by Don Jordan
Twelfthly, Their Law-Merchant, By which all Controversies between Merchants and Tradesmen are decided in three or four days time, and that not at the fortieth part (I might say in many cases not the hundredth part) of the charge they are with us.
Thirteenthly, The Law that is in use among them for transference of Bills for Debts from one man to another: This is of extra-ordinary advantage to them in their Commerce; by means whereof, they can turn their Stocks twice or thrice in Trade, for once that we can in England; for that having sold our Foreign Goods here, we cannot buy again to advantage, till we are possest of our Money; which it may be we shall be six, nine, or twelve Months in recovering: And if what we sell be considerable, it is a good man’s work all the Year to be following Vintners, and Shopkeepers for Money. Whereas, were the Law for Transferring Bills in practise with us, we could presently after sale of our Goods, dispose of our Bills; and close up our accounts. To do which, the advantage, ease, and accommodations it would be to Trade, is so great, that none but Merchants that have lived where that custom is in use, can value to its due proportion.
Fourteenthly, Their keeping up PUBLICK REGISTERS of all Lands and Houses, Sould or Mortgaged, whereby many chargable law Suits are prevented, and the securities of Lands and Houses rendred indeed, such as we commonly call them, REAL SECURITIES.
Lastly, the lowness of Interest of Money with them, which in peaceable times, exceeds not three per cent Per annum; and is now during this War with England, not above four per cent at most.
APPENDIX V:
NOTES ON THE FORMATION OF THE BANK OF ENGLAND
Throughout the seventeenth century London looked to Amsterdam for inspiration on how to manage its financial affairs. One of the benefits of a national bank was seen to be, from the Dutch model, that interest rates could be kept low. When the Bank of Amsterdam was founded in 1609 the English saw this as a way forward, but were unable to find a means of setting up their own version until after the iron hand of the Stuarts was released from the economic levers. Ironically, the very thing that London’s merchants most envied about the Dutch would only be made possible when a Dutchman became king. The Bank of England was formed in 1694, six years after William arrived with his army.
There had been many schemes for a national bank throughout the century. John Banks’s remark to Samuel Pepys that the Exchequer was too far from the Exchange was an aside to a debate that seldom went away. In 1658, Samuel Lambe, a London merchant, wrote a detailed design for a national bank and sent it to the House of Commons for consideration by the Grand Committee for Trade, setting out ‘Proposals for managing England’s economic and trade conditions’.1 Lambe could not have chosen a worse moment. The country was in turmoil and his idea was forgotten about.
In another irony, one of the reasons for a bank not being formed was that the House of Commons – whose members one would have thought of as natural allies of London’s merchant classes – did not want the King to use the bank as a means of raising money and bypassing Parliament. There was the added concern that a bank could be taken over entirely by the King, taking away any financial leverage Parliament might have had. The lessons of the Great Stop were never far away. A move to form a National Bank of Credit in 1683 came to nothing for much the same reason that previous efforts foundered: fears of the King making the bank his own and sidelining Parliament. Not everyone in the City of London was keen on the establishment of a national bank. The goldsmiths were set against it, fearing – rightly – that it could end their near-monopoly on loans. Even if it did not do so, it would undoubtedly have a severe effect on the high rates of interest they could charge.
If any one person can be said to have founded the Bank of England, it was a Scot, William Patterson.* Patterson made his money in London, trading with the slave colonies in the West Indies. Like many merchants trading overseas, Patterson was acutely aware for years that the banking system needed reform and enlargement to take account of expansion both in trade and in government. In 1691 he proposed ‘to form a company to lend a million pounds to the Government at six percent [plus £5000 “management fee”] with the right of note issue’.2 The following year his proposal was turned down by the parliamentary committee set up with the express purpose of pondering how to raise money to pay for the war with France. The reason, to quote Halley Goodman, a historian of the Bank of England, was a residual fear that permeated both sides in Parliament:
The primary political groups which were in opposition were the Jacobite supporters of the deposed King James and the landowning lories. Both groups feared that the government would be strengthened and their own influence diminished by the establishment of a national bank. The Catholic Jacobites thought that the creation of the bank would weaken France’s monarchy. The Tories, in turn, thought that the bank ‘would lead straight to socialism’ or a commonwealth. The Tories also opposed the Bank because it would strengthen King William III’s power by making it easier for him to obtain money; this would make it less likely for the House of Stuart to be restored.3
Patterson made another proposal – this time to lend the government £2 million. This also foundered, A year later, in 1693, the Commissioner to the Treasury, Lord Montagu, stepped in, suggesting Patterson try yet again. Patterson, having been bitten by political opponents twice before, took the precaution of writing a pamphlet setting out the benefits of a national bank. Despite the usual criticisms (plus a new one that the bank might allow William III to become an absolutist king like his Stuart predecessors), on 25 April 1694 Patterson’s plan was included in the Tunnage Act (also known as the Bank of England Act) and was passed by both Houses of Parliament. The act was a compendium of measures, both to raise duties and to raise money by other means, as outlined in its odd opening description:
An Act for granting to their Majesties several Rates and Duties upon Tunnage of Ships and Vessels, and upon Beer, Ale, and other Liquors, for securing certain Recompences and Advantages in the said Act mentioned, to such Persons as shall voluntarily advance the Sum of Fifteen hundred thousand Pounds towards carrying on the War against France.
