The Bank of England in 1900

This is what Arthur H. Beavan had to say about the Bank of England, in Imperial London, published in 1901:

Of the 850 millions sterling representing the nation's foreign trade, and the 14 millions of tons forming the Empire's shipping, 1900 London was responsible for so great a proportion that she may well be called the "Mart of Nations."

The banking operations necessitated by this enormous commerce, combined with her own home trade, ran into correspondingly big figures; a year's record of the Clearing House transactions reaching the colossal total of over 8000 million pounds sterling.

No institution was more typical of the prodigious growth of English prosperity in the previous two centuries than the Bank of England, called by William Cobbett, in the pages of his Political Register, the "Old Lady of Threadneedle Street," a title that has adhered to it.

The building, familiar to every one, occupies about three acres of ground, and is partly built upon the site of an old church, St. Christopher-le-Stocks, and is in three parishes.

Its architecture, by Sir John Soane, is Corinthian, and supposed to be a copy of the Temple of the Sybil at Tivoli.

It is one-storied throughout, except at the Cornhill front, where there are attics, and where alone there are external windows.

The rotunda, where the dividends on Government funds are paid, is the most striking portion of the Bank, a handsome domed chamber, where formerly the stock-brokers and jobbers used to meet and deal in stocks and shares; and adjoining it are the transfer offices.

On the Prince's Street side of the courtyard, into which the chief entrance of Threadneedle Street opens, was the private drawing-office, always a very busy place, crowded with "entering" and "posting" clerks, where figures ran large, more than £250,000 in gold frequently changing hands in one day.

From the windows of this big room could be had a glimpse of the Bank garden, a revelation to the uninitiated, for it contained real trees, under whose shade a fountain derived from an artesian well played, most refreshing to look at on a tropical day when the city was parched with heat.

This garden was originally a churchyard, and it is said that the body of an old Bank clerk, 7 1/2 feet in height, still reposes there!

North of the courtyard was the bank-note department.

In 1900 notes were never re-issued, but were immediately cancelled on their return to the place of their birth (they were printed in the building).

The cancelled notes were kept five years for reference if necessary, and then reduced to ashes in a furnace.

Amongst other curious souvenirs preserved in the Bank are the Bank-note autograph-book, containing the signatures - each one on an unsigned note - of all distinguished visitors; a note for one million sterling, and another for £1000, with which Admiral Lord Cochrane paid his fine when falsely accused of spreading rumours about the supposed death of Bonaparte in 1814.

The amount had been raised in pennies by his Westminster constituents, and the note is endorsed by Cochrane to the effect that he hoped his innocence would one day be proved.

A courtyard, just within the fine Lothbury entrance, led to the bullion vaults, inaccessible to visitors except by special order, and even then a director or other Government official had to accompany them.

In this courtyard could often be seen vans laden with uninteresting-looking ingots of silver, or with bars of gold that individually measure 8 x 3 x 1 inches, worth about £800 each; too heavy, however, to be walked off with.

A lock - to open which required several keys, each one being in the possession of different individuals - gave access, through heavy iron doors, to the dimly-lighted, heavy-vaulted, white-washed cellar containing untold wealth; bars of gold, in trucks to facilitate removal, and gold coin in bags piled against the wall in lavish carelessness, 35 to 40 millions sterling being not infrequently stored here.

Every sovereign or half-sovereign sent into the Bank was weighed with unfailing accuracy by means of wonderful little automatic machines, some of which had been in use ever since the Great Exhibition of 1851, when they were first shown to the public.

Almost in the centre of the building were the noble pillared court-room with its lobby; the Governor's room and antechamber; and the discount-office, etc.

A familiar sight in the London streets towards evening, used to be files of Grenadier Guards marching from their barracks to take up their quarters for the night inside the Bank, a custom dating from the year of the Gordon Riots, 1780.

By 1900 they came by train to the Bank, where they were made very comfortable, the commanding officer, it is said, being provided by the Governors with a dinner for himself and two friends.

