are now wholly exempted from stamp duty. In 1832 the Bank maintained an establishment of nearly one thousand officers, clerks, porters, and messengers; and the number has since been increased. In the same year the salary of 940 persons employed at the Bank and its branches amounted to 211,9037., or, on an average, to 2251. each; and 193 persons, principally superannuated clerks, received 31,2431. per annum, or 1617. each. In 1694 the stockholders divided 8 per cent., which was increased to 9 per cent. in the following year; from that time to 1729 the annual dividend fluctuated between 5 and 9 per cent.; for the next eighteen years the rate was 5 to 6 per cent.; in 1747 it fell to 5 per cent.; in 1753 to 4 per cent., which was the lowest rate of profit since its first establishment; from 1767 to 1806 the dividend was gradually increased to 7 per cent., and from 1807 to 1822 the proprietors divided 10 per cent. annually: in 1823 the rate was lowered to 8 per cent., and has so continued to the present time. In addition to these payments, the stockholders have at various times received bonuses to the amount of 6,694,3801., or 57 per cent. upon the subscribed capital. The directors of the Bank of England have always declared and acted upon the opinion that secrecy in regard to its condition is important to its prosperity. To such an extent has this feeling been carried, that year after year large and increasing dividends were declared and paid, without the exhibition to the proprietors of a single figure by which such a course could be justified, the simple recommendation of the directors having always satisfied the proprietors as to the policy of preserving this mystery. The printing of the Report of the Committee of Secrecy in 1832 revealed the true condition of the corporation, and it is not likely that the directors will ever again be allowed to involve its proceedings in the same degree of concealment. The Bank of England Charter Act (7 and 8 Vict. c. 32), which received the royal assent on the 19th of July, 1844, remodels the Bank and establishes a separate department for the issue of notes. This Act is entitled "An Act to regulate "After the 31st of August, 1844, the On the 31st of August, 1844, "There shall be transferred, appropriated, and set apart by the governor and company to the issue department of the Bank of England securities to the value of 14,000,000l., whereof the debt due by the public to the said governor and company shall be and be deemed a part; and there shall also at the same time be transferred, appropriated, and set apart by the said governor and company to the said issue department so much of the gold coin and gold and silver bullion then held by the Bank of England as shall not be required by the banking department thereof; and thereupon there shall be delivered out of the said issue department into the said banking department of the Bank of England such an amount of Bank of England notes as, together with the Bank of England notes then in circulation, shall be equal to the aggregate amount of the of the parties tendering such gold by persons approved of by the bank. § 5 gives the bank power to increase securities in the issue department, and issue additional notes in case any banker who, on the 6th of May, 1844, was issuing his own notes, shall afterwards cease to issue. Under these circumstances the bank may be empowered by an order in council to increase the amount of securities beyond the sum of 14,000,000l., and thereupon to issue additional Bank of England notes to an amount not exceeding such increased amount of securities specified in such order in council, and so from time to time; provided always, "that such increased amount of securities specified in such order in council shall in no case exceed the proportion of two-thirds the amount of bank-notes which the banker so ceasing to issue may have been authorized to issue under the provisions of this act; and every such order in council shall be published in the next succeeding securities, coin, and bullion so transferred §3 fixes the proportion of silver bullion to be retained in the issue depart ment, and on which bank notes may be issued at one-fourth part of the gold coin and bullion, and not to exceed that proportion. § 4 provides that all persons may demand of the issue department notes in exchange for gold bullion at the rate of 31. 17s. 9d. per ounce of standard gold, to be melted and assayed at the expence Accounts are to be rendered weekly by the Bank of England, which are to be published in the London Gazette.' (§ 6.) § 7 exempts the bank from stamp duty upon their notes. In consequence of the various privileges granted by the act, the bank is to deduct 180,000l. from the expense of managing the unfunded debt, instead of the sum of 120,000l. fixed by 3 & 4 Will. IV. c. 98 (§ 8); and further, by § 9 the bank is to allow the public the net profits of increased circulation allowed under § 5 beyond the sum of 14,000,000l. fixed by the act. § 10 prohibits the establishment of any new bank of issue. "No person other than a banker who on the 6th of May, 1844, was lawfully issuing his own bank notes, shall make or issue bank notes in any part of the United Kingdom;" and § 11 regulates the mode of issuing notes by those bankers who issued notes on the 6th of May, 1844, who may "continue to issue such notes to the extent and under the conditions hereinafter mentioned, but not further or otherwise; and the right of any company or partnership to continue to issue such notes shall not be in any manner prejudiced or affected by any change which may hereafter take place in the personal composition of such company or partnership, either