In the event, the act allowed a national bank – the Bank of England – to be set up as a corporation. The sum of £1.2 million was loaned to the government, allowing William III to continue his war with France, which had begun in 1690 and continued to 1697. In fact the bank was privately run, its only client being the government. Thus the longstanding and curious relationship between governments and bankers, in which they are inexorably intertwined, was established. The bank remained in private hands until it was nationalised in 1946.
Given the current state of banking practice, with banks routinely lending many times their capital, it is interesting to note that under the rules by which the Bank of England was set up, initially its borrowing and lending could not be greater than its capital.
* Interestingly, it was an Englishman who in 1695 created the Bank of Scotland. This was John Holland, a merchant born in London in 1658. His father, a ship’s captain, was a friend of Samuel Pepys.
NOTES
1 A City of Expectation
1 John Aubrey, Brief Lives, 1715.
2 Anthony Munday, Mayoral Pagent Book, quoted in Christine Stevenson, The City and the King, 2013.
3 A.F. Wrigley and R.S. Schofield, The Population History of England, 1541-1873: A Reconstruction, 1989.
4 Fernand Braudel, The Perspective of the World, 1985.
5 John Stowe, A Survey of the Cities of London and Westminster, 1720.
6 John Milton, The Readie and Easie Way to Establish a Free Commonwealth, 1660.
7 Ibid.
8 John Downes, Roscius Anglicanus, 1708.
2 The King Comes In
1 Declaration of Breda, 1660, http://www.constitution.orgfeog/eonpur105.htm
2 Middlesex County Records, vol. 3,1625-1667.
3 Edward Hyde, 1st Earl of Clarendon, History of the Rebellion, 1702-4,
4 Samuel Pepys, Didry.
5 Charles II, Lett
ers, ed. Arthur Bryant, 1968.
6 Thomas Macaulay, The History of England, 1848.
7 Hyde, History of the Rebellion.
8 John Evelyn, Diary, vol. 1,1901, http://www.gutenberg.org/files/41218/41218-h/41218-h.htm#tn_png_290a
9 Hyde, History of the Rebellion,
10 Lucy Hutchinson, Memoirs of the Life of Colonel Hutchinson, 1806.
3 Theatrum Redux!
1 Aubrey, Brief Lives.
2 Ibid.
3 William Davenant, Madagascar with other Poems, 1638.
4 A. Nethercot, Sir William Davenant, 1938.
5 Leslie Hotson, The Commonwealth and Restoration Stage, 1928.
6 Mercurius Fumigosus, 12–19 September 1665.
7 Hotson, The Commonwealth and Restoration Stage.
8 Alison Latham, ed., Oxford Companion to Music, 2002.
9 Evelyn, Diary.
10 Don Jordan and Michael Walsh, The King’s Revenge, 2012.
11 Gilbert Burnet, A History of My Own Time, 1715.
12 Proceedings of the Old Bailey, http://www.oldbaileyonline.org
13 The Speeches and Prayers of the Regicides, Thomason Tracts, BL, 1660.
14 Evelyn, Diary,
15 Hyde, History of the Rebellion.
4 Something for Everyone?
1 Pepys, Diary.
2 Aristotle, Politics, Book I.
3 Quoted in Benjamin A. Rifkin, Human Anatomy, Five Centuries of Art and Science, 2005.
4 Giraldus Cambrensis, Topographia Hibemica, 1187.
5 PRO SP 29/5 74.
6 Ibid.
7 PRO SP 29/5 74.1.
8 John Bold, John Webb, Architectural Theory and Practice in the Seventeenth Century, 1989.
9 Sir William Sanderson, Compleat History of the Life and Raigne of King Charles, 1658.
10 Margaret D. Whinney, ‘John Webb’s Drawings for Whitehall Palace’, Proceedings of the Walpole Society, vol. 31,1942–3,1946.
