BANK OF ENGLAND.

Star (Christchurch), Issue 10536, 10 August 1912, Page 1

BANK OF ENGLAND.

N:tos Prom Its History.

No other banking institution has so romantic a history as that pertaining to the Bank of England, "The Old Lady of Threadneedle Street." The founder of the bank was William Paterson, an adventurous Scotchman, who, it was said, at one time of his life had controlled every privateer that sailed the Spanish Main. Paterson laid the foundation of his fortune in the buying and selling of slaves and the clearing of one hundred thousand

pounds sterling as his share of the gold found on a sunken Spanish galleon. It seems to be agreed that it was with these funds and those derived from his buccaneering expedition that Paterson, who had been banished.,to Holland by James 11., financed, in part, the-expe-dition of the Prince of Orange across the Boyne. With the advent of William 11. to the English throne came the first plans for the establishment of a national bank. Those writers who treat of the " inside history " of the times entertain no doubt that, while William 111. was indeed the moving spirit of the scheme, Paterson was nevertheless the indispensable one in the realisation thereof. He was the official mouthpiece at the weekly meeting of the famous group of financiers known as "The Wednesday Club." i

The Jacobites unavailingly denounced the bank as a revolutionary institution whereby the King would gather unto himself all the wealth of the nation. About the only concession the Tory malcontents of the day were able to extract from the Government was a law, remaining in force to this day, that tho bank might not lend money to the King or to the Government except by the consent of both Houses of Parliament.

One of the bloody episodes in the history of the bank is that embraced in the story of Charles Walter Godfrey, tho partner of Paterson. It appears that Godfrey while crossing tho Channel in the midst of a terrific storm and laden with sixty thousand pounds in drafts for the aid of King William.jwho was just then besieging Namnr, against the forcos of Louis XTV., insisted upon his right to deliver the warrant for the money into the hands of the King,' then in the trenches under hot fire. As he handed the document to the King, saying, in response to William's growl of remonstrance, "Am I, then, more exposed to danger than your Majesty?" a cannon-ball swept away his head. Not so very many years ago there stood over the massive fireplace in the directors' room of the bank three rusty specimens of the old " Brown Bess," together with a number of roughly shaped bullets. In these relics was embodied a picture of the "November night in 1780 when the mob of Gordon rioters marched down from Newgate, setting fire to every Catholic chapel on the way and advancing with a force of five thousand "upon the bank itself. The clerks, armed with muskets, were unprovided with shot. Before them lay rows of lenden ink-stands, suggesting the possibilities of a new use. In less than half an hour the inkstands had been melted and turned into bullets. The muskets were loaded. At every window of the bank stood two marksmen, their guns trained ,on the mob below. Yet the rioters came on until they were within ten yards of the bank gates. Then sharp and clear above the frightful din rose the order to fire; and from the windows poured a deadly volley. When the smoke finally cleared away two hundred and fifty lay dead or dying in the open space now covered by the esplanade of the Royal Exchange. The attacking army wavered, stopped, broke line and fled; and the Gordon riots were at an end. i

During the first part of the reign of George 11. it was the practice of all banks to give a receipt in payment of a deposit, the receipts being passed from hand to hand and serving the same purpose as the cheque of to-day. At that time Childs's Bank, a private concern, which bad the backing of a great part of the English nobility, exhibited such signs of future greatness that the Bank of England became greatlv alarmed, esneciallv in view of the fact that the "Okl Lady's" notes were at a discount of 10 per cent. So little by little, through tboir agents, the managers of the Bank of England bought up every receipt bearing the Childs signature, allowing, the collections to accumulate each year until thi? time should be ripe, during a shortage of gold, to present the receipts in one great mass for payment. Tt was deemed a certainty that Childs's would not be able to meet the demand and would thus be ruined.

The principal figure in th© drama that ensued was no other than the famous Sarah Jennings, in whom Childs's Bank found its staunchest sunporter. One night there came a wild clanging at the IHI of the great gate of the town of Blenheim—a clanging that soon wakened everyone in the A white-faced, travel-stained man staggered into the ducal hall, boging an audience with her Grace. When the Duchess, m her di-essring-gown. appearpd; demanding to know the reason for this unseemlv visitation, the man exnlained t>nt the Bank of England he'd the Childs's recants in the amount of six hundred and twenty thousand pounds, that those receipts would be presented for payment at noon following, that there was not at Childs's enough gold to meet them, that unless the demand c-""ld l.e satisfied within ei"M hours Chi'ds's was ruined and th"t thpre was hut one person in the world—her Grace—to whom they might Whereupon the redoubtable Duchess sat down and wrote out a choeoue. which she handed +o the ao-pnt. Tt wpr an order on the Bank of Finland for the navm«nt of seven hundred thousand nnnndq. H« was to te>e this cheque to t>c B-mk of Einland, and to .cji.v that if it hesitated for a single instqnt in paving it the DnchAss would proclaim it as a defaulter. At/we've oVVk that dav there apof. the 01vW<i conifer an of fV T>nnk of EprrhW hor. n 'ng n big of r«c«mt,s. fi"d hlandlv intj immediate At the same in-rnent, the OHlds'a a (rent, in Threodnecdlc vtrc»t receiving cash on the chmne of the T)uchn«i. T'-«e cashiers at vM-mW* naturellv took +h"ir nn-n time >"« «?c.rntT?mir<n- the receipts, snendinr/- f n i,„lf „„ l lrmr over the fi"«t h.ofch *lnno. Tlmvwere at the end of the fiwt hnnd—d wVu thnir am'-cd. thev o"'"koned tho r.-oe-dnro n b'HK and wiWn +o n mmntne. +!,„ n f v nf ,. land had been paid in its own coin.