-Caveat Lector- http://www.skyenet.net/~gerryr/bofe3.html More Evidence on the Bank of England: Part 2 �1998 by Gerry Rough In part one of this essay, we have taken a serious look at some of the evidence that the Bank of England was involved in a conspiracy. Let's now finish with the evidence presented, then summarize what we have learned. Des Griffin also states that "the names of the founders have never been made public." It is appropriate here as well to digress in order to clarify the issue. Conspiracy theorists are quick to point out this fact as proof of a conspiracy. `If it were not a conspiracy, then why the secrecy surrounding this group?' so the argument would go. The fact of the matter is that indeed we do know who the founders were. The man given the historical credit for the founding of the Bank of England is none other than that of William Paterson himself, as stated earlier. If the conspiracy theorists want to know the names of the founders (plural), we know these as well. Richards' text names all of the original court of directors as well as the first Governor and the first Deputy Governor.[1] These would be the only group that could conceivably be called the founders. Lastly, if the conspiracy theorists want to know the names of the City merchants who helped Paterson promote his idea for a bank (which is really the real issue involved here -- not the other names ridiculously given this group by the conspiracy theorists), the point is moot at best. We don't know their names, but they neither profited from the Bank, nor did they ever have any voice in the operations of the Bank, which are the two points that the conspiracy theorists try to make in the first place. So the real mystery here is not the names of any person or persons associated with the Bank of England, but what the historical fuss is all about! While we are still on the subject of secret groups and anonymous names, Eustace Mullins writes the following: Paterson had found himself unable to work with the Bank of England's stockholders. Many of them remained anonymous, but an early description of the Bank of England stated it was "A society of about 1330 persons, including the King and Queen of England, who had 10,000 pounds of stock, the Duke of Leeds, Duke of Devonshire, Earl of Pembroke and the Earl of Bradford."[2] Mullins' source for this information was Clapham's text, The Bank of England: A History. It is extremely unlikely that Mullins used any other source. Below is the text Mullins used, which he failed to properly cite in his footnotes. Clapham writes: Early descriptions of the Bank call it a "Society consisting of about 1300 persons." To be exact, including the King and Queen, whose names were put down jointly by the Lords Commissioners of the Treasury for �10,000, .... A few other noblemen with considerable holdings -- the Duke of Leeds, the Duke of Devonshire, the Earl of Pembroke, the Earl of Bradford....[3] If we compare the similarity of the two statements, they are almost identical, making it unlikely that Mullins used another source. Further, Clapham's text is well known and readily available at any good library. Notice that Clapham's text is talking about the stockholders of the Bank of England. The pages quoted above are the first two pages of chapter VIII of Clapham's text, "The Proprietors of Bank Stock, 1694-1697." On the first page, page 273, Mullins was made aware that there were published accounts of the original subscribers of Bank stock. The following footnote is found at the bottom of page 273: Angliae Tutamen, p. 5. The Book of the Subscriptions contains 1520 entries; but some people subscribed in installments.[4] Again, another footnote only two pages later should have alerted Mullins to his obvious error: The Book of the Subscriptions has names, address and signatures.[5] So, Mullins has been caught deliberately fabricating his statement that some of the subscribers were anonymous. He was fully aware that the names were public material, yet stated otherwise. His probable source for this assertion is William Guy Carr, since Carr is mentioned as a bibliographical reference source. Rev. Charles E. Coughlin, Author of, Money! Questions and Answers, writes this of the Bank's beginning: But the British government now allows private individuals to coin and regulate money. How and when it did this come about? In 1694, William of Orange, King of England, needed money to raise an army for the purpose of keeping the Stuarts from regaining the crown. He went to the rich merchants in London to acquire this money. They agreed to lend it to him, provided he would give them the right of issuing bank notes against the indebtedness. This is the origin of the Bank of England. This privately owned bank began to manufacture money and substituted privately created money for the money formerly originated by the British government.