JOST A MON

The idle ramblings of a Jack of some trades, Master of none

Okay, I admit it - until I nipped into the Bank of England Museum the other day during my lunch break, I had no idea why it was called the Old Lady of Threadneedle Street. The street name is obvious - that's where the bank's building is located. But Old Lady?

I am happy to announce that all has been made clear to me. In 1797, James Gillray published a cartoon entitled Political Ravishment, or The Old Lady of Threadneedle Street in Danger. It shows a skanky William Pitt the Younger, Prime Minister of England at the time, trying to woo an old lady, depicting the Bank, sitting on a chest of gold and wearing a garland of £1 notes. At the time, the sterling's backing by gold had been removed on orders from Pitt, and was the subject of considerable economic debate in Parliament - what was the worth of paper currency if it wasn't backed by a solid asset?

Part of this debate is reprised in the caricatured forms of Pitt and Charles Fox, his greatest opponent, who bob and weave and argue as visitors pass their dummies in the Bank's Museum.

The Museum itself is a fairly new establishment, inaugurated by the Queen scarcely twenty years ago. It is not a very large space, and can easily be covered in half an hour or so. There are interesting exhibits (there's one on Inflation currently, complete with price indices going back centuries and explanations on the Bank's mandate to control price growth), paintings and etchings, gold bars, exquisite silverware, currency papers from the 17th century on, promissory letters, goldsmiths' notes, architectural histories and other treasures. It is especially kid-friendly (a recent special event had a costumed medieval moneyer recounting tales of the Middle Ages while minting coins - a free coin for every visitor!) like many of Britain's museums, and when the boy's a little older and filled with materialism, I'll be sure to take him there to sniff at all the moolah. Nothing like starting them young in the pursuit of filthy lucre.

The enormous edifice that is the current Bank of England dates from 1939, and is perhaps its third or fourth incarnation. The first building was designed by the little known George Sampson in 1734, and it was gradually expanded and modified (slightly) over the years by such luminaries of British architecture as Sir John Soane. Sir Herbert Baker, that associate of Lutyens in the great design of New Delhi, was responsible for the complete rebuilding of the bank in the 1930s, culminating just before the Second World War in the building we see now.

There are lovely artworks displayed along the left wall of the Museum describing the evolution of the Bank. When George Sampson was commissioned to build it in the early 18th century, the bank had already been operating for almost 40 years in the Grocers' Hall since its founding charter in 1694. The bank had issued bonds to the tune of £1,200,000 on behalf of the government of the time in its war against France. There's a book recording the names of the worthies who subscribed to the loan and you can see it in the Museum. Wonderfully risk-seeking folks, no doubt, very unlike the bankers of today, suckered and beaten into submission by the credit crunch and excesses of their own exuberant lending.

A lovely line engraving of a drawing by Robert West of a perspective view of Sampson's bank appears in Maitland's History of London from its Foundation, 1739.

Fifty years later, Sir John Soane was commissioned to rebuild and expand the building. His main contributions were top-lighting for security; decoratively, he replaced the original classical order with pilaster strips, preferring the simplicity of line to the ornate original. He also designed the wonderful Bank Stock Office (which, undone as part of Baker's 20th century reconstruction, was reconstructed in 1988 under the aegis of English Heritage), which comprised mahogany countert0ps and oak ledger rests. This was where the staff, Servants of the House, deferred to and served the Proprietors, or Owners of the Bank, who transacted the purchase and sale of capital stock in this room. (The stock was uncertificated and the only way one could prove ownership to it was by means of a ledger entry in the books of the Bank.)

J.M. Gandy painted the Stock Office in 1798 in perspective. T. H. Shepherd is known for a painting of the exterior of Soane's bank (completed in 1828). And in 1803, in the European Magazine appeared a superb engraving of Soane's Lothbury Court.

By the end of the First World War, there wasn't enough space in the premises to accommodate all the staff and records, so the edifice was demolished, and Herbert Baker began work on his vision of it. A line & wash drawing of the rebuilding appeared in 1936 by Hubert Williams.

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In the early 17th century, goldsmiths began to expand their core business by allowing clients to deposit gold with them and issuing notes in return as proof of deposit. Simultaneously, the realisation dawned that they could lend 'money' via promissory notes based on the gold they had in their vaults. Many goldsmiths amassed considerable wealth (there's a painting of a solemn and very rich merchant banker named Sir Robert Clayton by Lorenzo da Castro in the Museum; the one to the right here is one by Gainsborough) in this new business, although many went bankrupt when funds loaned to the King were defaulted. It was this bust that prompted a public demand for a national bank which could act as a lender of last resort, and the 1694 charter establishing the Bank of England was signed by William III.

The new Bank was quick to develop its own notes - paper currency - inspired by the goldsmiths' notes. Security features were added rapidly as well: the seal of Britannia, the sum block (a large black £ sign followed by the numerical value of the paper), and watermarked paper were already being used by 1697. Britannia, of course, was a Roman goddess appearing on the coinage of Antoninus Pius, but she had vanished from public memory when the Romans abandoned Britain centuries before. Now she was resurrected as a security feature. Notes were printed by private printers till 1791, when security concerns prompted the bank to start a press on its own premises. In 1917, the old St Luke's Hospital on Old Street was converted to a currency press; these days, a special printing house in Loughton, Essex, creates all the sterling notes in circulation.

(Interestingly, the Bank never minted coins - that has remained the prerogative of the Royal Mint.)

