XIII William Paterson and the Bank of England
Some London streets have strange and unsuitable names; thus you will find an alley of wretched hovels, with muddy yards, containing nothing but cabbage-stumps and broken dustbins, called Prospect Place; whilst a lane adjoining the shambles styles itself Paradise Row. And what a curious name for a street is that of Threadneedle6 Street! How came the street to be so named? However, such is its name, and in this case it is not inappropriate. For lives there not in that street the Old Lady who is, year in, year out, everlastingly threading her diamond needle with gold and silver threads, and working the gorgeous embroidery of the financial flags of her own and of almost every other country in the world? Her dwelling is palatial; to be merely admitted into her parlour is in itself a positive proof of your respectability, for you gain no entrance thereto unless you are a stockholder; as to her drawing-room, the glories of Versailles and the Escurial are as miserable shanties, for her drawing-room contains, leaving alone other treasures, engravings worth from five pounds each to fifty thousand—nay, a hundred thousand pounds each. There is no five o’clock tea there, but plenty of music all day long; its notes, indeed, are silent, but the gold and silver instruments, whose fascinating and entrancing sounds have more magic in them than has the finest orchestra, vocal or instrumental, are audible enough. And as to her cellars, the treasures the Old Lady keeps there would buy up half a dozen such caves as that into which Aladdin descended.
The reader has by this time discovered who the Old Lady of Threadneedle Street is—namely, the Bank of England—the most gigantic monetary establishment in the world, the financial reservoir, the opening or shutting of whose sluices causes not only the commercial ebb and flow of east and west, of north and south, but sets in motion or prevents the ‘pomp and circumstance of glorious war.’
The history of this mighty establishment has often been told, but it seems to us that but scant justice has as yet been done to its founder, William Paterson. The injustice done to him, in fact, dates from an early day, for soon after the foundation of the Bank, of which he naturally was one of the directors, intrigue drove him from that position, and envy and obloquy pursued him ever after. But let us briefly recount his early history.
Born on a farm in Dumfriesshire in 1658 of a family notable in old Scottish history, he was, at the age of sixteen, transferred to the care of a kinswoman at Bristol, on whose death he inherited some property. Bristol was then a great commercial emporium, doing with much legitimate business a little in the slave trade, and his connection with that town was afterwards injurious to him, for whilst his friends said that he visited the New World as a missionary, his enemies asserted that he was mixed up with slave-dealing, and occasionally indulged in piracy. But the fact of his marrying the widow of a Puritan minister at Boston is more in accordance with the statements of his friends than with those of his enemies. Anderson, the historian of commerce, who as a lad must have known him in his old age, speaks of him as ‘a merchant who had been much in foreign countries, and had entered far into speculations relating to commerce and the colonies.’
He was in England in 1681, and, among the various schemes he started, he took a leading part in the project for bringing water into the north of London from the Hampstead and Highgate hills. He made a heavy investment in the City of London Orphans’ Fund; in the improved management and distribution of that charity he took a profound interest, a fact which leaves no doubt of his philanthropic and public spirit. It was in 1684 that he first conceived the idea of the Darien scheme, and though this turned out so unfortunate, he from first to last acted with rare disinterestedness; his errors were those such as a well-balanced and generous mind might fall into without reproach. Nor is the failure of that enterprise to be attributed to him, but to the conduct of William III., who had sanctioned, but afterwards, at the instigation of the East India Companies of England and Holland, discouraged and positively thwarted, it. How deeply he felt the disastrous results of the expedition is shown by the fact that for a time his mind was deranged in consequence of it. And who will now deny that Paterson was right in calling the Isthmus of Panama the ‘door of the seas and the key of the universe’? In 1825 Humboldt recommended the scheme of a canal from the Atlantic to the Pacific, and the enterprise of Lesseps will yet be carried to a successful issue.
