th July of that year. This charter has been from time to time renewed, the last renewal having taken place in 1844. The original capital of the Bank was but one million two hundred thousand pounds, and it carried on its business in a single room in Mercers’ Hall, with a staff of fifty-four clerks. From so small a beginning has grown the present gigantic establishment, which covers nearly three acres, and employs in town and country nearly nine hundred officials. Upon the latest renewal of its charter, the Bank was divided into two distinct departments, the Issue and the Banking. In addition to these, the Bank has the management of the national debt. The books of the various government funds are here kept; here all transfers are made, and here all dividends are paid.
In the Banking department is transacted the ordinary business of bankers. Here other banks keep their ‘reserve,’ and hence draw their supplies as they require them. The Issue department is intrusted with the circulation of the notes of the Bank, which is regulated as follows. The Bank in 1844 was a creditor of the government to the extent of rather over eleven million pounds, and to this amount and four million pounds beyond, for which there is in other ways sufficient security, the Bank is allowed to issue notes without having gold in reserve to meet them. Beyond these fifteen million pounds, every note issued represents gold actually in the coffers of the Bank. The total value of the notes in the hands of the public at one time averages about twenty-five million pounds. To these must be added other notes to a very large amount in the hands of the Banking department, which deposits the bulk of its reserve of gold in the Issue department, accepting notes in exchange.
All Bank of England notes are printed in the Bank itself. Six printing-presses are in constant operation, the same machine printing first the particulars of value, signature, &c., and then the number of the note in consecutive order. The paper used is of very peculiar texture, being at once thin, tough, and crisp; and the combination of these qualities, together with the peculiarities of the watermark, which is distributed over the whole surface of the paper, forms one of the principal guarantees against imitation. The paper, which is manufactured exclusively at one particular mill, is made in oblong slips, allowing just enough space for the printing of two notes side by side. The edges of the paper are left untrimmed, but, after printing, the two notes are divided by a straight cut between them. This accounts for the fact, which many of our readers will doubtless have noticed, that only one edge of a Bank-note is smooth, the other three being comparatively ragged. The printing-presses are so constructed as to register each note printed, so that the machine itself indicates automatically how many notes have passed through it. The average production of notes is fifty thousand a day, and about the same number are presented in the same time for payment.
No note is ever issued a second time. When once it finds its way back to the Bank to be exchanged for coin, it is immediately cancelled; and the reader will probably be surprised to hear that the average life of a Bank-note, or the time during which it is in actual circulation, is not more than five or six days. The returned notes, averaging, as we have stated, about fifty thousand a day, and representing, one day with another, about one million pounds in value, are brought into what is known as the Accountant’s Sorting Office. Here they are examined by inspectors, who reject any which may be found to be counterfeit. In such a case, the paying-in bank is debited with the amount. The notes come in from various banks in parcels, each parcel accompanied by a memorandum stating the number and amount of the notes contained in it. This memorandum is marked with a certain number, and then each note in the parcel is stamped to correspond, the stamping-machine automatically registering how many are stamped, and consequently drawing immediate attention to any deficiency in the number of notes as compared with that stated in the memorandum. This done, the notes are sorted according to number and date, and after being defaced by punching out the letters indicating value, and tearing off the corner bearing the signature, are passed on to the ‘Bank-note Library,’ where they are packed in boxes, and preserved for possible future reference during a period of five years. There are one hundred and twenty clerks employed in this one department; and so perfect is the system of registration, that if the number of a returned note be known, the head of this department, by referring to his books, can ascertain in a few minutes the date when and the banker through whom it was presented; and if within the period of five years, can produce the note itself for inspection. As to the ‘number’ of a Bank-note, by the way, there is sometimes a little misconception, many people imagining that by quoting the bare figures on the face of a note they have done all that is requisite for its identification. This is not the case. Bank-notes are not numbered consecutively ad infinitum, but in series of one to one hundred thousand, the different series being distinguished as between themselves by the date, which appears in full in the body of the note, and is further indicated, to the initiated, by the letter and numerals prefixed to the actual number. Thus 25/O 90758 on the face of a note indicates that the note in question is No. 90758 of the series printed on May 21, 1883, which date appears in full in the body of the note. 69/N in like manner indicates that the note forms part of a series printed on February 19, 1883. In ‘taking the number’ of a note, therefore, either this prefix or the full date, as stated in the body of the note, should always be included.
