Page:International Library of Technology, Volume 89.djvu/21

6 severe storms, and in 1697, owing to a disorder in state finances, it was obliged to declare a partial suspension of payment. Through the support of Parliament, however, it was again established on a sound financial basis. Thirty-eight years after its foundation, on Thursday, August 3, 1732, the comer stone of the new building was laid, in the presence of the governor and other officials of the bank, in Threadneedle Street. The directors moved the bank to the new location in June, 1734, and from that time "The Old Lady of Threadneedle Street" has occupied the massive building devoted to its use.

7. The successful institution of the Bank of England led to the formation of the Bank of Scotland in July, 1695. It enjoyed a monopoly during the early period of its history, owing to the fact that its charter made it illegal for any other company to set up the business of banking for 21 years. The bank was allowed to loan on real or personal security at not more than 6 per cent., but was prohibited from employing its stock or profits in any other manner than the loaning or borrowing of money on interest and the negotiation of bills of exchange. It was forbidden to purchase land or advance money to the government in anticipation of any sums to be granted by Parliament except those on which a loan should be authorized by a specific act. At first, the bank received no deposits from the public, its business consisting of the circulation of its own notes on the credit of the subscriptions paid in. A run was begun on the bank in December, 1704, and it was obliged to suspend specie payments. The proprietors of the bank adopted the device of making its outstanding notes bear interest until they were paid, which resulted in keeping the notes at par. The bank was finally able to meet its obligations and was undisturbed until 1715, when for a short period it was again obliged to resort to the same device. The monopoly granted by its charter expired in 1716 and no steps were taken to renew it. Soon after the expiration of its charter several banks were organized, and for some time entered into keen competition with the Bank of Scotland.