In its early years, the Bank suffered much competition for its bonds from private entities such as the South Sea Company, which was responsible for a massive equity bubble in the 1720s. It had been allowed to take on part of the national debt, and this prompted immense speculation; when the company subsequently went bust, there was widespread ruin.

It wasn't just speculation and fraudulent promises by brokers that led to financial ruin. Counterfeiting of bank notes was widespread as well, encouraged by the illiteracy of commoners. Counterfeiting was made a capital offence, and during the 135 years that this law remained in force, 600 people were convicted of the crime, half of whom were hanged.

To boot, there was the continual fiscal irresponsibility of both monarch and government. Indeed, an evocative letter from King Charles II to his creditors illustrates the situation:

Gentlemen,

I have always resolved to show myself an honest man in paying my debts, and its not my fault that I cannot repay you with the same frankness you used ... in lending it, but having been so honestly dealt with by you, I will pay it as well as possibly I can. And to that purpose tomorrow will pass an Order in Council for the Settling ye Interest of it, till I can pay the principall and according to your owne desires too, upon the Excise.

Feb 8th 1676 Speech of King Charles 2d to ye Bankers

Not his fault? And whose money was he spending while bonking Nell Gwynn and half the women of the country?

From 1793 to 1815, Britain was almost continuously at war. The government needed as much money as it could get away with. When a small French task-force arrived at Fishguard, the consequent panic resulted in a run on the Bank's gold holdings, which fell from £16,000,000 to £2,000,000, as nervous customers redeemed their paper for gold. The Pitt government issued an order freezing the payment of gold, a so-called temporary measure that eventually lasted 22 years. Notes were now printed willy-nilly without the backing of gold, to the usual effects: sterling collapsed on the Hamburg Exchange, inflation went out of control in England, and gold prices began to rise. An anonymous colour etching titled "The Men of Paper going to pot; or the directors in a Stew", published in 1819 by T. Tegg railed against this profligacy. The Gillray cartoon that is thought to have given the Bank its nickname also dates from this period.

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The Bank was one of the earliest employers of women in the City, starting in 1894. During the Victorian era, it was responsible for national finances and become an international financial powerhouse. During the Great War, the national debt jumped from £1 billion to over £7 billion, and the bank was tasked with managing the government's borrowing. At the same time, as the sovereign and half-sovereign gold coins began disappearing from circulation, the government introduced £1 and 10 shilling notes Treasure notes to replace them.

You can see examples of these coins and notes, and almost every other coin and paper issued in the reigns of various monarchs, in the Museum. Numismatists can have quite an orgy here.

Speaking of numismatics, there's always been considerable inventiveness of common names for coins of various denominations. In the pre-decimal period of sterling, a pound could be divided into 960 parts: shillings, pence, farthings (quarter pennies!). In those days, a pound was a considerable amount of money, so 1/960 of it was of some use in daily life. There were all sorts of names in use: crowns, dollars, bob, tanners, ponies. A chap called John Curd said

"I was born in 1943. The money used in our village was:- farthing, haypenny, penny, thrupenny bit, sixpence, shilling, two bob bit, half crown, ten bob note, pound note and five pound note. The crown coin was limited. I don't think there was a five pound coin. I believe the guinea was, still is, just a value and not a coin or note."

As a matter of interest, here's a list I copied from a wall in the Museum.

Original Value

Current Value

Name

£500

Half-grand

£100

Ton

£25

Pony

£20

Score

£5

Fiver

£1 and one shilling

£1.05

Guinea

£1

Quid (note); Sovereign (coin)

10 shillings

50p

Ten bob

5 shillings

25p

Crown/Dollar

4 shillings

20p

Groat

1/2 crown

12.5 p

Half-dollar

2 shillings

10p

Florin/ Two bob

shilling

5p

Bob

sixpence

2.5p

Tanner

threepence

1.25p

Thre'penny bit

penny

0.5p

Brown

6 comments:

Space Bar said...

now please tell me what a 'monkey' is. i've heard all the other terms - they appear in georgette heyers all the time (and i'm happy to have the mystery of 'pony' revealed).

why is that list strangely silent on the question of simians? that is what i want to know!

Fëanor said...

That would be a half-grand, you know, £500. I'm not entirely sure about this - it's hearsay as far as I know. It wasn't my intention to belittle our ancestors! The list at the Bank omitted the term.

But I'm happy to see that you read Heyer. I thought my sister was the only one who did :-)

Shefaly said...

Penny = Brown? How did they know?

BTW I tagged you for a meme - foodie meme - so please to oblige by writing a response :-) I realise I sound like many Stephenians who speak like this for effect; I met one yesterday too not far from your workplace.

Fëanor said...

Shefaly: I've no idea. But why shouldn't Penny be a Brown?

Speaking of Brown, Gordius Brownus seems to want to remove Britannia from British coins. Naturally, there's much uproar (esp. among Daily Mailers and other protectors of British purity).

Re: Food tag - shall do so but might take some time as swamped with this and that and impending business trips... Thanks, though!

Fëanor said...

And why are Stephanians lurking near my workplace? It's not the done thing! :-)

Shefaly said...

That Penny and Brown reference was a sarcastic one on his 'prudence' habit. I think we need him to go. ASAP. Rather than slow death by autobiography.

Please do when you can. I want to hear from another epicure ;-)

Lurking Stephenians aren't allowed? I shall tell him. He should find a new job.

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