An Unfinancial Chat on the Bank of England

Radio Record, Volume VI, Issue 29, 27 January 1933, Page 6

An Unfinancial Chat on the Bank of England

by

D. A.

NEAL

delivered from |! YA

TEPPING into the Bank. there is much S) that would hold the attention of the casual visitor or sight-seer. The gate porters in their bright uniforms, the Bank Garden with its beautiful War Memorial, of which more anon, to the bullion vaults. What thoughts they conjure up these days, and what scenes were enacted there in the years 1914-1918 and after! But if you were looking for sensation how disappointed you would be. No military procession to safeguard bullion movements through the streets of London. However necessary in some parts of the world, London has no need of them. ; Yes, the gold is kept in vaults without any of the of popular imagination. Guarded? Yes, of course, in the day by the staff in the course of its duties-at night by what is known as the nightly watch, composed of trusted senior officials, with a military guard in charge of the whole building. Were you to be admitted you would see the officials handling gold much as a grocer handles sugar. Scales, accurate enough to weigh a single hair of your head, are employed to weight the ingots, which reach: their resting-place here in the Bank-from all quarters of the globe, including our own Dominion. And banknotes, too! A whole volume could be written on the romantic story of the Portal family, the manufacturers of the banknote paper; of how they left France after the Revocation of the Edict of Nantes, preferring friendly exile coupled with freedom of thought and belief to the religious despotism of their native land. The privileged visitor would be shown the banknote for £1,000,000-one piece of paper representing a million of good English money. Were one privileged to accompany the visitor through the old corridors and offices now no more-later on I propose having a chat with you on the building which has superseded that to which I refer now-orie could point you to the scenes which have played so great a part in the country’s --yes, and Empire’s-affairs in the past. Here, for instance. in the front courtyard gathered the crowds during the few days prior to August 4, 1914, anxious to turn their banknotes into cash, fearful lest the Bank might disappoint them. The Bank disappointed no one, but did what it is very rarely called upon to do-it kept its pay hall open long after normal hours until everyone was paid out on that famous Saturday, August 2, 1914. It was here, too, that the peregrinations of the Zeppelin raiders over London in September, 1915, were watched by members of the Bank’s staff. Antwerp had received the unwelcome attentions of these nocturnal prowlers some time before. Invade London? Never-it could not be done. The bombs dropped in the vicinity told of the serious intent of the air attack on the Bank, however, but never a bomb reached its intended mark. During this and many subsequent raids over London, the Bank escaped being hit, although some shots might almost be recorded as "inners," to use the words of the professional marksman. How many listeners, who were in London in 1914, will remember the invasion of the Belgian refugees, fleeing before the oncoming German armies? With their savings-banks’ books they, too, found their way to the Bank to withdraw their savings, a curious scene in which everyone---directors and staff alike--gave of their best to relieve the distress of these homeless wanderers.

‘Here is the counter where a stocking holding’ £200 in gold was produced from under the wearer’s clothes to buy some War Stock and so’ help the Old Country during its period of stress, the mention of which reminds me of the lady who during the war wrote in saying that she would like to buy. some stock, but that her back garden was too small and she didn’t know where she could put it! HERE was the lady, too, to whom the terms conversion and power of attorney could: have meant but very little-if anything-who, keen to:help as far as she was able, wrote in asking for a "conversation" form, inquiring at the same time whether a power of eternity was necessary to enable her to comply with the terms of the Conversion Loan. : Speaking of investments, however, the palm goes, I thirik, to the Scotsman who deposited all his savings in a bank (not the Bank of England; of course) which offered something like 10 per cent. per annum on fixed deposits-this at a time when gilt-edged investments were paying about 24 to.3 per cent. This bank had its offices ‘1jot very far from the New Zealand High Commissioner’s present officks in the Strand. Ten per cent.! Yes, every (Continued on page, 23.

