Chapter XL: The Bank of England (2)

In 1808 Vincent Alessi, a native of one of the Italian States, went to Birmingham, to choose some manufactures likely to return a sufficient profit in Spain. Amongst others he sought a brass-founder, who showed him that which he required, and then drew his attention to "another article," which he said he could sell cheaper than any other person in the trade. Mr. Alessi declined purchasing this, as it appeared to be a forged bank-note; upon which he was shown some dollars, as fitter for the Spanish market. These also were declined, though it is not much to the credit of the Italian that he did not at once denounce the dishonesty of the Birmingham brass-founder. It would seem, however, from what followed, that Mr. Alessi was not quite unprepared, as, in the evening, he was called on by one John Nicholls, and after some conversation, he agreed to take a certain quantity of notes, of different values, which were to be paid for at the rate of six shillings in the pound.

Alessi thought this a very profitable business, while it lasted, as he could always procure as many as he liked, by writing for so many dozen candlesticks, calling them Nos. 5, 2, or 1, according to the amount of the note required. The vigilance of the English police, however, was too much even for the subtlety of an Italian; he was taken by them, and allowed to turn king's evidence, it being thought very desirable to discover the manufactory whence the notes emanated.

In December John Nicholls received a letter from Alessi, stating that he was going to America; that he wanted to see Nicholls in London; that he required twenty dozen candlesticks, No. 5; twenty-four dozen, No. 1; and four dozen, No. 2. Mr. Nicholls, unsuspicious of his correspondent's captivity, and consequent frailty, came forthwith to town, to fulfil so important an order. Here an interview was planned, within hearing of the police officers. Nicholls came with the forged notes. Alessi counted up the whole sum he was to pay, at six shillings in the pound, saying, "Well, Mr. Nicholls, you will take all my money from me." "Never mind, sir," was the reply; "it will all be returned in the way of business." Alessi then remarked that it was cold, and put on his hat. This was the signal for the officers. To the dealer's surprise and indignation, he found himself entrapped with the counterfeit notes in his possession, to the precise amount in number and value that had been ordered in the letter.

A curious scene took place in May, 1818, at the Bank. On the 26th of that month, a notice had been posted, stating that books would be opened on the 31st of May, and two following days, for receiving subscriptions to the amount of L7,000,000 from persons desirous of funding Exchequer bills. It was generally thought that the whole of the sum would be immediately subscribed, and great anxiety was shown to obtain an early admission to the office of the chief cashier. Ten o'clock is the usual time for public business; but at two in the morning many persons were assembled outside the building, where they remained for several hours, their numbers gradually augmenting. The opening of the outer door was the signal for a general rush, and the crowd, for it now deserved that name, next established themselves in the passage leading to the chief cashier's office, where they had to wait another hour or two, to cool their collective impatience. When the time arrived, a further contest arose, and they strove lustily for an entrance. The struggle for preference was tremendous; and the door separating them from the chief cashier's room, and which is of a most substantial size, was forced off its hinges. By far the greater part of those who made this effort failed, the whole L7,000,000 being subscribed by the first ten persons who gained admission.

In 1820 a very extraordinary appeal was made to the French tribunals by a man named J. Costel, who was a merchant of Hamburg, while the free city was in the hands of the French. He accused the general commanding there of employing him to get L5,000 worth of English bank-notes changed, which proved to be forged, and he was, in consequence of this discovery, obliged to fly from Hamburg. He also said that Savary, Duke of Rovigo, and Desnouettes, were the fabricators, and that they employed persons to pass them into England, one of whom was seized by the London police, and hanged. Mr. Doubleday asserts that some one had caused a large quantity of French assignats to be forged at Birmingham, with the view of depreciating the credit of the French Republic.

