Mother Ceprano behaved in a most amiable and polite manner to her future son-in-law, who, by Lucia’s advice, determined to let the little property at Palenella and allow his mother-in-law the rent of it for her life. Also he made up his mind to sell his business in Palene and have a nice barber’s shop and small café in Rome, where he and Lucia would do their utmost to please their customers.

Three weeks later the marriage was celebrated with much firing of guns and rockets in the presence not only of the whole village, but of most of the inhabitants of the town of Palene, and there was every reason to hope that it would prove a happy one, in spite of the strange way in which bride and bridegroom had been brought together.—Belgravia.

[THE BANK OF ENGLAND.]
BY HENRY MAY.

The simple definition of banking is money-dealing. A banker properly so called is but a tradesman engaged in buying and selling money, that symbol of wealth which in all civilised countries facilitates or renders possible the exchange of commodities, which are wealth itself. A banker produces nothing, nor does he, except in a most indirect manner, add anything to the wealth of the country. His business is the collection and distribution of that general representative of merchandise, money, much in the same way as an ordinary shopkeeper collects and distributes the special articles of his individual trade. Joint-stock banks, then, are but co-operative distributing associations formed for the purpose of fighting against some real or fancied oppression, and of competing, to the supposed advantage of the public, with private enterprise. They are formed for the purpose of competing with private bankers whose business they appear to be gradually absorbing, possibly by a sort of process of the survival of the fittest. In this way the origin, in 1694, of the Bank of England, the parent joint-stock bank of the kingdom, and the largest and most important money-dealing institution in the world, may be traced to the combination of the Government, merchants, traders, and the general public to oppose the exactions, usury, and financial tyranny of the goldsmiths and stock-jobbers of the period. A very limited acquaintance with pamphlets published at the time of the Great Revolution will show that the Bank of England was the natural outcome of necessity, a necessity which guaranteed its success if honestly and prudently managed. Through its means the foundation of a safe paper currency was secured, the national credit maintained, and the system of usury and extortion prevalent throughout the country undermined—at the expense, it is true, of many so-called bankers, stock-jobbers, and goldsmiths, but to the great gain of the nation, its commerce, and the general public. Of the originator of the Bank of England—Mr. W. Paterson, who remained a director only for a year or two—we know really very little, except that he was equally the founder of the ill-fated Darien Expedition of 1698, that he was an able, honorable, and enthusiastic man, and that he died in Scotland, where, “pitied, respected, but neglected,” he lived for many years.

The original capital of the Bank was £1,200,000, which was subscribed in a few days. The whole of this amount was, as a condition of the charter, lent to the Government at eight per cent., the Bank being allowed an additional £4,000 a year for the management of the Government accounts. The necessary capital for carrying on the banking business appears to have been obtained from the public by the issue of bank bills, termed by some flippant writers of the period “Speed’s notes,” from the name of the first chief cashier. These bills were evidently a sort of “deposit receipt,” bearing interest at the rate of twopence per cent. per diem, or at the rate of three per cent. per annum, and they appear to have given sore offence to the goldsmiths. The Bank of England commenced business in the Mercers’ Hall, Cheapside, where the first “General Court of Proprietors” was held. But after a few months, this situation being found inconvenient, an agreement was made with the Grocers’ Company (which appears to have been in difficulties) for the use of their hall in Princes Street. The original working staff of the Bank consisted of fifty-four clerks, whose united salaries amounted to the modest sum of £4,340 a year, averaging a little more than £80 a year each. The chief cashier (Mr. T. Speed), the chief accountant, and the secretary received £250 a year each, and one clerk is scheduled in the pay-sheet as working “gratis.” Addison, in No. 3 of the Spectator, gives us the following pleasant little glimpse of the Bank at work in 1710: “In one of my late rambles, or rather speculations, I looked into the great hall where the Bank is kept, and was not a little pleased to see the directors, secretaries, and clerks, with all the other members of that wealthy corporation, ranged in their several stations, according to the parts they act in that just and regular economy.” From which it would seem that the Bank dignitaries of old had a firm belief in the virtues of the “master’s eye,” scorned bank parlors and private rooms, and were content to work with their servants coram populo—a good, homely, old-fashioned practice, no doubt, but one scarcely adapted to modern banking requirements. Bank of England directors in those days, however, had a good deal more to do with mere clerical duties than they have at present. They by no means shirked the most practical responsibilities of office, for we find that at that period, and for many years afterwards, even the warrants for the payments of dividends were signed by two of their body.

It was not until after the Bank had existed some forty years that the directors found the business so completely outgrow the accommodation afforded by the Grocers’ Hall as to necessitate a separate building of its own. The foundation of the present building was laid in 1732 on the site of the residence of Sir John Houblon, the first governor of the Bank, and business was commenced in the new premises in 1734. The edifice was greatly enlarged between the years 1770 and 1786, and was completed, pretty much as it now stands, in 1786, an Act having been procured in 1780 to enable the directors to purchase the adjoining church, land, and parsonage—in fact the whole parish—of St. Christopher le Stocks, to the rector of which non-existent parish the Bank pay £400 a year to this day. The drawing office now stands on the site of the old church, the garden being the churchyard. In 1800, when Princes Street was widened, the present wall-screen round the Bank was erected by Sir John Soane giving a uniform appearance to the exterior of the building. There is much in the architectural interior of the Bank which is well worthy of admiration; for instance the quadrangle called the bullion-yard, in Lothbury, the garden, rotunda, and court rooms, &c. The long prison-like stone-colored passages and offices devoted to public business, however, are singularly cold and cheerless, owing chiefly to some apparent, yet unaccountable, objection of the authorities to employ color as a decorative auxiliary; possibly from a fixed but mistaken idea that color is antagonistic to cleanliness and brightness to business.