by the transfer of any shares or share therein, or by the admission of any new partner or member thereto, or by the retirement of any present partner or member therefrom: provided always, that it shall not be lawful for any company or partnership now consisting of only six, or less than six persons, to issue bank notes at any time after the number of partners therein shall exceed six in the whole." Bankers ceasing to issue notes may not resume issuing, either by agreement with the bank or otherwise. (§ 12.) And existing banks of issue are to continue under strict limitations. Their average circulation for twelve weeks preceding the 27th of April is to be ascertained, when the commissioners, or any two of them, shall certify the amount to the banker, who may then issue his own bank notes after the passing of this Act; provided that such banker shall not at any time after the 10th of October, 1844, have in circulation upon the average of a period of four weeks a greater amount of notes than the amount so certified. (§ 13.) There is a provision in § 14 for banks which had become united within the twelve weeks preceding the 27th of April, and such united banks may obtain a certificate of their joint circulation, which the united bank will be authorized to issue: a copy of the certificate is to be published in the London Gazette.' (§ 15.) In case banks become united after the passing of this Act, the commissioners are also to certify the amount of bank notes which each bank was authorized to issue; and the united bank is to have the benefit of issuing to the amount of their joint circulation. (§ 16.) 66 A penalty is imposed on banks issuing in excess, the amount of the penalty to be equal to the excess of the average monthly circulation. (§ 17.) After the 19th of October, 1844, issuing banks are to render accounts to the Commissioners of Stamps and Taxes of the amount of their notes in circulation on every day during the week, and also an account of the average amount of the bank notes in circulation during the same week, and a like average for every period of four weeks, and the amount of bank notes which such banker is authorized to issue under the Act is to be given in such return. The weekly average is to be published in the 'London Gazette.' The penalty for making a false return is 1007. (§ 18) and § 20 empowers the Commissioners of Stamps and Taxes, with the consent of the Treasury, to cause the books of bankers containing accounts of their bank notes in circulation to be inspected; and there is a penalty of 100%. for refusing to allow such inspection. All bankers are to return their names once a year (in the first fifteen days of January) to the Stamp-office, and a copy of such return is to be published in some newspaper circulating within each town or county where the business is carried on. (§ 21.) All bankers who shall be liable by law to take out a licence from the Commissioners of Stamps and Taxes to authorize the issuing of notes or bills, are to take out a separate licence for every place at which they issue notes or bills; but there is a proviso in favour of bankers who had four such licences in force on the 6th of May, 1844, and they will not be called upon to take out a larger number. (§ 22.) Compensation is made to certain bankers named in the schedule C who had ceased to issue their own notes under certain agreements with the Bank of England before the passing of this Act. (§ 23.) The Bank of England is allowed to compound with issuing banks which agree to issue Bank of England notes as a consideration for the relinquishment of the privilege of issuing private bank notes; the composition to be at the rate of one per cent. on the amount of Bank of England notes issued, but such issues to be restricted according to § 13. Banks within sixty-five miles of Lon don may draw, accept, or endorse bills, not being payable to bearer on demand. (§ 26.) § 27 relates to the expiration of the Bank Charter. "At any time upon twelve months' notice to be given after the 1st of August, 1855, and upon repay ment by parliament to the governor and company, or their successors, of the sum of 11,015,100l., being the debt now due from the public to the said governor and company, without any deduction, discount, or abatement whatsoever, and upon payment to the said governor and company and their successors, of all arrears of the sum of 100,000l. per annum," and other moneys due to the Bank, "then and in such case, and not till then, the said exclusive privileges of banking granted by this Act shall cease and determine at the expiration of such notice of twelve months." & 8 Vict. c. 32, it will be seen are:-1. The separation of the issuing and the banking functions of the Bank of England, with strict limitations as to its issues, and a different system of account and different officers for each department. The Bank has the power of issuing notes on a fixed amount of securities to the value of 14,000,000l., and any issue beyond this sum must be founded on bullion only. As the stock of bullion in the bank increases or diminishes, so will likewise the issues of bank-notes. 2. The next point of importance is the absolute prohibition of any new bank of issue and the limitation of the issues of all existing banks of issue to an average of the circulation of each bank for the twelve weeks preceding April 12th, 1844. Joint-stock banks in London are empowered to accept bills for any period, instead of such bills being confined to dates of not less than six months. Such are the chief features of the system now 11,015,100 in operation, the practical working of 2,984,900 which, in the course of the ensuing ten years, will be watched with much interest. Another remodelling of the Bank may then again take place according to the act, and an opportunity again be afforded for effecting further changes in banking institutions. The Gazette of September 14th, 1844, contained the first account of the affairs of the Bank pursuant to the above act: it showed the state of the Bank for the week ending the 7th of September, and was as follows: £. 