Merchants and bankers now began to declare that they would rather lose their entire fortunes than pour forth the life which it was not theirs to give. A general feeling pervaded the whole interest, that it would be better to peril a great wrong than to suffer an unavailing remorse. One petition against the penalty of death was presented, which bore three names only; but those were an honourable proof of the prevalent feeling. The name of Nathan Meyer Rothschild was the first, "through whose hands," said Mr. Smith, on presenting the petition, "more bills pass than through those of any twenty firms in London." The second was that of Overend, Gurney, and Co., through whom thirty millions passed the preceding year; and the third was that of Mr. Sanderson, ranking among the first in the same profession, and a member of the Legislature.

A principal clerk of one of our bankers having robbed his employer of Bank of England notes to the amount of L20,000, made his escape to Holland. Unable to present them himself, he sold them to a Jew. The price which he received does not appear; but there is no doubt that, under the circumstances, a good bargain was made by the purchaser. In the meantime every plan was exhausted to give publicity to the loss. The numbers of the notes were advertised in the newspapers, with a request that they might be refused, and for about six months no information was received of the lost property. At the end of that period the Jew appeared with the whole of his spoil, and demanded payment, which was at once refused on the plea that the bills had been stolen, and that payment had been stopped.

The owner insisted upon gold, and the Bank persisted in refusing. But the Jew was an energetic man, and was aware of the credit of the corporation. He was known to be possessed of immense wealth, and he went deliberately to the Exchange, where, to the assembled merchants of London, in the presence of her citizens, he related publicly that the Bank had refused to honour their own bills for L20,000; that their credit was gone, their affairs in confusion; and that they had stopped payment. The Exchange wore every appearance of alarm; the Hebrew showed the notes to corroborate his assertion. He declared that they had been remitted to him from Holland, and as his transactions were known to be extensive, there appeared every reason to credit his statement. He then avowed his intention of advertising this refusal of the Bank, and the citizens thought there must be some truth in his bold announcement. Information reached the directors, who grew anxious, and a messenger was sent to inform the holder that he might receive cash in exchange for his notes.

In 1843 the light sovereigns were called in. The total amount of light coin received from the 11th of June to the 28th of July was L4,285,837, and 2-3/4d. was the loss on each, taking an average of 35,000. The large sum of L1,400, in L1 notes, was paid into the Bank this year. They had probably been the hoard of some eccentric person, who evinced his attachment to the obsolete paper at the expense of his interest. A few years afterwards a L20 note came in which had been outstanding for about a century and a quarter, and the loss of interest on which amounted to some thousands.

And now a few anecdotes about bank-notes. An eccentric gentleman in Portland Street, says Mr. Grant, in his "Great Metropolis," framed and exhibited for five years in one of his sitting-rooms a Bank post bill for L30,000. The fifth year he died, and down came the picture double quick, and was cashed by his heirs. Some years ago, at a nobleman's house near the Park, a dispute arose about a certain text, and a dean present denying there was any such text at all, a Bible was called for. A dusty old Bible was produced, which had never been removed from its shelf since the nobleman's mother had died some years before. When it was opened a mark was found in it, which, on examination, turned out to be a Bank post bill for L40,000. It might, it strikes us, have been placed there as a reproof to the son, who perhaps did not consult his Bible as often as his mother could have wished. The author of "The American in England" describes, in 1835, one of the servants of the Bank putting into his hand Bank post bills, which, before being cancelled by having the signatures torn off, had represented the sum of five millions sterling. The whole made a parcel that could with ease be put into the waistcoat pocket.

The largest amount of a bank-note in current circulation in 1827 was L1,000. It is said that two notes for L100,000 each, and two for L50,000, were once engraved and issued. A butcher who had amassed an immense fortune in the war time, went one day with one of these L50,000 notes to a private bank, asking the loan of L5,000, and wishing to deposit the big note as security in the banker's hands, saying that he had kept it for years. The L5,000 were at once handed over, but the banker hinted at the same time to the butcher the folly of hoarding such a sum and losing the interest. "Werry true, sir," replied the butcher, "but I likes the look on't so wery well that I keeps t'other one of the same kind at home."