[6] Actually, the question as stated has hints of an earlier point by Bill Still, that being that the English mint was sold to private individuals. As stated earlier, the ability to coin money and regulate its value is exclusive only to governments. It is highly doubtful that any government in history has ever given the authority to coin money to another body. Here again, another conspiracy theory writer has fabricated his facts for his audience. Nowhere did Father Coughlin ever read that the Bank of England coined money and/or regulated its value.[7] Father Coughlin's absurdity does not stop there. As it turns out, William of Orange was himself a Stuart. Any standard almanac will reveal that William III of Orange was King of England from 1689-1702. He was then succeeded by Anne, the second daughter of James II. Anne ruled from William's death in 1702 until her own death in 1714. William and Anne are the last of the restored Stuart Dynasty. As to the rest of Coughlin's statement, his facts are essentially correct.[8] Charles and Russell Norburn Describe the Bank's beginnings this way: In England, 1694, William III, needing money to carry on his war with France, sold to one William Paterson and his associates a charter to establish the Bank of England, and ordered the Goldsmiths to stop issuing their receipts. Thus the King sold his priceless monopoly -- of Fractional Reserve banking to the bankers. This system is used today in most all countries.[9] Here is another paragraph of multiple absurdities by a conspiracy writer. The notion that the Bank of England's charter was sold to William Paterson is grossly inaccurate at best. As mentioned earlier, the Bank drew its life from the Tonnage Act of 1694, not the sale of the Kings supposed monopoly. The goldsmiths were never told to stop issuing receipts, either. This issue was dealt with earlier since the same argument is in Eustace Mullins' text. It is almost certain that the authors got this issue from Mullins, since Mullins is one of the sources mentioned in the bibliographical notes at the end of the book. Dr. R.E. Search has another point of view on the same events. Search writes: Excerpt from Encyclopedia Britannica, 14th Edition, Vol. 3, p. 52: "Founders, John Thompson and Son -- Samuel C., Cashier, Isaac W. White..."[10] In this example, Dr. Search has made two major errors. First, the citation cites page 52 of Volume 3. This is incorrect. The real location is page 53. But the next error is literally the entire line. The entire line was inserted to make it look like William Paterson was not the original founder of the Bank of England. Nowhere on the page cited, nor anywhere in any of the writings of the era are the names of John Thompson, Samuel C. Thompson, or Isaac W. White ever mentioned in connection with the early history of the Bank of England. Let's take a look at the above quotation with more of Search's text to give it a context: THE ENGLISH BANKING SYSTEM FOUNDED Excerpt from Encyclopedia Britannica, 14th Edition, Vol. 3, p. 52: "Founders, John Thompson and Son -- Samuel C., Cashier, Isaac W. White. "The Bank of England was not the original scheme of William Paterson, its founder. As is usual in English political history, it came into being almost by the back door, deriving its life from the Tonnage Act of 1694..." As you can see, the inserted line gives some question as to whether William Paterson really was the original founder, although Search's use of the rest of the page of text makes the insertion somewhat confusing. The rest of the next two paragraphs quoted by Search is mostly correct, although still not void of sloppy research. Pat Robertson has this to say about the bank notes issued by the Bank in it's early days: In other words, under the government's authority, the Bank of England would issue paper money created out of thin air, which would in turn be loaned at interest to various borrowers. These notes were not backed by gold or silver, but by a fraction of the note representing its loan to the crown.