However, we have to deal with Paterson chiefly as the founder of the Bank of England, and with the long and fierce battle he had to fight to accomplish his object, for there was great opposition to it from interest and prejudice. Paterson had been long in Holland, and when he propounded his scheme of a Bank of England, the people objected to it as coming from Holland; ‘they had too many Dutch things already,’ just as now there is a prejudice against things ‘made in Germany.’ Moreover, they doubted the stability of the Government of William III. At last, however, they consented to the Bank, on the express condition that £1,200,000 should be subscribed and lent to the Government. The money was subscribed in ten days. The Bank Act was obtained in spite of all opposition, which perhaps would have prevailed had not Queen Mary, acting on the instruction of William (then in Flanders), during a six hours’ sitting, carried the point, and the company received their royal charter of incorporation in July, 1694. Almost as soon as it had been established the Bank was called upon to assist the Government in the re-coinage of the silver money. The notes of the new Bank were destined to fill up the vacuum occasioned by the calling in of the old coin, but as the notes were payable on demand, they were returned faster than coin could be obtained from the Mint; a crisis ensued, during which the notes of the Bank fell to a discount of 20 per cent. But the Bank passed safely through its difficulties, as also through the troubles caused by the South Sea Bubble. The opposition in the first crisis was due chiefly to the goldsmiths, who detested the new corporation because it interfered with their system of private banking, hitherto monopolized by them. Paterson’s advice was of the greatest assistance in his capacity of director, yet such was the animus against him that, as we mentioned above, in 1695 he sold out the stock he held (£2,000), which from the first was a director’s qualification, and retired from his office. But he did not withdraw from public life. The Darien Expedition already referred to was organized by him in 1698, and its disastrous results were, as we have shown, in nowise attributable to him, and this was, in fact, eventually admitted by the nation, Parliament in 1715 passing an Act awarding him an indemnity of upwards of £18,000 for his losses in that enterprise. In other ways Paterson continued to interest himself in matters affecting the public welfare; he rendered his Sovereign signal services by the wise and shrewd advice he gave him during the latter part of his troubled reign; he published many tracts on the management of the National Debt and the system of auditing public accounts; he was a zealous advocate of Free Trade, and his views on the subject of taxation were far ahead of the ideas of his day. His undoubtedly great talents, his thorough honesty and genuine patriotism, fully entitle him to the praise given him by his friend Daniel Defoe, as ‘a worthy and noble patriot, one of the most eminent, to whom we owe more than ever he would tell us, or, I am afraid, we shall ever be sensible of, whatever fools, madmen, or Jacobites may asperse him with.’
We cannot attempt to give a history of the Bank of England in our limited space, but a short account of the Bank building may not unfitly close this notice of the founder of the establishment. The business was originally started at Mercers’ Hall, and next removed to, and for many years carried on at, Grocers’ Hall in the Poultry. In August, 1732, the governors and directors laid the first stone of their new building in Threadneedle Street, on the site of the house and garden formerly belonging to Sir John Houblon, the first Governor of the Bank. At first the buildings comprised only the centre of the principal or south front, the Hall, Bullion Court, and the Courtyard, and were surrounded by St. Christopher-le-Stocks Church, three taverns, and several private houses. From the year 1766 onwards considerable additions were made to the building. All the adjoining houses on the east side to Bartholomew Lane, and those occupying the west side of that lane almost to Lothbury, were taken down, and their places occupied by offices of the Bank. The south side buildings, forming the eastern continuation of the establishment, presented a range of fluted columns in pairs, with arched intervals between, pointing out where windows should have been placed, which, however, were filled up with stone. This necessitated the rooms within being lighted by small glass domes in the roof, a circumstance much complained of at the time by the clerks as injuriously affecting their eyes. It was intended to extend the façade on the western side by taking down the Church of St. Christopher, which by the removal of that part of Threadneedle Street had been deprived of a great part of its parish. Noorthouck, who wrote in 1773, says: ‘How far so extensive a plan may answer the vast expense it will call for to complete it is a question proper for the consideration of those who are immediately concerned; an indifferent spectator cannot view this expanded fabric without comparing it with the growth of public debts negotiated here, and trembling more for the safety of the one than of the other.’ Could he see the Bank now, covering nearly four acres of ground, what would he say?
One Ralph, architect, whose ‘Critical Review of the Buildings, Statues, and Ornaments in and about London’ was published in 1783, says: ‘The building erected for the Bank is liable to the very same objection, in point of place, with the Royal Exchange, and even in a greater, too. It is monstrously crowded on the eye, and unless the opposite houses could be pulled down, and a view obtained into Cornhill, we might as well be entertained with a prospect of the model through a microscope. As to the structure itself, it is grand... only the architect seems to be rather too fond of decoration; this appears pretty eminently by the weight of his cornices... rather too heavy for the building.’ The objectionable buildings here referred to were the triangular block of houses which formerly stood in front of the old Royal Exchange, but was removed on the building of the new.