As the Bank of England pays an annual average sum of L70,000 to the Stamp Office for their notes, while other banks pay a certain sum on every note as stamped, the Bank of England never re-issues its notes, but destroys them on return. A visitor to the Bank was one day shown a heap of cinders, which was the ashes of L40,000,000 of notes recently burned. The letters could here and there be seen. It looked like a piece of laminated larva, and was about three inches long and two inches broad, weighing probably from ten to twelve ounces.

The losses of the Bank are considerable. In 1820 no fewer than 352 persons were convicted, at a great expense, of forging small notes. In 1832 the yearly losses of the Bank from forgeries on the public funds were upwards of L40,000.

It is said that in the large room of the Bank a quarter of a million sovereigns will sometimes change hands in the course of the day. The entire amount of money turned over on an average in the day has been estimated as low as L2,000,000, and as high as L2,500,000. At a rough guess, the number of persons who receive dividends on the first day of every half year exceeds 100,000, and the sum paid away has been estimated at L500,000.

The number of clerks in the Bank of England was computed, in 1837, at 900; the engravers and bank-note printers at thirty-eight. The salaries vary from L700 per annum to L75, and the amount paid to the servants of the entire establishment, about 1,000, upwards of L200,000. Some years ago the proprietors met four times a year. Three directors sat daily in the Bank parlour. On Wednesday a Court of Directors sat to decide on London applications for discount, and on Thursdays the whole court met to consider all notes exceeding L2,000. The directors, twenty-four, exclusive of the Governor and Deputy-Governor, decide by majority all matters of importance.

The Bank of England (says Dodsley's excellent and well-written "Guide to London," 1761) is a noble edifice situated at the east of St. Christopher's Church, near the west end of Threadneedle Street. The front next the street is about 80 feet in length, and is of the Ionic order, raised on a rustic basement, and is of a good style. Through this you pass into the courtyard, in which is the hall. This is one of the Corinthian order, and in the middle is a pediment. The top of the building is adorned with a balustrade and handsome vases, and in the face of the above pediment is engraved in relievo the Company's seal, Britannia sitting with her shield and spear, and at her feet a cornucopia pouring out fruit. The hall, which is in this last building, is 79 feet in length and 40 in breadth; it is wainscoted about 8 feet high, has a fine fretwork ceiling, and is adorned with a statue of King William III., which stands in a niche at the upper end, on the pedestal of which is the following inscription in Latin--in English, thus:--

"For restoring efficiency to the Laws,
Authority to the Courts of Justice,
Dignity to the Parliament,
To all his subjects their Religion and Liberties,
And confirming them to Posterity,
By the succession of the Illustrious House of Hanover
To the British Throne:
To the best of Princes, William the Third.
Founder of the Bank,
This Corporation, from a sense of Gratitude,
Has erected this Statue,
And dedicated it to his memory,
In the Year of our Lord MDCCXXXIV.,
And the first year of this Building."

Further backward is another quadrangle, with an arcade on the east and west sides of it; and on the north side is the accountant's office, which is 60 feet long and 28 feet broad. Over this, and the other sides of the quadrangle, are handsome apartments, with a fine staircase adorned with fretwork; and under are large vaults, that have strong walls and iron gates, for the preservation of the cash. The back entrance from Bartholomew Lane is by a grand gateway, which opens into a commodious and spacious courtyard for coaches or wagons, that frequently come loaded with gold and silver bullion; and in the room fronting the gate the transfer-office is kept.

The entablature rests on fluted Corinthian columns, supporting statues, which indicate the four quarters of the globe. The intercolumniations are ornamented by allegories representing the Thames and the Ganges, executed by Thomas Banks, Academician, the roses on the vaulting of the arch being copied from the Temple of Mars the Avenger, at Rome.

On the death of Sir John Soane, in 1837, Mr. Cockerell was chosen to succeed him in his important position. The style of this gentleman, in the office he designed for the payment of dividend warrants, now employed as the private drawing-office, is very different to the erections of his predecessor. The taste which produced the elaborate and exquisite ornaments in this room is in strong contrast to the severe simplicity of the works of Sir John Soane.