[11] Robertson's argument that the Bank's notes were not backed by gold or silver is inaccurate. They were indeed backed by gold or silver, although not to the point of complete convertibility as the Hamiltonian system would be a century later with the advent of the first Bank of the United States. Andreades writes: The Bank of England from the outset adopted a different policy, that already followed by the goldsmiths and by the Bank of Sweden. "It purported to give in its bills of the equivalent of what it had received, but it never pretended to take the deposit for any other purpose than that of trading with it. It never professed to make its issues square exactly with its coin and bullion, though, of course, it made its liabilities square with its assets"... The English Government did not make the Bank's notes legal tender, and moreover the Bank had no thought of asking that they should do so, for the directors were not in favour of such a measure. One of them remarked, "it's nothing makes bank bills currant, but only because that all those who desire it, can go when they will, and fetch their money for them."[12] On this note as well, Robertson's lack of understanding comes from a check of his bibliography. There are no serious accounts of the Bank of England and it's history recorded. Further, the only two accounts that could be called reference sources would both be conspiracy writers: In this case, Still and Mullins. In neither case is this issue of convertibility ever mentioned. It would seem likely that Robertson has fabricated his statement. Bill Still again writes: Investors purchased shares in the Bank, called Consols. These Consols could never be redeemed and paid a stable rate of return of 12% per annum. Although records show that �1,250,000 had been pledged through the initial stock offering, only �720,000 in gold was ever received. As we will see time, and time again in the American central banking experience, in effect, the British government ended up paying nearly half the cost of the Consols for the initial investors.[13] Again, Still's ignorance is breathtaking. The term consols refers to a type of consolidated annuity. The term was not even invented until 1751, a full 57 years after the bank went into operation.[14] Further, if he had bothered to look it up in a dictionary he would have found something similar to the following: consol Chiefly British. A government bond in Great Britain, originally issued in 1751, that pays perpetual interest and has no date of maturity. Often used in the plural. Also called bank annuity. [Short for Consolidated Annuity.] [15] Still's source for the confusion on the issue is the following from Mullins, another conspiracy writer: After the success of his Waterloo exploit, Nathan Mayer Rothschild gained control of the Bank of England through his near monopoly of "Consols" and other shares... London was established as the primary center of exchange because of the "Consols" of the Bank of England, bonds which could never be redeemed, but which paid a stable rate of return.[16] As you can see, Still has done no serious research to find out whether his assumptions are correct. Hence, the conclusion that the term "Consols" refers to the shares of the Bank of England. Still got the 12% per annum from the same page that he got the second half of the quotation above. Even here again, Still has taken another conspiracy writer out of context. Mullins cites the 12% figure as the dividends of the Bank's Consols in the twentieth century, not 1694, assuming, of course, that Mullins is correct which at best is questionable. Consols are a form of debt management for the British Government, an unlikely source for such a high rate of return during the time period in question. Accounts of the 18th century time period usually hold rates of return in the 2-4% range. Still also asserts that only �720,000 in gold was ever received. His source for this is another conspiracy writer, G. Edward Griffin. The problem with Still's assertion is that Griffin neither says, nor implies, that the �720,000 was the entirety of what was received from the original stockholders. Griffin writes: Textbooks tell us that this [�1,200,000] was lent to the government at 8% interest, but what is usually omitted is the fact that, at the time the loan was made, only �720,000 had been invested...[17] So, Still has taken Griffin's research and further distorted it for conspiratorial consumption. Further, Richard's account suggests the original capital was paid up over five installments between June 1694, and July 1697.[18] Lastly, Still's statement that the Bank paid nearly half of the cost of the original stock has been unquestionably fabricated. In sum, another of Still's paragraphs with all of the points grossly inaccurate. G. Edward Griffin states the following: The new money created by the Bank of England splashed through the economy like rain in April. The country banks outside of the London area were authorized to create money on their own, but they had to hold a certain percentage of either coin or Bank of England certificates in reserve. Consequently, when these plentiful banknotes landed in their hands, they quickly put them into the vaults and then issued their own certificates in even greater amounts. As a result of this pyramiding effect, prices rose 100% in just two years. Then, the inevitable happened: There was a run on the bank, and the Bank of England could not produce the coin.