necessary to answer their ordinary demands, they could not conveniently take out of their current cash, so large a sum as a million, without embarrassment; they therefore invented the following, which answered all the purposes, and shows the profound financial skill with which they managed : They opened a subscription for a million, which they renew annually; wherein the subscribers advance ten per cent. and enter into a contract to pay the remainder, or any part thereof, whenever the bank shall call upon them, under penalty of forfeiture of the ten per cent. so advanced. In consideration of which, the bank pays the subscribers 4 per cent. interest, for the money paid in; and per cent. for the whole sum they agree to furnish; and in case a call should be made upon them for the whole, or any part thereof, the bank further agrees to pay them at the rate of 5 per cent. per annum for such sum, until paid; which they are under obligation to do, at the end of the year. By this means, the bank obtains all the purposes of keeping a million of money by them; and the subscribers, if no call is made upon them, (which is in general the case,) receive 61 per cent. for the money advanced; yet the company gains £23,500 by the contract; as will appear by the following account, viz: The bank receives from the government, for the advance of a million, £30,000; and they pay the subscribers, who advance £100,000 and agree to pay, when called upon, £900,000 more-£6,500; making a clear gain to the bank of £23,500, or $104,444.44. Bank stock may not improperly be called a trading stock, since with this they deal largely in foreign gold and silver, and in discounting bills of exchange; besides which, they are allowed by the government large sums annually for the management of the annuities paid at their office. In terms of the act of 7 Anne, chapter 7, the bank advanced on the original annuity, £100,000, the sum of £400,000, or $1,777,777.77 And there had been paid into the exchequer, in all, £1,600,000. In pursuance of the same act, the bank cancelled exchequer bills to the amount of £1,755,027.17.104, or $7,800,123.96, at 6 per cent. interest, and was allowed to double its capital. In the year 1708, the advances to the government amount£3,375,027.17.10, or $15,000,123.96, £4,402,343 00 00 ed to In 1709 there was paid in In 1710 there was paid in So that the capital is now 656,204 01 9 501,448 12 11 £5,559,995 14 08 or $24,700,092.11. By the 3d of George 1, chapter 8, the bank cancelled £2,000,000 of exchequer bills, which made the advances to government £5,375,027.17.101, or $23,889,012.84. By the 8th of George 1, chapter 21, the bank purchased South Sea Company stock £4,000,000, or $17,777,777.77. To enable the bank to effect this purchase, it increased its capital by subscription, in the year 1722, £3,400,000, and at this time the bank had advanced to the state, in various ways, in all £9,375,027.17.101, or $41,666,790.62; though its capital stock was only £8,959,995.14.8, or $39,822,203.22. Thus it appears by this statement, that the bank had advanced a larger sum to the state than the whole amount of its capital, on which it paid a dividend to the proprietors, and this circumstance shows that the bank possessed an undivided capital, which had accumulated from its establishment, which is the fact; and it has continued to have an undivided capital ever since; for in the year 1746, the bank had advanced to government, on different occasions, the sum of £11,686,800, or $51,941,333.33, and the capital on which it had divided had been raised by several calls, to £10,780,000, or $47,911,111.11. In pursuance of the 4th George 3, chapter 25, the bank paid to government, for the renewal of its charter, the sum of £110,000, or $488,888.88. 4'44 At the same time it advanced towards the supplies on exchequer bills £1,000,000, or $4,444,444.44, to be paid in the year 1766. The charter was then renewed to the year 1786, and the dividend in 1767 was raised to 5 per cent., which on its now capital amounts to $2,635,111.10. Soon after the establishment of the bank, it assisted government, in anticipation of the land and malt taxes, and also by advances on exchequer bills, and other securities. In 1781, the advances in this way amounted to £8,000,000, in addition to the permanent debt of £11,686,800, making in all £19,686,800, or $87,496,888.88. On condition of advancing £2,000,000, or $8,888,888.88, on exchequer bills, at 3 per cent. interest, to be paid off from the sinking fund within three years, the bank obtained an extension of its charter to the year 1812. To enable it to make good, this advance, a call was made of eight per cent. on its capital; which was now increased to £11,642,400, or $51,744,444; and the dividend settled at 6 per cent., amounting to $3,104,646; and the total advance to government, on the land and malt taxes, and exchequer bills, amounted to £9,991,678, or $44,407,457.77; but in 1786, the sum was reduced to £6,634,872, or $29,488,320; and from thence, to 1793, the amount of these advances have fluctuated, from seven to nine millions. In 1788, the dividend was raised to 7 per cent., which continued to be the rate until 1807. The dividend, from 1767, to 1787, inclusive, at 51 per cent. per annum, is $56,868,880; and from 1788 to 1807, both inclusive, at 7 per cent. per annum, is $72,442,220. In the year 1800, the charter was renewed, by the 40th George 3, chapter 28; and continued to 1835, on condition of advancing to the public service £3,000,000, or $13,333,333.33, without interest, for six years, ending in 1806. In that year, it was stipulated, by 46 George 3, chapter 4, that these three millions should remain with the public, until six months after a definitive treaty of peace, at three per cent. interest, during the war; which is a present to the nation, of £60,000, or $266,666.66, and which shows the resources, and profitable trade of the bank of England. The circulation of the notes of this bank, in the years 1787 was £8,688,570, or $38,615,866.66 1806 was 17,093,570, or 75,971,422.22 73,872,844.44 1807 was 16,621,390, or 1810 was 21,000,000, or 93,333,333.33 In 1797 the bank suspended specie payments; and an act was passed for that purpose; which suspension was renewed annually. From the report of a committee, appointed in this year, to inquire into the state of the bank, the total credits were £17,597,293, or $78,210,191.10. The debt owing by government £13,770,390, or $61,201,733.33. Thus leaving a balance in favor of the bank, £3,826,903, or $17,008,457.77. Since that time the profits of the bank have been considerably augmented; and the proprietors have received bonuses, in addition to 7 per cent.; but, in April, 1807, the permanent dividend was fixed at 10 per cent. per annum; which, for twenty-two years, up to 1829, inclusive, is $113,837,768. Thus has this wonderful institution withstood the ravages of time!-the convulsions of nations!-the wreck of empires! the vicissitudes of war and peace!-diffusing life, light, and heat, throughout the immense regions of the body politic, from age to age, down to the present day! And its stability is now believed to be commensurate with the British empire. From the above well managed and prosperous institution, we will now turn our eyes to a rival institution, nearly simultaneous in its origin; which bid fair to supersede its competitor; and, for a time, outvied it in the magnitude of its operations, and the splendor of its achievements; but, in a few short years, from bad management, exploded; spreading devastation and horror in its progress; convulsing the nation to its centre; and had well nigh sapped the vitals of the throne. BANK OF FRANCE, CHARTERED IN THE YEAR 1716. The French nation, though less enterprising than the English, in every thing relative to commerce, have yet, in some respects, successfully imitated them. But, in the particular instance of banking, they have not been so fortunate; owing, more to causes connected with their political institutions, than to any want of knowledge, genius, or activity in the people. In the year 1716 a bank was established in Paris, by the celebrated John Law, of Lauriston. The object of this bank, according to Mr. Law's professions, was to increase the circulation of money; To put a stop to the progress of usury; To facilitate the exchange between Paris and the provinces ; Augment the circulation of manufactures; |