Stow, speaking of St. Christopher's, the old church removed when the Bank was built, says, "Towards the Stokes Market is the parish church of St. Christopher, but re-edified of new; for Richard Shore, one of the sheriffes, 1506, gave money towards the building of the steeple."

Richard at Lane was collated to this living in the year 1368. "Having seen and observed the said parish church of St. Christopher, with all the gravestones and monuments therein, and finding a faire tombe of touch, wherein lyeth the body of Robert Thorne, Merchant Taylor and a batchelor, buried, having given by his testament in charity 4,445 pounds to pious uses; then looking for some such memory, as might adorne and beautifie the name of another famous batchelor, Mr. John Kendricke; and found none, but only his hatchments and banners." Many of the Houblons were buried in this church.

"The court-room of the Bank," says Francis, "is a noble apartment, by Sir Robert Taylor, of the Composite order, about 60 feet long and 31 feet 6 inches wide, with large Venetian windows on the south, overlooking that which was formerly the churchyard of St. Christopher. The north side is remarkable for three exquisite chimney-pieces of statuary marble, the centre being the most magnificent. The east and west are distinguished by columns detached from the walls, supporting beautiful arches, which again support a ceiling rich with ornament. The west leads by folding doors to an elegant octagonal committee-room, with a fine marble chimney-piece. The Governor's room is square, with various paintings, one of which is a portrait of William III. in armour, an intersected ceiling, and semi-circular windows. This chimney-piece is also of statuary marble; and on the wall is a fine painting, by Marlow, of the Bank, Bank Buildings, Cornhill, and Royal Exchange. An ante-room contains portraits of Mr. Abraham Newland and another of the old cashiers, taken as a testimony of the appreciation of the directors. In the waiting-room are two busts, by Nollekens, of Charles James Fox and William Pitt. The original Rotunda, by Sir Robert Taylor, was roofed in with timber; but when a survey was made, in 1794, it was found advisable to take it down; and in the ensuing year the present Rotunda was built, under the superintendence of Sir John Soane. It measures 57 feet in diameter and about the same in height to the lower part of the lantern. It is formed of incombustible materials, as are all the offices erected under the care of Sir John Soane. For many years this place was a scene of constant confusion, caused by the presence of the stockbrokers and jobbers. In 1838 this annoyance was abolished, the occupants were ejected from the Rotunda, and the space employed in cashing the dividend-warrants of the fundholders. The offices appropriated to the management of the various stocks are all close to or branch out from the Rotunda. The dividends are paid in two rooms devoted to that purpose, and the transfers are kept separate. They are arranged in books, under the various letters of the alphabet, containing the names of the proprietors and the particulars of their property. Some of the stock-offices were originally constructed by Sir Robert Taylor, but it has been found necessary to make great alterations, and most of them are designed from some classical model; thus the Three per Cent. Consol office, which, however, was built by Sir John Soane, is taken from the ancient Roman baths, and is 89 feet 9 inches in length and 50 feet in breadth. The chief cashier's office, an elegant and spacious apartment, is built after the style of the Temple of the Sun and Moon at Rome, and measures 45 feet by 30.

"The fine court which leads into Lothbury presents a magnificent display of Greek and Roman architecture. The buildings on the east and west sides are nearly hidden by open screens of stone, consisting of a lofty entablature, surmounted by vases, and resting on columns of the Corinthian order, the bases of which rest on a double flight of steps. This part of the edifice was copied from the beautiful temple of the Sybils, near Tivoli. A noble arch, after the model of the triumphal arch of Constantine, at Rome, forms the entrance into the bullion yard."

The old Clearing House of 1821 is thus described:--"In a large room is a table, with as numerous drawers as there are City bankers, with the name of each banker on his drawer, having an aperture to introduce the cheque upon him, whereof he retains the key.

