It seems doubtful how far the London citizens in the Saxon times could claim the right to elect kings. The latest and best historian of this period seems to think that the Londoners had no special privileges in the gemot; but, of course, when the gemot was held in London, the citizens, intelligent and united, had a powerful voice in the decision. Hence it arose that the citizens both of London and Winchester (which had been an old seat of the Saxon kings) "seem," says Mr. Freeman, "to be mentioned as electors of kings as late as the accession of Stephen. (See William of Malmesbury, "Hist. Nov.," i. II.) Even as late as the year 1461, Edward Earl of March was elected king by a tumultuous assembly of the citizens of London;" and again, at a later period, we find the citizens foremost in the revolution which placed Richard III. on the throne in 1483. These are plainly vestiges of the right which the citizens had more regularly exercised in the elections of Edmund Ironside and of Harold the son of Cnut.
The city of London, there can be no doubt, soon emancipated itself from the jurisdiction of earls like Leofwin, who ruled over the home counties. It acquired, by its own secret power, an unwritten charter of its own, its influence being always important in the wars between kings and their rivals, or kings and their too-powerful nobles. "The king's writs for homage," says a great authority, "in the Saxon times, were addressed to the bishop, the portreeve or portreeves, to the burgh thanes, and sometimes to the whole people."
Thus it may clearly be seen, even from the scanty materials we are able to collect, that London, as far back as the Saxon times, was destined to achieve greatness, political and commercial.
CHAPTER XL
THE BANK OF ENGLAND
The Jews and the Lombards—The Goldsmiths the first London Bankers—William Paterson, Founder of the Bank of England—Difficult Parturition of the Bank Bill—Whig Principles of the Bank of England—The Great Company described by Addison—A Crisis at the Bank—Effects of a Silver Re-coinage—Paterson quits the Bank of England—The Ministry resolves that it shall be enlarged—The Credit of the Bank shaken—The Whigs to the Rescue—Effects of the Sacheverell Riots—The South Sea Company—The Cost of a New Charter—Forged Bank Notes—The Foundation of the "Three per Cent. Consols"—Anecdotes relating to the Bank of England and Bank Notes—Description of the Building—Statue of William III.—Bank Clearing House—Dividend Day at the Bank.
The English Jews, that eminently commercial race, were, as we have shown in our chapter on Old Jewry, our first bankers and usurers. To them, in immediate succession, followed the enterprising Lombards, a term including the merchants and goldsmiths of Genoa, Florence, and Venice. Utterly blind to all sense of true liberty and justice, the strong-handed king seems to have resolved to squeeze and crush them, as he had squeezed and crushed their unfortunate predecessors. They were rich and they were strangers—that was enough for a king who wanted money badly. At one fell swoop Edward seized the Lombards' property and estates. Their debtors naturally approved of the king's summary measure. But the Lombards grew and flourished, like the trampled camomile, and in the fifteenth century advanced a loan to the state on the security of the Customs. The Steelyard merchants also advanced loans to our kings, and were always found to be available for national emergencies, and so were the Merchants of the Staple, the Mercers' Company, the Merchant Adventurers, and the traders of Flanders.
Up to a late period in the reign of Charles I. the London merchants seem to have deposited their surplus cash in the Mint, the business of which was carried on in the Tower. But when Charles I., in an agony of impecuniosity, seized like a robber the £200,000 there deposited, calling it a loan, the London goldsmiths, who ever since 1386 had been always more or less bankers, now monopolised the whole banking business. Some merchants, distrustful of the goldsmiths in these stormy times, entrusted their money to their clerks and apprentices, who too often cried, "Boot, saddle and horse, and away!" and at once started with their spoil to join Rupert and his pillaging Cavaliers. About 1645 the citizens returned almost entirely to the goldsmiths, who now gave interest for money placed in their care, bought coins, and sold plate. The Company was not particular. The Parliament, out of plate and old coin, had coined gold, and seven millions of half-crowns. The goldsmiths culled out the heavier pieces, melted them down, and exported them. The merchants' clerks, to whom their masters' ready cash was still sometimes entrusted, actually had frequently the brazen impudence to lend money to the goldsmiths, at fourpence per cent. per diem; so that the merchants were often actually lent their own money, and had to pay for the use of it. The goldsmiths also began now to receive rent and allow interest for it. They gave receipts for the sums they received, and these receipts were to all intents and purposes marketable as bank-notes.
Grown rich by these means, the goldsmiths were often able to help Cromwell with money in advance on the revenues, a patriotic act for which we may be sure they took good care not to suffer. When the great national disgrace occurred—the Dutch sailed up the Medway and burned some of our ships—there was a run upon the goldsmiths, but they stood firm, and met all demands. The infamous seizure by Charles II. of £1,300,000, deposited by the London goldsmiths in the Exchequer, all but ruined these too confiding men, but clamour and pressure compelled the royal embezzler to at last pay six per cent. on the sum appropriated. In the last year of William's reign, interest was granted on the whole sum at three per cent., and the debt still remains undischarged. At last a Bank of England, which had been talked about and wished for by commercial men ever since the year 1678, was actually started, and came into operation.