[Illustration: THE BANK OF ENGLAND.] THE STORY OF THE Bank of England (A History of English Banking, and a Sketch of the Money Market) BY HENRY WARREN AUTHOR OF "YOUR BANKERS' POSITION AT A GLANCE" ETC. JORDAN & SONS, LIMITED 116 AND 120 CHANCERY LANE, LONDON, W.C. 1903 LONDON: PRINTED BY JORDAN AND SONS, LIMITED, 120 CHANCERY LANE, W.C. CONTENTS CHAPTER PAGE I. The Period of Monopoly, 1708 to 1826 1 II. Before and After the Act of 1844 24 III. The Bank's Weekly Return 48 IV. The Issue and Banking Departments 63 V. The Store in the Issue Department 74 VI. Weekly Differences in the Return 85 VII. The Bank as Agent of the Mint 94 VIII. The Principal Currency Drains 101 IX. Banks and the Creation of Credit 113 X. The Battle of the Banks 126 XI. The London Money Market 139 XII. The Bank Rate and Stock Exchange Securities 154 XIII. The Banks as Stockbrokers 161 XIV. The Short Loan Fund and the Price of Securities 169 XV. Panic Years 177 XVI. The Banks and the Public 224 XVII. Bank Stock 240 CHAPTER I. The Period of Monopoly, 1708 to 1826. The Bank of England, which is managed by a Governor, Sub-Governor, and twenty-four Directors, was incorporated in 1694 at the suggestion of a Scotsman, William Paterson, a man of roving disposition, whose Darien expedition proved a miserable fiasco, cost Scotland some £400,000, and shattered the health of Paterson, who died in London at the beginning of 1719, if not in poverty at least stripped of nearly all his fortune. Schemes relating to the Isthmus of Darien (or Panama), that narrow little strip of land which unites the two Americas, have proved fruitful in disaster. France's great canal venture, we all remember, resulted in huge loss and grave scandal; and Paterson lived to bitterly regret his colonisation scheme, devoutly wishing that he had pinned his faith to his finance company, the Bank of England, for a finance company it then was in every sense of the word.