"A clerk going with a charge of L99,000, perhaps, upon all the other bankers, puts the cheques through their respective apertures into their drawers at three o'clock. He returns at four, unlocks his own drawer, and finds the others have collectively put into his drawer drafts upon him to the amount, say, of L100,000; consequently he has L1,000, the difference, to pay. He searches for another, who has a larger balance to receive, and gives him a memorandum for this L1,000; he, for another; so that it settles with two, who frequently, with a very few thousands in bank-notes, settle millions bought and sold daily in London, without the immense repetition of receipts and payments that would otherwise ensue, or the immense increase of circulating medium that would be otherwise necessary."

The illustration on page 475 represents the appearance of the present Clearing House. The business done at this establishment daily is enormous, amounting to something like L150,000,000 each day.

"All the sovereigns," says Mr. Wills, "returned from the banking-houses are consigned to a secluded cellar; and, when you enter it, you will possibly fancy yourself on the premises of a clockmaker who works by steam. Your attention is speedily concentrated on a small brass box, not larger than an eight-day pendule, the works of which are impelled by steam. This is a self-acting weighing machine, which, with unerring precision, tells which sovereigns are of standard weight, and which are light, and of its own accord separates the one from the other. Imagine a long trough or spout--half a tube that has been split into two sections--of such a semi-circumference as holds sovereigns edgeways, and of sufficient length to allow of two hundred of them to rest in that position one against another. The trough thus charged is fixed slopingly upon the machine, over a little table, as big as the plate of an ordinary sovereign-balance. The coin nearest to the Lilliputian platform drops upon it, being pushed forward by the weight of those behind. Its own weight presses the table down; but how far down? Upon that hangs the whole merit and discriminating power of the machine. At the back and on each side of this small table, two little hammers move by steam backwards and forwards at different elevations. If the sovereign be full weight, down sinks the table too low for the higher hammer to hit it, but the lower one strikes the edge, and off the sovereign tumbles into a receiver to the left. The table pops up again, receiving, perhaps, a light sovereign, and the higher hammer, having always first strike, knocks it into a receiver to the right, time enough to escape its colleague, which, when it comes forward, has nothing to hit, and returns, to allow the table to be elevated again. In this way the reputation of thirty-three sovereigns is established or destroyed every minute. The light weights are taken to a clipping machine, slit at the rate of two hundred a minute, weighed in a lump, the balance of deficiency charged to the banker from whom they were received, and sent to the Mint to be re-coined. Those which have passed muster are re-issued to the public. The inventor of this beautiful little detector was Mr. Cotton, a former Governor. The comparatively few sovereigns brought in by the general public are weighed in ordinary scales by the tellers."

The Bank water-mark--or, more properly, the wire-mark--is obtained by twisting wires to the desired form or design, and sticking them on the face of the mould; therefore the design is above the level face of the mould by the thickness of the wires it is composed of. Hence the pulp, in settling down on the mould, must of necessity be thinner on the wire design than on the other parts of the sheet. When the water has run off through the sieve-like face of the mould, the new-born sheet of paper is "couched," the mould gently but firmly pressed upon a blanket, to which the spongy sheet clings. Sizing is a subsequent process, and, when dry, the water-mark is plainly discernible, being, of course, transparent where the substance is thinnest. The paper is then dried, and made up into reams of 500 sheets each, ready for press. The water-mark in the notes of the Bank of England is secured to that establishment by virtue of a special Act of Parliament. It is scarcely necessary to inform the reader that imitation of anything whatever connected with a bank-note is an extremely unsafe experiment.

