England), or for any other persons whatever, united or to be united, in covenants of partnership, exceeding the number of six persons, in that part of Great Britain called England, to horrow, owe, or take up any sum or sums of money on their bills or notes, payable on demand, or in any less time than six months from the borrowing thereof." This act was passed in consequence of an association, called the Mine Adventure Company, having commenced the issue of promissory notes. In 1713, the charter was further extended until 1742 (12th Anne, stat. 1, c. 11); and in 1722, the capital was augmented by a new subscription of £3,400,000, to assist the unfortunate South Sea stockholders. In 1742, the charter was granted until 1764 (15th Geo. II., cap. 13), and a call was made upon the proprietors of £840,004 5s. 4d., making the total amount of the capital £9,800,000.

In 1745, the advance of Charles Edward Stuart to Derby, at the head of the Highlanders, caused so great a run upon the bank for specie, that to gain time the directors ordered that the notes should be paid in shillings and sixpences. Upon the defeat of the Pretender, the panic subsided.

In 1746, a call of 10 per cent. on the capital was made, amounting to £980,000; and, in 1759, the bank commenced the issue of £10 notes, having previously issued none of a less amount than £20. This measure had the effect of considerably increasing the circulation of its notes. In 1764, the corporation received an extension of its charter until 1786 (4th Geo. III., c. 25); and in 1781, it was further extended until 1812, and the directors were empowered to make a call upon the proprietors of 8 per cent. (21st Geo. III., c. 60). The capital now amounted to £11,642,400.

In 1793, the failure of a number of country banks caused a considerable diminution in the paper currency, and the Bank of England, in consequence, commenced the issue of £5 notes. The total circulation of the

An im

bank at this time was nearly £12,000,000. portant period in the history of the Bank of England was now at hand; the circulation, which in 1795 amounted to upwards of £14,000,000, rapidly diminished, until, at the beginning of 1797, it amounted to little more than £9,000,000. This sudden diminution, caused chiefly by the long-continued war in which the country had been engaged, which made it necessary to send large supplies of bullion to the continent, involved the Bank of England in considerable difficulties. On the 25th of February, 1797, the bullion in the hands of the bank amounted to but £1,272,000, having been gradually decreasing since 1794, when it exceeded £8,000,000. On the following day an order in council was issued, prohibiting the bank from paying its notes in specie, until the subject could be brought before Parliament. This was speedily effected, and a committee of the House of Commons, after investigating the affairs of the bank, ascertained that the corporation possessed the sum of £3,825,890 over and above the capital lent to Government. The condition of the establishment being thus satisfactory, an act was passed, known as the "Bank Restriction Act," exempting the corporation from payment of its notes in bullion, which was afterwards renewed, and continued in force until the 1st of February, 1820. It was in consequence of this act

that the bank commenced the issue of £1 and £2 notes, the issue of which, by any bank in England or Wales, was afterwards prohibited by an act passed on the 5th of April, 1829. The circulation of these notes by the Bank of England amounted, in 1814, to nearly £10,000,000.

The charter of the bank was renewed in 1800, until twelve months' notice should be given after the 1st of August, 1833, on condition that the proprietors should. advance £3,000,000 to Government, without interest, for six years, ending 1806, (39th and 40th Geo. III., c. 28) In 1816 an act was passed, authorising the

directors to divide a portion of the accumulated profits among the proprietors, by adding 25 per cent. to the amount of their stock; the aggregate amount of this bonus was £2,910,600, by which the capital was increased to £14,553,000, its present amount.

