Founding of the Bank of England, financial and commercial “revolutions”

Founded on July 27th, 1694 by royal charter under William and Mary (two of its original stakeholders), one of the institution’s major duties was to keep ownership of the nation’s debt and to help manage finances for the war with France.[1]

The foundation of the bank represented a crucial milestone of the Commercial Revolution, which had begun in Europe as early as the 11th century. In England, the Commercial Revolution would define the nature of the relationship between the state and the economy. As a tool of the monarchy, the bank was an attempt minimize the influence England’s creditors could exert on the crown. The bank was the beginning of the economic transition from agricultural goods and raw materials to an economy reliant on banking, stock exchange, and insurance. This new service economy was part of a symbiotic relationship with England’s growing mercantile fleet that generated the demand for the services. In fact, the Bank of England began as a joint-stock operation.[2]

The strength of England’s financial service sector caused ripple effects throughout English society. Well before the foundation of the bank, the new class of wealthy clerks and merchants laid the foundations of the British middle class. The most successful of these early financiers pushed their way into influential political positions, since they possessed the capital that the land-rich aristocracy lacked. An early example, Thomas Cromwell used his foothold in trade to become a successful lawyer and was one of the major players in the English Reformation.[3] His distant relative, Oliver Cromwell, would control England for five years as Lord Protector. The bank marked the institutionalization of whole sector of professions that had long been looked down upon and demonstrated the success of these professionals in securing their stake in the country as a whole.

[1] “Our History.” Bank of England, 5 Dec. 2017, www.bankofengland.co.uk/about/history.

[2] Henry Keyser, The law relating to transactions on the stock exchange, (Oxford [Oxfordshire]: Oxford University Press, 1850), 1.

[3] F. Donald Logan, “Thomas Cromwell and the Vicegerency in Spirituals: A Revisitation,” The English Historical Review, (July 1988): 103 (408): 658–67. JSTOR 572696

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