28,351,295 14,351,295 28,351,295 £ 14,553,000 Rest. CR. 31,423,240 3. IV. Banking, as carried on by private establishments and joint-stock associations in London, in other parts of England and in Ireland.-The Italian merchants who, under the name of Lombards, settled in England during the thirteenth century, and previously to that time the Jews, performed the greatest part of the money business of the country. They were not, however, bankers in the modern acceptation of the word, and in fact the business of banking does not appear to have been carried on among us earlier than the middle of the seventeenth century. The goldsmiths of London, who before that time had restricted their trade in 14,554,834 money to the purchase and sale of foreign 7,835,616 coin, then extended their business by bor8,175,025 rowing and lending money. The latter 857,765 part of their business-that of lerding -was principally transacted with the king, to whom they made advances on the security of the taxes. They allowed 14,554,834 31,423,240 The most important parts of the act 7 interest to the individuals from whom | The number is at present seventy-four they borrowed, and the receipts which including seven colonial and eight joint. they gave for deposits passed from hand stock banks. There are three private to hand in the same manner as Bank-banking-houses still carrying on business notes have since circulated. which were established before the Bank The taking of interest for the use of of England. These are Child's, estamoney was not rendered legal in Eng-blished in 1663; Hoare's, in 1680; and land until 1546, when the rate that could Snow's, in 1685. The London bankers be demanded was fixed at 10 per cent. continued to issue notes for some time In 1624 the legal rate was reduced to 8 after the closing of the Exchequer, but per cent., and a further reduction to 6 they have long since ceased to do so, per cent. took place in 1651. At this acting solely as depositaries of money, rate it still remains in Ireland, but was discounters of bills, and agents for lowered in England to 5 per cent. in bankers established in the country. No 1714, at which it now continues. These restriction has ever existed which prevents limitations have always been productive private banks in London, if they have of evil. Money-lenders by profession not more than six partners, from issuing will always be ready to take advantage their notes payable to bearer; that they of the necessities of borrowers, and being have ceased to do so has arisen from the left without competitors among the more conviction that paper money, issued on conscientious capitalists, demand not only the security of only a small number of a monopoly price for the use of their individuals, could not circulate profitably money, but also a further sum propor- in competition with that of a powerful tioned to the risk and penalties attend- joint-stock association. ing discovery. The Lombard merchants were accustomed to demand 20 per cent. interest, and even more, according to the urgency of the borrower's wants. The merchants of London had been used to deposit their money for security at the Mint in the Tower of London, whence they drew it out as occasion demanded; but in the year 1640 King Charles I. took possession of 200,000 thus lodged, which of course put a stop to that practice. This state of things preceded and most probably led to the extension of the business of the goldsmiths, as just explained. This business soon became very considerable, and was found convenient to the government. In 1672 King Charles II., who then owed 1,328,5267. to the bankers, borrowed at 8 per cent., shut up the Exchequer and for a time refused to pay either principal or interest, thus causing great distress among all classes of people. Yielding to the clamour raised against this dishonesty, the king at length consented to pay 6 per cent. interest, but the principal sum was not discharged until forty years afterwards. The number of private banks in London about 1793 was fifty-six, of which only twenty-four are now in existence. The business of a bank may be classed under the following heads:-1. Discounting bills of exchange. 2. Advancing money on cash credits. 3. Receiving deposits at interest. 4. Keeping current accounts for customers. 5. Issuing notes. 6. Acting as agents for others. Private bankers in London do not make any charge of commission to their customers, and generally grant facilities to them, both by discounting bills and by temporary loans, either with or without security. Even where this kind of accommodation is not required, it is almost a matter of necessity for every merchant or trader carrying on considerable business to have an account with a banker, through whom he makes his payments, and who will take from him the daily trouble of presenting bills and cheques for payment. At various times some banking establishments in London have adopted the principle of allowing interest upon deposits placed in their hands. The practice of most of the joint-stock banks is to allow a moderate interest, depending on the market-value of money, for any sum exceeding 100l., provided that it is not withdrawn by the depositor in less than three months. Some of these banks receive deposits as low as 107.; and |