11 Aubrey, Brief Lives.
12 Anthony Wood, Anthenae Oxonienses, 1813.
13 PRO SP 29/5 74.
14 Lisa Jardine, On a Grander Scale: The Outstanding Life of Christopher Wren, 2002.
15 W.H. Kelliher, DNB.
16 BL Add. MS27962,17 January 1661.
17 Hotson, The Commonwealth and Restoration Stage.
18 Christopher Wren, Parentalia, 1750.
5 Rivals
1 Geoffrey Smith, ‘Long, Dangerous and Expensive Journeys: the Grooms of the Bedchamber at Charles II’s Court in Exile’, Early Modern Literary Studies 15, 2007; BL, Copy of a Letter Written by Mr Thomas Killigrew, Manuscript 27402, fos. 691—71V.
2 Venetian State Papers.
3 CSP Dom, 1660–1.
4 G.E. Bentley, The Jacobean and Caroline Stage, 1941; 1968.
5 Downes, Roscius Anglicanus.
6 Edward A. Langhaus, ‘The Theatres’, in The London Theatre World 1600–1800, ed. Hume, 1980.
7 PRO; Admiralty Papers of the Navy Board.
8 George Frederick Zook, The Company of Royal Adventurers, 1919.
9 Pepys, Didry.
10 Richard Ligon, A True and Exact history of the Island of Barbadoes, l657
11 Trans-Atlantic Slave Trade Database, Emory University, www.slavevoyages.org
12 Ibid.
6 The Crowning of a King
1 Peter Earle, The Making of the English Middle Class, 1989.
2 Raphaelle Schwartzberg, Becoming a Goldsmith in the Seventeenth Century, LSE Working Papers 141/10, Department of Economic History, LSE 2010.
3 Richard Grassby, The Business Community of Seventeenth Century England, 1995.
4 John Evelyn, Fumifugium, 1661.
5 Mark Jenner, The Politics of London Air: John Evelyn’s Fumifugium and the Resforation, 2013.
6 Evelyn, Fumifugium.
7 Stowe, Survey of the Cities of London and Westminster.
8 Ibid.
9 Anon., In Praise of the choice company of philosophers and witts who meete on Wednesdays weekely at Gresham College, Ashmolean MSS, reprinted in Notes and Records of the Royal Society of London, vol. 5, 1948, attrib. William Godolphin,
10 David Scott, Leviathan; The Rise of Britain as a World Power, 2013.
11 John Ogilby, The relation of his Majestic’s entertainment passing through the city of London, 1662.
7 ‘Too Great an Honour for a Trifle’
1 John Wallis, Account of Some Passages of his Life, 1700.
2 John Evelyn, letters on 3 and 29 September 1659, in Diary.
3 J.A. Bennett, The Mathematical Science of Christopher Wren, 1982,
4 Ibid.
5 Jardine, On a Grander Scale.
6 Ibid.
7 Ibid.
8 Francis Bacon, New Atlantis, 1627.
9 Robert Hooke, Folio, MSS Royal Society, www.livesandletters.ac.uk/cell/Hooke/Hooke.html
10 Robert Boyle, Collected Works, 1772.
11 Henry Power, Experimental Philosophy, 1663.
12 Robert Boyle, New Experiments Physico-Mechanicall, touching the Spring of the Air, and its effects, made in the most part using a New Pneumatical Engine, 1660.
13 Anon., In Praise of the Choyce Company of Philosophers and Witts.
14 Hooke, Folio.
15 House of Lords Journal, 5 September 1660.
8 Foreign Adventures
1 Pepys, Diary.
2 Figures extrapolated from The Trans-Atlantic Slave Trade Database.
3 CSP Dom, quoted in Liza Picard, Restoration London, 1997.
4 Pierre Mignard, Louise de Kérouaille, Duchess of Portsmouth, National Portrait Gallery, London, NPG497.
5 Mercurius Publiais, 30 May 1662.
6 Charter of Carolina, 1663, http://avalon.law.yale.edu/17th_century/nco1.asp
7 Wren Society Papers, Oxford, vol. 13,1924–43.
9 Trade Wars
1 figures extracted from the Trans-Atlantic Slave Trade Database.