The Bank of . Enoeland

(Continued from page 6.)

time! and straight away went our’friend o insure capital and interest with one of Lloyd’s members after depositing the whole of his life’s savings with his bank. When the crash came -what. metry chuckles must baye been heard in‘at least one honie that night; We have all heard the phrase "as safe as the bank" so many times. and have grown up in the idea of the bank's stability, that it will probably be a surprise to many people to hear thit crises of oné sort or another have béeu only too frequent thoughout the bank's history. Attacks from without. civil comzmotions of varying degrees of serionsness, have given rise at different times to ho small amount of anxiety. Thrents of violence Were generally met in anticipation, that in 1715 giving rise to the passing of the Riot Act. In gfi22 the Jacobites gave trouble, but swith the arrest of the principal couspifators with whom was associated Bp. Atterbury, of Rochester, the trouble subsided, and the military defenders of the bank weré not called into action. The Gordon Riots assumed a more seri« ous aspéct, anid the defénce of the bats occasioned considerable loss. of life. What threatened, however, to be of 2 much more serious character was the Chartist rising in 1848. Demonstrations in sympathy were to be held all over the country, and guve some justification for the genetal alarm No one knew what the future had in its keeping, The Government of the day took fright, and to the Duke of Wellington was entrusted the safety of London. "Specials" were enrolled, and the military réinforced by all the metins available. The bank was the object of specinl attention, a company of Engineers \ from Woolwich being quartered within ‘T its wills, and the building put into 8 ’ state of defence At the time of the threatened attack there were present in the ,bank 200 bayonets, composed of the Gyards, an officer of the Royal Hngineers, 80 sappers.and miners, besides: some pension: ers and officers of the bank, In addition, something: like 600 special constables were held in readiness.. It was on the point of my tongue to say all for nothing, but it would be more correct to say that commonsense prevailed in the presence of overwhelming force, the Chartists dispersing without challenging the powers of the day. South Sea, Bubble. ANICS, too, disturbed the even course of business on many dcensions, in the history of the bank. The frequency of thesé panics and crises (the first of which was but a short two yegrs after the commencement of the bafhk’s activities), is only. too evident. THe formation of the South Sea Company is not without interest at this stage, coming as it did into active competition with the bank. The idea of the company was to take over the debts of the State for profit on terms into which I: need not go now. The bank made a bettér offer to the Government, but lost in its endeavour to monopolise this business-very fortunately for the bank, Curiously enough, this promotion: gave a great impetus to the speculu tive spirjt;: the South Sea Company’s stick rising to‘a premium of as much Y a8, 1330 par cent. A fearful rage for speculation’ followed.. Companies for all and every ‘conéeivable (as well: a5 ingonoejvable) purpose were promoted, among which were (quoting from a List of about 180 hew companies) :-~

Pollingtons for melting sawdust and Shavings into deal. boards of auy length. ee Fattening hogs. Poppy oil. Curing of broken-windéd harses and mires, . Curing of lunatie persons. Importing negroes. Importing asses from Spain (as though there wéren’t enough). Yor the extracting of silver from lead. The inevitable result of this. mad speculation followed, and the South Sea Company, sound %is it was originally, collapsed, bringing down in its. trdin miity whose only fault was overoptimism, Fortunate, indeed, was the bank, Its failure to compete success. fully with the now defunct South Sea Company proved to be its salvation. Frayds and Forgeries.

[is thumbing thé pages of Mr, Acre's book on the bank, one is surprised ut the frequency of the occurrence of frauds and forgeries both from without and within the bank, the latter during a period now happily remote. The threat of death by hanging or transportation to Botany Bay does not seein to have been a sufficient deterrent, — What was probably one of the biggest frauds perpetrated on the bank took place in 1803 by a proininent member of the staff-no less a person than the deputy cashier, who in the ordinary course of events would have sue+ ceeded to the position of chief cashier, Speculation had resulted itu heavy losses, and it required a sum between a quarter and half a million pounds to pay his debts. Embezzlement followed. but, thanks to counsel, the prisoner was acquitted. He was afterward tried on a more trivial phase of the same offence, found .guilty and sentenced to death, the sentence, for some unknown reason, being commuted to imprisonment. After 16 years in prison he appears to have heen liberated on condition that he left the country. A forger who gave the bank 2 considerable amount of trotble was known as "Old Patch," who used the services of another man to present his forgeries. The min (the understudy) was detected and found guilty, but was released from prison and cotnpensated, as the forgeries of which he had been held guilty continued to be received at the bank after hig iinprisonment, — . The real forger, however, did not continue for Jong, and finding his game up, Committed suicide and was buried as & suicide at some cross-road with a stake through his body, according to the custom of the day. . A fraud involving the loss to the bank of about a quarter of a million was perpetrated in 1824 by Henry Fauntleroy, 9 partner in a banking house. The frauds had extended over a perjod of nine years, and had been accomplished by the transfer of stock from his customers’ nanies on forged powers of attortiéy.’’ Not all the éfforts of his friends ¢ould save him from. the gibbet, where he paid the penilty of ‘his crime, hot