This curious sort of paper is unique. There is nothing like it in the world of sheets. Tested by the touch, it gives out a crisp, crackling, sharp music, which resounds from no other quires. To the eye it shows a colour belonging neither to blue-wove, nor yellow-wove, nor cream-laid, but a white, like no other white, either in paper and pulp. The three rough fringy edges are called the "deckelled" edges, being the natural boundary of the pulp when first moulded; the fourth is left smooth by the knife, which eventually cuts the two notes in twain. This paper is so thin that, when printed, there is much difficulty in making erasures; yet it is so strong, that "a water-leaf" (a leaf before the application of size) will support thirty-six pounds, and, with the addition of one grain of size, will hold half a hundredweight, without tearing. Yet the quantity of fibre of which it consists is no more than eighteen grains and a half.

Dividend day at the Bank has been admirably described, in the wittiest manner, by a modern essayist in _Household Words_:--"Another public creditor," says the writer, "appears in the shape of a drover, with a goad, who has run in to present his claim during his short visit from Essex. Near him are a lime-coloured labourer, from some wharf at Bankside, and a painter who has left his scaffolding in the neighbourhood during his dinner hour. Next come several widows--some florid, stout, and young; some lean, yellow, and careworn, followed by a gay-looking lady, in a showy dress, who may have obtained her share of the national debt in another way. An old man, attired in a stained, rusty, black suit, crawls in, supported by a long staff, like a weary pilgrim who has at last reached the golden Mecca. Those who are drawing money from the accumulation of their hard industry, or their patient self-denial, can be distinguished at a glance from those who are receiving the proceeds of unexpected and unearned legacies. The first have a faded, anxious, almost disappointed look, while the second are sprightly, laughing, and observant of their companions.

"Towards the hour of noon, on the first day of the quarterly payment, the crowd of national creditors becomes more dense, and is mixed up with substantial capitalists in high check neckties, double-breasted waistcoats, curly-rimmed hats, narrow trousers, and round-toed boots. Parties of thin, limp, damp-smelling women, come in with mouldy umbrellas and long, chimney-cowl-shaped bonnets, made of greasy black silk, or threadbare black velvet--the worn-out fashions of a past generation. Some go about their business in confidential pairs; some in company with a trusted maid-servant as fossilised as themselves; some under the guidance of eager, ancient-looking girl-children; while some stand alone in corners, suspicious of help or observation. One national creditor is unwilling, not only that the visitors shall know what amount her country owes her, but also what particular funds she holds as security. She stands carelessly in the centre of the Warrant Office, privately scanning the letters and figures nailed all round the walls, which direct the applicant at what desk to apply; her long tunnel of a bonnet, while it conceals her face, moves with the guarded action of her head, like the tube of a telescope when the astronomer is searching for a lost planet. Some of these timid female creditors, when their little claim has been satisfied (for L1,000 in the Consols only produces L7 10s. a quarter), retire to an archway in the Rotunda, where there are two high-backed leathern chairs, behind the shelter of which, with a needle and thread, they stitch the money into some secret part of their antiquated garments. The two private detective officers on duty generally watch these careful proceedings with amusement and interest, and are looked upon by the old fundholders and annuitants as highly dangerous and suspicious characters."

Among the curiosities shown to visitors are the Bank parlour, the counting-room, and the printing-room; the albums containing original L1,000 notes, signed by various illustrious persons; and the Bank-note library, now containing ninety million notes that have been cancelled during the last seven years. There is one note for a million sterling, and a note for L25 that had been out 111 years.

In the early part of the century, when "the Green Man," "the Lady in Black," and other oddities notorious for some peculiarity of dress, were well known in the City, the "White Lady of Threadneedle Street" was a daily visitor to the Bank of England. She was, it is said, the sister of a poor young clerk who had forged the signature to a transfer-warrant, and who was hung in 1809. She had been a needle-worker for an army contractor, and lived with her brother and an old aunt in Windmill Street, Finsbury. Her mind became affected at her brother's disgraceful death, and every day after, at noon, she used to cross the Rotunda to the pay-counter. Her one unvarying question was, "Is my brother, Mr. Frederick, here to-day?" The invariable answer was, "No, miss, not to-day." She seldom remained above five minutes, and her last words always were, "Give my love to him when he returns. I will call to-morrow."