twelve hundred thousand pounds should be raised at what was then
considered as the moderate rate of 8 per cent.' In order to induce
the subscribers to advance the money promptly on terms so
unfavourable to the public, the subscribers were to be incorporated
by the name of the Governor and Company of the Bank of England. They
were so incorporated, and the 1,200,000 L. was obtained.

On many succeeding occasions, their credit was of essential use to
the Government. Without their aid, our National Debt could not have
been borrowed; and if we had not been able to raise that money we
should have been conquered by France and compelled to take back
James II. And for many years afterwards the existence of that debt
was a main reason why the industrial classes never would think of
recalling the Pretender, or of upsetting the revolution settlement.
The 'fund-holder' is always considered in the books of that time as
opposed to his 'legitimate' sovereign, because it was to be feared
that this sovereign would repudiate the debt which was raised by
those who dethroned him, and which was spent in resisting him and
his allies. For a long time the Bank of England was the focus of
London Liberalism, and in that capacity rendered to the State
inestimable services. In return for these substantial benefits the
Bank of England received from the Government, either at first or
afterwards, three most important privileges.

First. The Bank of England had the exclusive possession of the
Government balances. In its first period, as I have shown, the Bank
gave credit to the Government, but afterwards it derived credit from
the Government. There is a natural tendency in men to follow the
example of the Government under which they live. The Government is
the largest, most important, and most conspicuous entity with which