2 http://higherpraise.com/outlines/text_misc_cs/article4056.html
3 Trans-Atlantic Slave Trade Database.
4 William Davenant, Macbeth, 1674; Christopher Spencer, ed., Five Restoration Adaptations of Shakespeare, 1965.
5 Thomas Mun, England’s Treasure by Foreign Trade, written 1628, pub. 1664.
6 Edward Misseiden, Free Trade, or The Meanes to Make Trade Flourish, 1622.
7 Thomas Mun, A Discourse of Trade from England Unto the East-Indies, 1621.
8 Mun, England’s Treasure.
9 Evelyn, Diary.
10 G.F. Steckley, ed., The Letters of John Paige, London Merchant, 164–858, London Record Society 21,1984.
11 An Act for Increase of Stopping, and Encouragement of the Navigation of this Kingdom, October 1651,
12 An Act for Conpnntog an Act Entituled an Act for Encouraging and Increasing of Shipping and Navigation, etc., 1661.
13 Burnet, A History of My Own Time.
14 Calendar of Manuscripts of Marquis of Bath, HMSO 1980, https://archive.org/stream/calendarofmanusco5bath/calendarofmanusco5balhdjvu.txt
10 A New World of Science
1 J.G. Marcus, A Naval History of England, vol. 1, 1961.
2 Evelyn, Fumifugium.
3 Robert Hooke, Micrographia, 1665, BL C.175.e.8.
4 Ibid.
5 Joseph Glanvill, Plus Ultra, 1668.
6 Francis Bacon, Instaumtio Magna, The Oxford Francis Bacon, 2000.
7 Philosophical Transactions of the Royal Society, vol. 1,1665.
8 Ibid.
11 The Year of the Flea
1 Jardine, On a Grander Scale.
2 National Archives, Rules and Orders to be observed by all justices of the Peace, Mayors, Bayliffs and other Officers for the Prevention of the Spreading of the Infection of the Plague, SP29/155 f1o2,1666.
3 Daniel Defoe, A Journal of the Plague Year, 1722.
4 Ibid.
5 John Graunt, London’s Dreadful Visitation, 1665.
6 Nathaniel Hodges, Loimologia. 1720.
7 Ibid.
8 Hugh G. Dick, Students of Physic and Astrology, quoted in Michael MacDonald, ‘The Career of Astrological Medicine in England’, in Ole Peter Grell and Andrew Cunningham, eds, Religio Medici, 1996.
9 Peter Levens, The Pathway to Health, 1587–1664.
10 Grell and Cunningham, eds, Religio Medici.
11 Mark Jenner, ‘Quackery and Enthusiasm’, in Grell and Cunningham, eds, Religio Medici.
12 Thomas Gale, quoted in Jenner, ‘Quackery and Enthusiasm’, in Grell and Cunningham, eds, Religio Medici.
13 Thomas Sydenham, Observationes Medicae circa Morborum acutorum historiam et curationem, 1676.
14 Nicholas Culpeper, Herbal, 1649.
15 Evelyn, Diary.
16 Ibid.
17 Hodges, Loimologia.
18 Evelyn, Diary.
19 Ibid.
20 Pepys, Diary.
21 Hodges, Loimologia.
22 Numbers 11.33; Jeremiah 21,6.
23 Defoe, A Journal of the Plague Year.
24 Ibid.
25 Quoted in Hans Fantel, William Penn: Apostle of Dissent, 1974.
26 Ian Mortimer, Dying and the Doctors, 2009
27 Bart K. Holland, ‘Treatments for Bubonic Plague, Reports from seventeenth century British epidemics’, journal of the Royal Society of Medicine, vol. 93, June 2000.
12 Pestilence, War and Fire
1 John Evelyn, letter to Wren, Wren Society Papers, Vol. 13.
2 Wren, Parentalia.
3 Wren Society Papers, Vol 13.
4 Ibid.
5 Sir John Banks to Pepys, Diary.
6 National Archives, E179 database; I Iearth Tax Online, hearthtax.org.uk
7 Pepys, Diary.
8 London Gazette, 2 September 1666.
9 Ibid., 10 September 1666.
10 Leo Hollis, The Phoenix, 2008.
13 The Aftermath
1 Venetian State Papers.
2 Trans-Atlantic Slave Trade Database.
3 John Dryden, Annus Mirabilis, 1667.