The ‘Library’ of cancelled notes—not to be confounded with the Bank Library proper—is situated in the Bank vaults, and we are indebted to the courtesy of the Bank-note Librarian for the following curious and interesting statistics respecting his stock. The stock of paid notes for five years—the period during which, as before stated, the notes are preserved for reference—is about seventy-seven million seven hundred and forty-five thousand in number. They fill thirteen thousand four hundred boxes, about eighteen inches long, ten wide, and nine deep. If the notes could be placed in a pile one upon another, they would reach to a height of five and two-third miles. Joined end to end they would form a ribbon twelve thousand four hundred and fifty-five miles long, or half-way round the globe; if laid so as to form a carpet, they would very nearly cover Hyde Park. Their original value is somewhat over seventeen hundred and fifty millions, and their weight is about ninety-one tons. The immense extent of space necessary to accommodate such a mass in the Bank vaults may be imagined. The place, with its piles on piles of boxes reaching far away into dim distance, looks like some gigantic wine-cellar or bonded warehouse.
As each day adds, as we have seen, about fifty thousand notes to the number, it is necessary to find some means of destroying those which have passed their allotted term of preservation. This is done by fire, about four hundred thousand notes being burnt at one time in a furnace specially constructed for that purpose. Formerly, from some peculiarity in the ink with which the notes were printed, the cremated notes burnt into a solid blue clinker; but the composition of the ink has been altered, and the paper now burns to a fine gray ash. The fumes of the burning paper are extremely dense and pungent; and to prevent any nuisance arising from this cause, the process of cremation is carried out at dead of night, when the city is comparatively deserted. Further, in order to mitigate the density of the fumes, they are made to ascend through a shower of falling water, the chimney shaft being fitted with a special shower-bath arrangement for this purpose.
Passing away from the necropolis of dead and buried notes, we visit the Treasury, whence they originally issued. This is a quiet-looking room, scarcely more imposing in appearance than the butler’s pantry in a West-end mansion, but the modest-looking cupboards with which its walls are lined are gorged with hidden treasure. The possible value of the contents of this room may be imagined from the fact that a million of money, in notes of one thousand pounds, forms a packet only three inches thick. The writer has had the privilege of holding such a parcel in his hand, and for a quarter of a minute imagining himself a millionaire—with an income of over thirty thousand per annum for life! The same amount might occupy even less space than the above, for Mr Francis tells a story of a lost note for thirty thousand pounds, which, turning up after the lapse of many years, was paid by the Bank twice over! We are informed that notes of even a higher value than this have on occasion been printed, but the highest denomination now issued is one thousand pounds.
In this department is kept a portion of the Bank’s stock of golden coin, in bags of one thousand pounds each. This amount does not require a very large bag for its accommodation, but its weight is considerable, amounting to two hundred and fifty-eight ounces twenty pennyweights, so that a million in gold would weigh some tons. In another room of this department—the Weighing Office—are seen the machines for detecting light coin. These machines are marvels of ingenious mechanism. Three or four hundred sovereigns are laid in a long brass scoop or semi-tube, of such a diameter as to admit them comfortably, and self-regulating to such an incline that the coins gradually slide down by their own weight on to one plate of a little balance placed at its lower extremity. Across the face of this plate two little bolts make alternate thrusts, one to the right, one to the left, but at slightly different levels. If the coin be of full weight, the balance is held in equipoise, and the right-hand bolt making its thrust, pushes it off the plate and down an adjacent tube into the receptacle for full-weight coin. If, on the other hand, the coin is ever so little ‘light,’ the balance naturally rises with it. The right-hand bolt makes its thrust as before, but this time passes harmlessly beneath the coin. Then comes the thrust of the left-hand bolt, which, as we have said, is fixed at a fractionally higher level, and pushes the coin down a tube on the opposite side, through which it falls into the light-coin receptacle. The coins thus condemned are afterwards dropped into another machine, which defaces them by a cut half-way across their diameter, at the rate of two hundred a minute. The weighing-machines, of which there are sixteen, are actuated by a small atmospheric engine in one corner of the room, the only manual assistance required being to keep them supplied with coins. It is said that sixty thousand sovereigns and half-sovereigns can be weighed here in a single day. The weighing-machine in question is the invention of Mr Cotton, a former governor of the Bank, and among scientific men is regarded as one of the most striking achievements of practical mechanics.