Bank Netes and. Frauds, BANKNOTES appear to hayé lent themselves to being forged with ease, and no efforts were spared by the bank to devise a note which could not be copied. Prior to 1725 the punishment for forgery wis imprisénment or the pillory, for in 1695 we read four men were fined considerable sums and stood in the pillory for cheating the Bank of England. But this did not prove sufficient deterrent, and the death penalty was imposed in the hope that the forger’s activities would be checked. It fell out otherwise, however, and the directors were drjven

to other methods to protect their notes from the forger, In this connection a curious story is told. In 1722 a forger who wis under sentence in Newgate Prison was visited by one of the bank cashiers, who sought information as to liow the paper coukl be improved. The forger most obligingly gaye some valuable ad vice in the matter, but his disinterested advice did not save him from transportation. , Investigators. URING the time of the prevalence of considerable numbers of forgeries, several of ‘the clerks were appointed to investigate the forgeries with a view to securing drrests and prosecution. These men, known as investigutors, made some awkward mistakes at times und were frequently taken to tisk by their directors, notably the investigator who, it was discovered, wus coucerned in a linen, drapery and pawnbroking business and that he was the partner in a business with a woman Who had been convicted for uttering forged notes and counterfeit coin! It is hardly surprising that his term of usefulness to the bank was terminated, But the story of George Morland; the pajnier, is probably the best worth telling; it is taken from Cunningham’s "Lives of the Most Eminent British Painters." as recounled by Acres :-

"On one occasion he (ie, Morland) hid himself in Hackney, where his anxious looks and secluded manner of life induced some of his charitable neighbours to believe him a maker of forged notes. The directors of the bank dispatched two of their most dexterous emissaries to inquire, reconnoitre, search, and seize. ‘These men arrived and began to draw lines of circumyallation round the palnter's retreat; he was not, however, to be surprised; mistaking those agents of evil men for bailiffs, he escaped from behind as they approached in front, fled into Hoston and never halted until he had hidden himself in London. Nothing wis found to justify suspicion, and when Mrs. Morland, who was his ¢companion in his retreat, told them who lier husband was, and showed them some unfinished pictures, they made such a report to the bank that the directors presented him, with a. couple of bank notes of £20 each by way of compensation for the alarm they had given him." The Old Lady of Threadnecdle St. ps spite of all these attacks from Without. and within-and their story.could be continued probably much beyond your ._powers. of endurancethe old lady of Threadneedle Street has survived the stress of the times, emerging, after. nearly two and .a half centuries, to command the affection of the race to which we are privileged to belong and the respect of the whole civilised world. War Memorial. REFERRED, in opening this chat, to the Bank’s war memorial. To quote from’ Robert Browning, whose father and grandfather both ‘had been in the service of the Bank, it was to commemocate: ' One who never turned his back, bit marched breast forward, Never doubted clouds would break, Never dreamed though right were worsted wrong would triwmph, etd, we fall to rise, are baffled to fight vetter, Sleep to awake. The Garden. "THER in the Bank garden, oncé the churebyard of the ancient parish of Saint Christopher le Stocks, with the old lime tree the nesting-place of the wood pigeon, is the statue cust iu bronze-a life size figure of St. Christopher. The sculptor has represented him after the passage of the stredm, coming up the further hank with the physical strain of crossing manifest in his. limbs and panting mouth. His face is wreathed in a smile at the Joy of his victory and his. eyes and lips express the awe and wonder with which he looks up to the mysterious child upon his shoulder and realises that the reward for all his service is after all only a crogsthe cross of sacrifice held out before him in the infant’s hand, Continuing my «uotation from the special memorial number of the staff migazine, the inscription on the statue reads :- To the comrades who at duty’s eall crossed the dark waters to the further shore, 1914-1919. The whole is mounted on u pedestal of Portland stone, bearing on its sides the names of 71 members of the staff who gave their lives in the Greut Wan