Page:The Bank of England and the State, 1905.djvu/17

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The Bank of England and the State.

subscriptions when its stock was offered to the public. Great monetary difficulties also arose through the operation of recoinage which took place at that time, and which withdrew large amounts of circulating medium from commerce. Great pressure was, moreover, exercised by the Government for further advances. This led to the Act of 1697, authorising the increase of the capital, new subscriptions for which amounted to £1,00l,171 10s., which sum, by the way, was repaid by a bonus year by year until 1707, when the stock was considered extinguished, so that in 1707 the capital of the Bank was again reduced to £1,200,000. But the Act of 1697 is of particular importance in that it enacted that, during the continuance of the Bank of England, no other Corporation, company, etc., in the nature of a bank should be allowed by Act of Parliament in the United Kingdom. This privilege was extended as regards private partnerships in 1709, when the Bank advanced a further £400,000 to the Government, and it was provided "that during the continuance of the Bank of England it shall not be lawful for any body politic whatsoever to be created, other than the Bank, or for any other persons to be united in partnership, exceeding six persons, in England, to borrow, owe or take up any sum or sums of money, on their bills or notes payable at demand, at any less time than six months." The chief source of profits and the chief function of the Bank, beyond its advances to the Government, were supposed to consist in issuing notes payable on demand; and for the next 120 years the above-mentioned clause, renewed as it was from time to time, effectually prevented any rival corporation being formed.

The capital of the Bank grew rapidly by way of calls and subscriptions; by 1710 it had increased to upwards of £5,500,000. In 1713 a further advance to the Government was made, and the Bank undertook to circulate 181,200,000 in Exchequer Bills, in consideration of which it obtained the extension of its Charter till 1742. In 1718 we see for the first time subscriptions for Government Loans received at the Bank, and from this period onward the Bank was employed as the agent of