But this was not the only safeguard enjoyed by the Old Lady of Threadneedle Street; for certain clerks watched and patrolled her premises, and several of the "heads" of departments lived at the Bank.

Memorable eras in the Bank of England's history are briefly as follows:

The Panic year, 1844, when the Charter Act was superseded, the rate of discount going up to 9 per cent and the bullion reduced to only seven millions;

The Overend Gurney disaster of 1866, when, on Black Friday, the Bank-rate jumped up to 10 per cent, and every kind of even good security became unsalable;

The Baring-Argentine collapse of November 1890, on which occasion the Bank averted a terrible financial disaster, and headed a guarantee fund of 17 millions, to strengthen the reserves, besides borrowing a large amount of gold from the Bank of France, which was, however, never required.

Under the heading "Banks and Bankers in London and Suburbs," we find a grand total of over two hundred, which did not include their numerous branches.

Most of the two hundred were run on the Joint Stock principle; and judging by its popularity, banking must, on the whole, have been a profitable business, though much affected by the prevailing conditions of finance and trade; activity of the latter being always accompanied by a brisk banking business, and vice versa.

When commercial enterprise prospered in the provinces, money was attracted to other centres than London.

It left quickly, and did not so readily return; the result being to restrict supplies, so that bankers were unable to increase their terms for advances; for money was in the Money Market a commodity like any other article of merchandise.

In the matter of profits, let us take a few of the leading Banks in 1900 as examples.

The London and Westminster, upon its paid-up capital announced a distribution of 15 1/2 percent for 1899.

The Union Bank of London declared a dividend of 12 percent for the same year, which was its Diamond jubilee, and it was stated that since its establishment it had paid away to its fortunate shareholders no less than nine millions.

In 1899, Lloyd's Bank earned 20 percent; the London and County Banking Co. a like dividend; the London Joint Stock Bank, 9 percent; the National Provincial Bank of England, 17 percent; the Capital and Counties Bank, 18 percent; and a similar rate was credited to the London, City, and Midland Bank.

The head offices of those "other" Banks were grouped together in the City, not very far from the Bank of England; in Lombard Street, and the lanes branching off it; in Threadneedle Street, Lothbury; Prince's Street, Cornhill; Old Broad Street, etc.

They were substantially built, but not remarkable for size or grandeur, and compared unfavourably in these respects with the palatial establishments of the kind in America and Australia, except perhaps Lloyd's Bank, 72, Lombard Street, the building running back to Cornhill, an imposing edifice with fine grey granite pillars and wide frontage, the inside being lofty and dignified, well lighted, and very convenient for customers.

They all had the usual spacious strong-rooms in the basement, the large room crowded with clerks, the stately liveried-porters' or messengers' rooms, the manager's and secretaries' rooms, glass-partitioned, and the comfortable board-room overhead, where, if report does not err, a remarkably good glass of sherry or madeira was generally to be had at the luncheon-hour.

In the City, one looked in vain for the old private Banking-houses that used to abound, dark and low-pitched, with quaint and primitive counters, dingy parlours at the back, fire-buckets in the hall, and formidable-looking blunderbusses and pistols - a terror to would-be thieves - on the wall.

Private Banks were almost things of the past; the tendency being towards Limited Liability and amalgamation, so as to reduce competition and increase profit; such as the union of the City Bank with the London and Midland, the taking over by Lloyd's Bank of two important County concerns, the Chester and North Wales Bank of Williams and Co., and the County of Gloucester Bank; and. the union of the Imperial Bank with the London Joint Stock Bank.

Yet London Banks were not permitted to have the field to themselves, and it was stated at a meeting of the Institute of Bankers that in 1899 - so much had competition in banking grown - thirteen first-class foreign houses, whose united capital amounted to about 50 millions sterling, had offices in London.

Next: Mercantile London in 1900: The Bankers' Clearing House