The Old Lady

In 1694, London had a foreign king, a nourishing stock exchange, a wealthy merchant class, and a war with France. All four sorely needed a bank. Harassed, Holland-born King William III of Orange, whose war-financing was down to the level of the nation's hock shops, asked a willing Parliament to approve the establishment of a Bank of England. Soon after, a corporation was formed and -L-1,200,000 raised by public subscription. With 19 employes, and a dim consciousness of its mission, the bank opened for business in Mercers' Chapel. In 1734 it moved to a building of its own on Threadneedle Street, in the center of London. It is still there.

But last week many an Englishman hearing Labor's Harold Laski demand the immediate nationalization of the Bank of England (see FOREIGN NEWS) wondered how long it would stay what it has been for over two centuries--the world's most powerful private bank.

Some Englishmen shuddered, for

around their bank they had woven a legend of imperishability. It had withstood run after run, from at home and abroad (the French revolutionaries tried a week-long run in 1793). In 1780 it even withstood fire; London mobs, led by the maniacal Lord George Gordon, stormed it with torches. But the mobs were stood off by soldiers and clerks, who melted inkstands into bullets.

Assault by Trickery. There were other legends--of the forgers who assaulted the bank by trickery (and, until the middle of the 19th Century, risked death in the doing). Most pitiful of the swindlers was a young clerk named Philip Whitehead. He presented a fraudulent bill on a city firm, was promptly caught and hanged. His 19-year-old sister lost her mind at the news. For the next 25 years, until her death, she called at the bank daily to inquire for her brother. In legend, she became the "bank nun." Until 1924, the bank occupied a low, fortress-like pile dominating London's City, was known as The Old Lady of Threadneedle Street. (Despite its ponderous look, a workman once found his way from the street through building cracks and into the bullion room.) It withstood the bombs of the Luftwaffe.

Its governors were world powers. In the 19th Century, the pound sterling, under the bank's leadership, became a universal currency -- a circumstance shattered by World War I which broke up the gold standard, and left England debt-ridden. In the post-World War I period, under recently-retired Governor Montagu Collet Norman, it reestablished the gold standard for six years, thereafter became a virtual adjunct of the British Treasury.

Assault by Dogma. Last week, day after the Laski speech, Bank of England stock, which rates as a trustee security, fell -L-9 1/2, down to -L-357 1/2. Governor Thomas Sivewright Catto and his fellow bankers sat tight. Nationalization would mean that the bank's -L-14,533,000 capital stock, held by some 35,000 Englishmen, would be bought by the British Treasury.

But there were many questions. How fully would the stockholders be compensated? Would the Government put new officers into the bank, and change its policies? What would nationalization do to Britain's financial position in the world?

Actually the change, if made, would bring few immediate shocks. Throughout the wars, the bank has worked closely with Britain's Government. But a tradition of the Empire, as well as a symbol of free enterprise, would die if the Old Lady joined the Government. Many a Briton hoped that Harold Laski was running years ahead of his socialist brethren.

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