At the beginning of this century the Bank on the south side was of the same extent as now; on the east side also it extended to Lothbury, on the west it reached to about half the length of the present Princes Street, which, however, then did not proceed in a straight line, as it does now, but took a sharp turn to north-east, coming into Lothbury at a point nearly opposite St. Margaret’s Church, and thus cutting off a corner of the Bank site, which would otherwise have been nearly square. But when, early in this century, Princes Street was extended in a straight line to Lothbury, the condensed portion of the street, together with a block of houses on the west side of it, were added to the Bank site, and the Bank assumed its present shape. But great architectural improvements had in the meantime been introduced. The original or central portion, eighty feet in length, which was of the Ionic order raised on a rusticated basement, was altered to what it now is; the attic seen on it was added in 1850. This original portion was from the design of George Sampson. The east and west wings were added by Sir Robert Taylor, after whom Sir John Soane was appointed the Bank architect, and he rebuilt many of those parts constructed by Sampson and Taylor; and on Sir John’s death in 1837 Mr. Cockerell succeeded him in the position. He again greatly modified many features of the building. The eighty feet of the original south side now extend to 365 feet; the length of the west side is 440 feet, of the north side 410 feet, and of the east side 245 feet. Both internally and externally classical models have been followed. The hall known as the Three Per Cent. Consol (three per cent., alas! gone) Office, ninety feet long by fifty wide, is designed from models of the Roman baths, as are the Dividend and Bank Stock Offices. The chief cashier’s office is forty-five feet by thirty, and designed after the Temple of the Sun and Moon at Rome. The Court Room of the composite order, about sixty feet long and thirty-one wide, is lighted by large Venetian windows on the south, overlooking what once was the churchyard of St. Christopher’s Church, and into which in 1852 a fountain was placed, which throws a single jet, thirty feet high, amongst the branches of two of the finest lime-trees in London. The north side of the Court Room is remarkable for three exquisite chimney-pieces of statuary marble. The original Rotunda was roofed in with timber, but in 1794 it was found advisable to take it down, and the present Rotunda was built, which measures fifty-seven feet in diameter, and about the same in height; it is of incombustible material, as are all the offices erected by Sir John Soane. There are a number of courts within the outer walls of the buildings; they are all of great architectural beauty; the one entered from Lothbury is truly magnificent. It has screens of fluted Corinthian columns, supporting a lofty entablature, surmounted by vases. This part of the edifice was copied from the beautiful temple of the Sybils, near Tivoli. A noble arch, an imitation of the arch of Constantine at Rome, gives access to the Bullion Court, in which is another row of Corinthian columns, supporting an entablature, decorated with statues representing the four quarters of the globe. The north-west corner of the Bank is modelled on the temple of Vesta at Rome. We have yet to mention the Old Lady’s Drawing-Room, or the pay-office, where bank-notes are issued, or exchanged for cash. It is a fine hall, seventy-nine feet long by forty wide, and we have left the mention of it to the last because it suggests to us some particular reflections. We have seen that Paterson was the real founder of the Bank of England, and we may take this opportunity of adding that Charles Montague and Michael Godfrey are entitled to share in Paterson’s glory for the assistance they lent him in this undertaking; but the Bank ignores its founder, and had not even a portrait of him till Mr. James Hogg, the founder of London Society, presented them with one. In the Pay Hall stands the statue of William III., and in the Latin inscription underneath he is called ‘founder of the Bank.’ It is the old story: when a prize is taken at sea the biggest share of it, the lion’s share, goes to the ‘Flag’; the real fighters must put up with the leavings.
Let us end with another philosophical reflection. Facts are more astounding than fiction, as we will show by two facts. Gaboriau’s novel ‘La Dégringolade’ (The Downfall), in one of its earliest chapters describes the opening of a grave in the Parisian cemetery of Montmartre, to discover whether it contains the body of a certain person or not. The coffin is found to be empty. This is a fiction, but are we not likely to see its realization shortly? Paul Féval’s romance ‘Les Mystères de Londres’ gives a long account of the fictitious attempt of some villains to get at the treasures in the cellars of the Bank of England by digging a tunnel under Threadneedle Street; they are, of course, foiled in the end. But now, according to accounts published at the end of the month of November, 1898, in the Daily Mail, the tunnel is actually dug by a railway company, and so close to the walls of the Bank as to actually compel its governors and directors to call in the assistance of Sir John Wolfe Barry to advise means to avert the danger which threatens the building, already affected by the excavations. Truly fact is stranger than fiction.
Notes
6 Stow calls it Three Needle Street, as Hatton supposes, from such a sign. It has also been written Thrid Needle and Thred Needle Street, but our ancestors were not so particular as to spelling as we are.