[19] With the exception of the last sentence, the entire narrative has been fabricated. Even the hearsay inflation figure of 100%. There were no country banks during the time period in question. Between 1694 (when the Bank began its initial operations) and 1696 (when the first bank run took place) there were several still-born land banks, a "money bank," and two banking schemes that actually came to fruition: The famous Orphans' Bank, and that of the Millions Bank. The former being short-lived, the latter giving up on its banking operations to survive for a century before closing its doors permanently.[20] Perhaps there is no historical statement about the Bank of England more intellectually straining than that made by Wickliffe B. Vennard in his booklet, Chronological History of Money Since Babylon, though Vennard was completely unaware of what he was writing about: 1663-William III, King of England, appealed to the goldsmiths for a loan of $15 million, and the loan was granted. The goldsmiths held the people's gold in their vaults and issued gold receipts to the depositors when in need of funds. They then learned that all depositors would not call for their gold at one time, so they made loans up to ten times the money which they actually possessed, by issuing receipts for gold, which was not in their vaults.[21] The entire paragraph has been fabricated. Conclusion and Summary It is clear that conspiracy theorists on this issue are grossly wanting in their factual presentations. Let us now summarize the evidence gathered so far. Still's fabrications include the implication of the sale of the English mint and/or the privatization of the Crown's authority to coin or print English money, that Parliament was bribed into accepting the terms of the money changers, and that "legal counterfeiting" was instigated with the founding of the Bank. In another paragraph, Still never bothered to look up the term consols in a dictionary, took Mullins' research and distorted it not once but twice out of its original context, then distorted Griffin's research out of its context, then fabricated the notion that the Bank paid for nearly half of the original stock sold to the original stockholders. Also in Still's case, he freely admits the obvious anti-Semitism of his own source, yet continues to cite him as credible. Mullins, another of his sources, is heavily anti-Semitic as well, though Still does not recognize this in his writing. In the case of Mullins, his fabrications include the Bank of England being permitted to directly tax the people, that the charter forbade the goldsmiths from storing gold or issuing receipts, that the goldsmiths of the era were required to store their gold in the Bank's vaults, that the privilege of issuing notes was taken away by government decree and that the goldsmith's fortunes were confiscated and turned over to the Bank of England. Mullins also misquoted William Paterson, failed to give credit to Clapham as a reference source, then fabricated the idea that many of the original stockholders were anonymous. In the case of Des Griffin, he fabricated the idea that it was the City merchants who financed the Bank of England, and that the founders names have never been made public. Rev. Charles E. Coughlin's fabrications include the Bank coining money and regulating its value, and the implication that William of Orange was something other than a Stuart. Charles and Russell Norburn fabricated the idea that the Bank's charter was sold to William Paterson and his associates. Dr. R.E. Search deliberately inserted a line of text to make it look like William Paterson was not the original founder of the Bank of England. Pat Robertson's idea that the Bank's notes were not backed by gold or silver is at best inaccurate. It is also worthy of note that William Guy Carr, Still's source for much of his data on the early history of the Bank of England, fabricated the idea that Paterson conducted negotiations on behalf of the English government, and that the money lenders remained anonymous. He also fabricated the idea of a deliberate plan to plunge all nations into perpetual debt to the "international bankers." G. Edward Griffin's fabrications include, in his first quotation alone, two groups that never existed, a seven point plan, a meeting that never took place, and that the event at Mercer's Chapel was a private meeting. Included in this is two reference sources that neither state nor