Although the necessities of the State contributed to the establishment of the Bank of England, they were, at intervals of every few years, compelled, after making a feeble resistance, to purchase the continuance of their privileges on exceedingly onerous terms. The history of the seven renewals of the charter between 1694 and 1800, and of the accordance of permission to increase the capital of the Bank, is one continuous record of State exactions. The Bank, as a condition of State patronage, were on each successive occasion forced to increase their loans to the Government at low rates of interest or without any interest whatever, three millions sterling being lent for six years without interest in 1800. Interest on previous loans was reduced, exchequer bills were cancelled, and on one occasion a free gift of £110,000 was made to the State. As a consequence the Government debt to the Bank increased at a rapid rate, till it amounted at last to upwards of fourteen and a half millions sterling, or rather more than the whole capital of the Corporation. In 1833 the Government paid off one-fourth of this debt in reduced annuities, and thereby reduced it to £11,015,100, at which amount it now stands. While Ministry after Ministry thus accurately tested the pliability of the “Governor and Company,” and relentlessly preyed on their fears as to the continuance of their monopoly, it is pleasant to read of the intense feeling of loyalty which actuated the directors in all their dealings with the State. When, after the Rebellion of 1715, the Government proposed to reduce the interest on the National Debt from six to five per cent., the Bank testified to their desire to assist the measure by at once agreeing to accept the lower rate, and to provide money to pay off those creditors who declined to submit to the reduction. Again, when a further reduction in the interest on part of the National Debt was proposed in 1750, the Bank at once assented, and arranged to find a sum of money to pay off the dissentients. The passive attitude lately assumed by the Bank directors towards the conversion scheme of the present Chancellor of the Exchequer contrasts somewhat unfavorably with the loyal attachment of the Bank to the State in olden times. The transactions of the Bank of England with Government for a period of one hundred and twenty years ending with 1816 are but a series of loans and advances by the Bank in anticipation of the revenue, or of payments of treasury bills drawn by the Government agents abroad. These large advances and payments were entirely independent of the permanent loan made to the Government by the Bank, and were supposed to be but temporary assistance rendered to the State in times of sore need, to be repaid periodically as the revenue was collected. But repayment was not made. Again and again did the Governor and Company represent to the Ministers that they were unable to continue to increase the floating debt without endangering the safety of the Bank. Coaxed and bullied in turn (especially by Pitt), they allowed their loyalty to outrun their prudence, and yielded more or less gracefully time after time, till at last in 1797 they were compelled to suspend cash payments, entirely through their exertions to aid the Government. Undoubtedly the exclusive privileges which the Bank in the infancy of banking enjoyed were in some sense a quid pro quo for their services to the State, and the fear of losing their charter may have been a strong incentive to loyalty. The subsequent gradual enfranchisement of banking by the various enactments between 1826 and 1858 and the enormous progress which banking has since made throughout the country, have, however, considerably lessened the value of these privileges, and from a mere proprietor’s point of view it is quite possible that the Bank of England might profitably forego their charter altogether, now that they are in no fear of losing it, and, so far as pure banking is concerned, they no longer enjoy a monopoly. These considerations may have tempered the loyalty of the directors, and may account for the very independent fashion in which they nowadays approach the Government for the transaction of business upon which, in the olden time, they were accustomed to enter with fear and trembling.

The establishment of branches by the Bank of England in 1826 was a direct consequence of the great panic of 1825, caused, as the Government alleged, by reckless speculation encouraged and fostered by private banks, and by the overissue of country bank notes. In a correspondence with the Bank, the Government expressed their determination to “improve the circulation of the country paper,” and, after paying the Bank the complement of saying, “We believe that much of the prosperity of the country is to be attributed to the general wisdom, justice, and fairness of the dealings of the Bank,” suggested that the Bank of England should establish branches of their own in different parts of the country, and should, moreover, yield part of their exclusive privilege of joint-stock banking by permitting the formation of banks with more than six partners, except in or within sixty-five miles of the metropolis. After a vain attempt to obtain some compensation for the concession of their monopoly for joint-stock banking the Bank yielded on both points, and an Act was passed authorising the establishment of Bank of England branches and the formation of country joint-stock banks. The circulation of one and two pound notes was also prohibited by this Act.

The Bank charter was again renewed in 1833, when Bank of England notes were first made a legal tender, and the usury laws repealed so far as they affected three months’ bills. The most important clause in this charter, however, was that which legalised the establishment of joint-stock banks in and within sixty-five miles of London. This led to the establishment of the London and Westminster Bank in 1834, the first of those numerous metropolitan joint-stock banks which now so extensively and beneficially administer to the commercial wants of the country. Up to about this time it had been universally considered that the Bank of England enjoyed the exclusive privilege of joint-stock banking within the above radius, but now the astonishing discovery was made that this was not so, and in fact never had been so; and this discovery was confirmed by the law officers of the Crown. The directors protested, but resistance was useless. The Bank lost its supposed privilege, though it is very questionable whether the Government behaved quite straightforwardly in the matter. This Act, together with one or two subsequent banking Acts, thus completely enfranchised banking, and abolished a monopoly which was, after all, obstructive both to financial and commercial progress. The abolishment of any monopoly is invariably but a question of education and time, and, in accordance with the doctrine of experience, it does not appear that the Bank have really lost anything by the competition engendered by the enfranchisement of joint-stock banking, while commerce and the community have undoubtedly gained enormously.