took measures to substitute monks for canons in his cathedral church at Sherborne; and the king restored to the church of Rochester the lands of which he had robbed it in his youth. Thames in ninety-four war vessels, eager to plunder | were busy, and Wulfsige, Bishop of the Dorsætas, the wealthy London of the Saxons. The brave burghers, trained to handle spear and sword, beat back, however, the hungry foemen from their walls -the rampart that tough Roman hands had reared, and the strong tower which Alfred had seen arise on the eastern bank of the river. But it was not only to such worldly bulwarks that the defenders of London trusted. On that day, says the chronicler, the Mother of God, "of her mild-heartedness," rescued the Christian city from its foes. An assault on the wall, coupled In 1009 the Danes made several vain attempts on London. In 1013 Sweyn, the Dane, marched upon the much-tormented city of ships; but the hardy citizens were again ready with bow and spear. Whether the bridge still existed then or not is uncertain; as many of the Danes are said to have perished in vainly seeking for the fords. The son), says Mr. Freeman, we find a new element, assaults were as unsuccessful as those of Sweyn and the "lithsmen," the seamen of London. "The Olaf, nineteen years before, for King Ethelred's great city still retained her voice in the election of right hand was Thorkill, a trusty Dane. "For the kings; but that voice would almost seem to have fourth time in this reign," says Mr. Freeman, "the been transferred to a new class among the popu invaders were beaten back from the great merchant lation. We hear now not of the citizens, but of city. Years after London yielded to Sweyn; then the sea-faring men. Every invasion, every foreign again, in Ethelred's last days, it resisted bravely its settlement of any kind within the kingdom too, enemies; till at last Ethelred, weary of Dane and in every age, added a new element to the populaSaxon, died, and was buried in St. Paul's. The tion of London. As a Norman colony settled in two great factions of Danes and Saxons had now London later in the century, so a Danish colony to choose a king. settled there now. Some accounts tell us, doubt now almost become a Danish city (William of Malmesbury, ii. 188); but it is, at all events, quite certain the Danish element in the city was numerous and powerful, and that its voice strongly helped to swell the cry which was raised in favour of Harold." Canute the Dane was chosen as king at South-less with great exaggeration, that London had ampton; but the Londoners were so rich, free, and powerful that they held a rival gemot, and with one voice elected the Saxon atheling Edmund Ironside, who was crowned by Archbishop Lyfing within the city, and very probably at St. Paul's. Canute, enraged at the Londoners, at once sailed for London with his army, and, halting at Greenwich, planned the immediate siege of the rebellious city. The great obstacle to his advance was the fortified bridge that had so often hindered the Danes. Canute, with prompt energy, instantly had a great canal dug on the southern bank, so that his ships might turn the flank of the bridge; and, having overcome this great difficulty, he dug another trench round the northern and western sides of the city. London was now circumvallated, and cut off from all supply of corn and cattle; but the citizen's hearts were staunch, and, baffling every attempt of Canute to sap or escalade, the Dane soon raised the siege. In the meantime, Edmund Ironside was not forgetful of the city that had chosen him as king. After three battles, he compelled the Danes to raise their second siege. In a fourth battle, which took place at Brentford, the Danes were again defeated, though not without considerable losses on the side of the victors, many of the Saxons being drowned in trying to ford the river after their flying enemies. Edmund then returned to Wessex to gather fresh troops, and in his absence Canute for the third time laid siege to London. Again the city held out against every attack, and "Almighty God," as the pious chroniclers say, "saved the city." After the division of England between Edmund and Canute had been accomplished, the London citizens made peace with the Danes, and the latter were allowed to winter as friends in the unconquered city; but soon after the partition Edmund Ironside died in London, and thus Canute became the sole king of England. It seems doubtful how far the London citizens in the Saxon times could claim the right to elect kings. The latest and best historian of this period seems to think that the Londoners had no special privileges in the gemot; but, of course, when the gemot was held in London, the citizens, intelligent and united, had a powerful voice in the decision. Hence it arose that the citizens both of London and Winchester (which had been an old seat of the Saxon kings) "seem," says Mr. Freeman, "to be mentioned as electors of kings as late as the accession of Stephen. (See William of Malmesbury, "Hist. Nov.," i. 11.) Even as late as the year 1461, Edward Earl of March was elected king by a tumultuous assembly of the citizens of London ;" and again, at a later period, we find the citizens foremost in the revolution which placed Richard III. on the throne in 1483. These are plainly vestiges of the right which the citizens had more regularly exercised in the elections of Edmund Ironside and of Harold the son of Cnut. The city of