Founding of the Bank of England

Timeline

1. 1691–1694London · LondonAfter William III took the throne, he drew England into the Nine Years' War against Louis XIV, with military costs far exceeding Restoration royal finances. Short-term borrowing carried high interest, and taxes were insufficient. William Paterson proposed a company of subscribers to lend a huge sum to the treasury, with interest paid by new taxes guaranteed by Parliament, while granting the company a charter to issue notes and take deposits. The Whig fiscal group saw this as a means of basing the war on public credit.
2. 1694Westminster and the City of London · LondonIn 1694 Parliament passed a funding act secured by tonnage and other duties, authorizing a bank charter for creditors subscribing £1.2 million. London merchants, Whig squires, and Dutch-Huguenot capital quickly filled the subscription, showing confidence in Parliament-guaranteed public debt. Tories and some goldsmiths opposed the monopoly and paper money but could not stop the legislation. William's government thereby obtained a war loan immediately available for use.
3. 1694Around Mercers' Hall in the City of London · LondonOn 27 July the Bank of England received its royal charter, with John Houblon as first governor and Paterson listed among the early directors. The bank delivered the loan to the treasury and began handling bills and deposits, converting the City of London's private capital into revolving national credit. This arrangement allowed the Nine Years' War to be sustained by long-term public debt rather than one-off exactions, becoming the starting point of Britain's fiscal-military state.