imply that any seven point plan was ever written which would "serve their mutual purposes." Griffin also misquoted Quigley, then failed to check Quigley's accuracy, then fabricated almost all of another entire paragraph regarding country banks between 1694 and 1696. Wickliffe Vennard's entire paragraph was fabricated. As you can see from all of the evidence presented here, fabrications abound at virtually every turn of the page in conspiracy theory writings. As a group, only two can claim to have read any serious accounts of this important era of economic history. Even here, G. Edward Griffin somehow missed the first seven chapters of his main source on the early history of the Bank of England, and one of his own citations flatly contradicts one of his main assertions of conspiracy. Eustace Mullins has but one serious account in his bibliography: Writers on English Monetary History, 1626-1730, London, 1896 (as cited). Even this source has only background, not the specific history of the Bank itself that he would need to conduct any serious investigation of the facts. All others have not a single serious account of the early history of the Bank of England in their respective bibliographies. It is abundantly clear, then, that the notion that the Bank of England was involved in any conspiracy has been fabricated from the very start. Sources [1] R.D. Richards, The Early History of Banking in England (London: Frank Cass and Company, Ltd., 1958) 151 [2] Eustace Mullins, Secrets of the Federal Reserve: The London Connection (Staunton: Bankers Research Institute, 1993) 59 [3] Sir John Clapham, The Bank of England: A History (New York: The Macmillan Company, 1945) Vol. 1, p. 273-274 [4] Clapham, p. 273 [5] Clapham, p. 275 [6] Rev. Charles E. Coughlin, Money! Questions and Answers (no publication data given) 92-93 [7] The following should clarify the differing roles that each played during the bank run of 1696, a mere two years after the Bank began operations: "People generally wanted cash and the Mint could not supply it fast enough to the Bank, while, in addition, notes had been overissued and could be cashed only in part." J. Giuseppi, The Bank of England: A History from its Foundation in 1694 (Chicago: Henry Regnery Company, 1966) 29 [8] It should be clarified that the banknotes that the Bank of England issued were not fully legal tender for well over 100 years. The gold and silver coinage that they represented were legal tender. [9] Charles S. Norburn and Russell L. Norburn, A New Monetary System: Mankind's Greatest Step (Hawthorne, CA: Omni Publications, 1971) 54 [10] Dr. R.E. Search, Lincoln Money Martyred (Palmdale, CA: Omni Publications, 1989) 35 [11] Pat Robertson, The New World Order (Dallas: Word Publishing, 1991) 120 [12] A. Andreades, History of the Bank of England (London: Frank Cass & Co., 1909) Reprinted A.M. Kelly, 1966. P. 81-83 [13] Bill Still, On the Horns of the Beast: The Federal Reserve and the New World Order (Winchester, VA: Reinhardt & Still Publishers, 1996) 28 [14] Glyn Davies, A History of Money: From Ancient Times to the Present Day (Cardiff: The University of Wales Press, 1994) 269-270 [15] The American Heritage Dictionary of the English Language, Third Edition, � 1992 [16] Mullins, p. 58, 181 [17] G. Edward Griffin, The Creature from Jekyll Island (Appleton: American Opinion Publishing, Inc., 1995) 177 [18] Richards, p. 150 [19] Griffin, 178 [20] Clapham, p. 36 [21] Wickliffe B. Vennard, Chronological History of Money Since Babylon, p. 7,8. This 60-page booklet is available through Omni Publications, P.O. Box 900566, Palmdale, CA 93590 Additional Sources B.L. Anderson and P.L. Cottrell, Money and Banking in England: The Development of the Banking System 1694-1914 (Vancouver: David & Charles, 1974) W.W. Carlile, The Evolution of Modern Money (New York: The Macmillan Co., 1901) Norman Angel, The Story of Money (New York: Frederick A. Stokes Company, 1929) Elgin Groseclose, Money and Man (Oklahoma: University of Oklahoma Press, 1976) W.A. Shaw, The Theory and Principles of Central Banking (London: Sir Isaac Pitman & Sons, Ltd.) J.F. Ashby, The Story of the Banks (London: Hutchinson & Company, 1934) L.W. Mints, A History of Banking Theory: In Great Britain and the United States (Chicago: The University of Chicago Press, 1945) R.H. Howe, The Evolution of Banking: A Study of the Development of the Credit System (Chicago: Charles H. Kerr & Company, 1915) N.F. Hoggson, Banking through the Ages (New York: Dodd, Mead & Company, 1926) H. Thornton, An Enquiry into the Nature and Effects of the Paper Credit of Great Britain (London: Frank Cass & Co., 1939) Reprinted, New York: A.M. 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