London, there can be no doubt, soon emancipated itself from the jurisdiction of earls like Leofwin, who ruled over the home counties. It acquired, by its own secret power, an unwritten charter of its own, its influence being always important in the wars between kings and their rivals, or kings and their too-powerful nobles. "The king's writs for homage," says a great authority, "in the Saxon times, were addressed to the bishop, the portreeve or portreeves, to the burgh thanes, and sometimes to the whole people." Thus it may clearly be seen, even from the scanty materials we are able to collect, that London, as far back as the Saxon times, was destined to On the succession of Harold I. (Canute's natural achieve greatness, political and commercial. CHAPTER XL. THE BANK OF ENGLAND. The Jews and the Lombards-The Goldsmiths the first London Bankers-William Paterson, Founder of the Bank of England-Difficult Parturition of the Bank Bill-Whig Principles of the Bank of England-The Great Company described by Addison-A Crisis at the Bank-Effects of a Silver Re-coinage-Paterson quits the Bank of England-The Ministry resolves that it shall be enlarged-The Credit of the Bank shakenThe Whigs to the Rescue-Effects of the Sacheverell Riots-The South Sea Company-The Cost of a New Charter-Forged Bank Notes -The Foundation of the "Three per Cent. Consols"-Anecdotes relating to the Bank of England aud Bank Notes-Description of the Building-Statue of William III.-Bank Clearing House-Dividend Day at the Bank. THE English Jews, that eminently commercial race, were, as we have shown in our chapter on Old Jewry, our first bankers and usurers. To them, in immediate succession, followed the enterprising Lombards, a term including the merchants and goldsmiths of Genoa, Florence, and Venice. Utterly blind to all sense of true liberty and justice, the strong-handed king seems to have resolved to squeeze and crush them, as he had squeezed and crushed their unfortunate predecessors. They were rich and they were strangers -that was enough for a king who wanted money badly. At one fell swoop Edward seized the Lombards' property and estates. Their debtors naturally approved of the king's summary measure. But the Lombards grew and flourished, like the trampled camomile, and in the fifteenth century advanced a loan to the state on the security of the Customs. The Steelyard merchants also advanced loans to our kings, and were always found to be available for national emergencies, and so were the Merchants of the Staple, the Mercers' Company, the Merchant Adventurers, and the traders of Flanders. Up to a late period in the reign of Charles I. the London merchants seem to have deposited their surplus cash in the Mint, the business of which was carried on in the Tower. But when Charles I., in an agony of impecuniosity, seized like a robber the £200,000 there deposited, calling it a loan, the London goldsmiths, who ever since 1386 had been always more or less bankers, now monopolised the whole banking business. Some merchants, distrustful of the goldsmiths in these stormy times, entrusted their money to their clerks and apprentices, who too often cried, "Boot, saddle and horse, and away!" and at once started with their spoil to join Rupert and his pillaging Cavaliers. About 1645 the citizens returned almost entirely to the goldsmiths, who now gave interest for money placed in their care, bought coins, and sold plate. The Company was not particular. The Parliament, out of plate and old coin, had coined gold, and seven millions of half-crowns. The goldsmiths culled out the heavier pieces, melted them down, and exported them. The merchants' clerks, to whom their masters' ready cash was still sometimes entrusted, actually had frequently the brazen impudence to lend money to the goldsmiths, at fourpence per cent. per diem; so that the merchants were often actually lent their own money, and had to pay for the use of it. The goldsmiths also began now to receive rent and allow interest for it. They gave receipts for the sums they received, and these receipts were to all intents and purposes marketable as bank-notes. Grown rich by these means, the goldsmiths were often able to help Cromwell with money in advance on the revenues, a patriotic act for which we may be sure they took good care not to suffer. When the great national disgrace occurred-the Dutch sailed up the Medway and burned some of our ships-there was a run upon the goldsmiths, but they stood firm, and met all demands. The infamous seizure by Charles II. of £1,300,000, deposited by the London goldsmiths in the Exchequer, all but ruined these too confiding men, but clamour and pressure compelled the royal embezzler to at last pay six per cent. on the sum appropriated. In the last year of William's reign, interest was granted on the whole sum at three per cent., and the debt still remains undischarged. At last a Bank of England, which had been talked about and wished for by commercial men ever since the year 1678, was actually started, and came into operation. That great financial genius, William Paterson, the founder of the Bank of England, was born in 1658, of a good family, at Lochnaber, in Dumfriesshire. He is supposed, in early life, to have preached among the persecuted Covenanters. He lived a good deal in Holland, and is believed to have been a wealthy merchant in New Providence (the Bahamas), and seems to have shared in Sir William Phipps' successful undertaking of