The last renewal of the charter took place in 1833, (Act 3rd and 4th Will. IV., c. 98). This Act provides

that " upon one year's notice given within six months after the expiration of ten years from the 1st of August, 1834, and upon repayment by Parliament of all sums that may be due from the public to the Bank at the time of the expiration of such notice, the exclusive privileges of banking granted by this Act shall cease and determine." The exclusive privileges previously possessed by the corporation, as regards the issue of promissory notes, are continued by the Act, but it is provided "that any body politic or corporate, or society, or company, or partnership, although consisting of more than six persons, may carry on the trade or business of banking in London, or within sixty-five miles thereof, providing they do not borrow, owe, or take up in England any sum of money upon their bills or notes payable on demand, or at any less time than six months from the borrowing thereof, during the continuance of the privileges granted by this Act to the Governor and Company of the Bank of England." This clause was inserted to remove the doubts that had arisen respecting the intention of the Act passed in 1708, which it was universally believed, prohibited the establishment of banks of every kind having more than six partners, until the question of the renewal of the bank charter was brought forward in 1833, when the decision of counsel was taken upon the subject, who stated as their opinion that, at any period, banks with an unlimited number of partners might have been established in the metropolis, or within sixty-five miles thereof, provided they did not issue promissory notes payable at a shorter date than six months. It is, perhaps, worthy of re

mark that this Act of Parliament had been misunderstood for upwards of a century. The Act of 1833 makes it unlawful for the bank or its agents to issue any promissory notes payable on demand, which are not made payable at the place where the same are issued. It is also provided that, "until Parliament shall otherwise direct a tender of a note or notes of the Bank of England, expressed to be payable to bearer on demand, shall be a legal tender to the amount expressed in such note or notes, and shall be taken to be valid as a tender to such amount, for all sums above £5, on all occasions on which any tender of money may be legally made, as long as the Bank of England shall continue to pay on demand their said notes in legal coin; provided always that no such note or notes shall be held a legal tender of payment by the Governor and Company of the Bank of England, or by any branch of the said Governor and Company. But the said Governor and Company are not to become liable to be required to pay and satisfy, at any branch bank of the said Governor and Company, any note or notes not made specially payable at such branch bank; but the said Governor and Company shall be liable to pay and satisfy, at the Bank of England in London, all notes of the said Governor and Company, or any branch thereof."

Bills of exchange and promissory notes, payable at or within three months after date, are exempted by this Act from the operation of the laws relative to usury.

It is also ordered by the Act "that an account of the amount of bullion and securities in the Bank of England belonging to the said Governor and Company, and of notes in circulation, and of deposits in the said bank, shall be transmitted weekly to the Chancellor of the Exchequer for the time being; and such accounts shall be consolidated at the end of every month; and an average state of the bank accounts of the preceding three months, made from such consolidated accounts aforesaid, shall be published every month in the first succeeding London Gazette."

It was further determined by the same act that onefourth part of the debt, due from Government to the bank, should be repaid, and that a general court of the proprietors should be summoned, prior to the 5th of October, 1834, to consider the expediency of dividing among the proprietors the portion of the capital so repaid; the option of reducing the capital one-fourth being left by the charter to the proprietors. At the meeting which took place, agreeably to the terms of the act, it was resolved that the capital should not be reduced.

In the year 1826, an act was passed (7th Geo IV., cap. 46, sec. 15), expressly allowing the Bank of England to establish branches in different parts of the country; and shortly afterwards, branches were opened at Birmingham, Bristol, Exeter, Gloucester, Hull, Leeds, Liverpool, Manchester, Newcastle, Norwich, and Swansea. The Exeter branch has since been abandoned, and one at Plymouth opened instead. A branch has also lately been established at Portsmouth. The establishment of the branch banks took place at the recommendation of Government, in consequence of the severe losses which had been incurred in various parts of the kingdom by the failure of the country banks in 1825 and 1826.

Besides the usual profits of banking business, the Bank of England derives a considerable income as an allowance for the management of the national debt. Previously to 1786, it received from Government £562 10s. per million; in that year the allowance was reduced to £450 per million; in 1808, it was still further diminished to £340 on six hundred millions of the debt, and £300 on all that exceeded that amount, exclusive of a sum for the management of the terminable annuities. At the last renewal of the charter, it was enacted that £120,000 per annum should be deducted from this allowance.