raising a Spanish galleon with £300,000 worth of sunken treasure. It is absurdly stated that he was at one time a buccaneer, and so gained a knowledge of Darien and the ports of the Spanish main. That he knew and obtained information from Captains Sharpe, Dampier, Wafer, and Sir Henry Morgan incorporated by the name of the Governor and (the taker of Panama), is probable. He worked Company of the Bank of England. Both Tories zealously for the Restoration of 1688, and he was and Whigs broke into a fury at the scheme. The the founder of the Darien scheme. He advocated goldsmiths and pawnbrokers, says Macaulay, set the union of Scotland, and the establishment of a up a howl of rage. The Tories declared that Board of Trade. banks were republican institutions; the Whigs preThe project of a Bank of England seems to dicted ruin and despotism. The whole wealth of have been often discussed during the Common- the nation would be in the hands of the "Tonnage wealth, and was seriously proposed at the meeting Bank," and the Bank would be in the hands of of the First Council of Trade at Mercers' Hall the Sovereign. It was worse than the Star Chamber, after the Restoration. Paterson has himself de- worse than Oliver's 50,000 soldiers. The power scribed the first starting of the Bank, in his "Pro- of the purse would be transferred from the House ceedings at the Imaginary Wednesday's Club," 1717. of Commons to the Governor and Directors of the The first proposition of a Bank of England was new Company. Bending to this last objection, a made in July, 1691, when the Government had clause was inserted, inhibiting the Bank from adcontracted £3,000,000 of debt in three years, and vancing money to the House without authority the Ministers even stooped, hat in hand, to borrow from Parliament. Every infraction of this rule was £100,000 or £200,000 at a time of the Common to be punished by a forfeiture of three times the Council of London, on the first payment of the sum advanced, without the king having power to land-tax, and all payable with the year, the common remit the penalty. Charles Montague, an able councillors going round and soliciting from house man, afterwards First Lord of the Treasury, carried to house. The first project was badly received, as the bill through the House; and Michael Godfrey people expected an immediate peace, and disliked (the brother of the celebrated Sir Edmundbury a scheme which had come from Holland-" they Godfrey, supposed to have been murdered by the had too many Dutch things already." They also Papists), an upright merchant and a zealous Whig, doubted the stability of William's Government. The propitiated the City. In the Lords—always a money, at this time, was terribly debased, and the more prejudiced and conservative body than the national debt increasing yearly. The ministers Commons - the bill met with great opposition. preferred ready money by annuities for ninety-nine Some noblemen imagined that the Bank was inyears, and by a lottery. At last they ventured to tended to exalt the moneyed interest and debase try the Bank, on the express condition that if a the landed interest; and others imagined the bill moiety, £1,200,000, was not collected by August, was intended to enrich usurers, who would prefer 1699, there should be no Bank, and the whole banking their money to lending it on mortgage. £1,200,000 should be struck in halves for the "Something was said," says Macaulay, "about the managers to dispose of at their pleasure. So great danger of setting up a gigantic corporation, which was the opposition, that the very night before, some might soon give laws to the King and the three City men wagered deeply that one-third of the estates of the realm." Eventually the Lords, afraid £1,200,000 would never be subscribed. Never to leave the King without money, passed the bill. theless, the next day £346,000, with a fourth During several generations the Bank of England paid in at once, was subscribed, and the remainder was emphatically a Whig body. The Stuarts would in a few days after. The whole subscription was at once have repudiated the debt, and the Bank completed in ten days, and paid into the Ex- of England, knowing that their return implied ruin, chequer in rather more than ten weeks. Paterson remained loyal to William, Anne, and George. expressly tells us that the Bank Act would have "It is hardly too much to say," writes Macaulay, been quashed in the Privy Council but for Queen" that during many years the weight of the Bank, Mary, who, following the wish of her husband. expressed firmly in a letter from Flanders, pressed the commission forward, after a six hours' sitting. which was constantly in the scale of the Whigs, almost counterbalanced the weight of the Church, which was as constantly in the scale of the Tories." The Bank Bill, timidly brought forward, pur- "Seventeen years after the passing of the Tonnage ported only to impose a new duty on tonnage, for Bill," says the same eminent writer, to show the the benefit of such loyal persons as should advance reliance of the Whigs on the Bank of England, money towards carrying on the war. The plan" Addison, in one of his most ingenious and was for the Government to borrow £1,200,000, graceful little allegories, described the situation of at the modest interest of eight per cent. To en- the great company through which the immense courage capitalists, the subscribers were to be wealth of London was constantly circulating. H |