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  • Full lecture [Watch]
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“We start with a riot!” Far from being a dry history of English banking, Murphy told of the drama, intrigue and violence of its past. She began by retelling the events of 7th June 1780, in which rioters attempted to storm the Bank of England. Murphy used the riot to identify the key themes that underpin the creation and early history of an institution at the heart of the development of the British financial system.

Today the Bank of England stands as a living monument to the revolutionary innovations of seventeenth century finance in Britain. However, its original purpose was not necessarily to facilitate the management of an increasingly complex English economy. Rather, its creation was a product of the state’s desire to wage war.

It is easy to take its presence for granted, however, the Bank of England was never intended to be a permanent pillar of modern banking. Its charter decreed its termination in August 1705, following the repayment of capital: it was “a sticking plaster for a wound expected to close quickly.” The Bank lived on borrowed time.

What ensured the survival of the Bank, Murphy argued, was the continuation of war which demanded that loans be issued and funds raised. At times of peace, the anticipation of future wars required that resources be stockpiled. The cost of this was immense. The Bank of England’s primary purpose became the management of state debt. Britain’s ability to sustain such a high burden of debt without descending into political and economic chaos demonstrates the effectiveness of the state financial system.

As a result, the Bank became one of the primary mediators between the state and the public. Murphy explored the ways in which the Bank constructed an image of itself as a symbol of trust in the state’s financial promises. This trust grew as the Bank became part of the rhythms of London life; as the city and business grew, so did the Bank. Even its architecture and interior design projected an image with a clear message: capital invested here is secure.

Throughout the lecture, Murphy presented slides that captured the audience. She highlighted James Gillray’s cartoon, ‘Political Ravishment or The Lady of Threadneedle Street in Danger!’ (1797). The Bank was clearly believed to be worthy of protection, not from rioters this time but from the state.

Yet, Murphy also explored the many contemporary criticisms of the Bank. The Bank’s close relationship with the state was deemed problematic, its monopoly on state finance dangerous and its control on public debt too expensive to maintain. At times it overstepped its brief. For example, the Bank of England took matters of law and order into its own hands. It investigated and prosecuted felons that had crossed its path and temporarily developed a reputation in the early nineteenth century as a “bringer of suffering and death.” With its involvement in the financing of wars and as a quasi-institution of criminal justice, the Bank gave new meaning to the term ‘blood money.’

Despite this, however, Murphy concluded that the Bank of England maintained its reputation as the manager and symbol of the integrity of public credit in Britain. An efficient system of public debt met the needs of both the state and individual. Through its mobilisation of military resources, the national debt created a ‘virtuous circle’ in which the waging of wars protected existing markets and created new ones, yielding even greater financial returns. Murphy ended with an eye towards the future and briefly highlighted new areas of research on financial history to the potential future historians in the audience.

The 2016 History of Capitalism lecture series throws the spotlight on the role played by cities and regions that stand out in particular moments within the History of Capitalism.


About the Speaker

Anne Murphy is Reader in History and Associate Dean for Research in the School of Humanities at the University of Hertfordshire. She moved into academia after spending twelve years working in the City trading interest rate and foreign exchange derivatives. Her research focuses on early modern financial markets and investment behaviour and the organisation and management of the 18th-century Bank of England. She is currently working on a sourcebook for the British Academy Records of Social and Economic History series, entitled “The Worlds of the Jeake Family of Rye, 1639-1773” and a monograph, entitled “Virtuous Bankers: a day in the life of the eighteenth-century Bank of England”. She is the Secretary of the Economic History Society’s Women’s Committee, whose primary purpose is to promote the careers of women in economic and social history. It also promotes women’s history and feminist approaches to economic and social history. Her publications include articles in History, Financial History Review and Economic History Review and a monograph entitled “The Origins of English Financial Markets: investment and speculation before the South Sea Bubble”, which was awarded the Economic History Society’s first monograph prize in 2010. She is book reviews editor for the Economic History Review and editor of Routlege’s Financial History Series.

About the History of Capitalism Series​

This series of lectures, which forms part of the Legatum Institute's 'The Culture of Prosperity' programme, investigates the origins and development of a movement of thought and endeavour which has transformed the human condition. Capitalism's characteristic emphasis on freedom of trade and market expansion has encouraged social mobility, global exploration and intellectual curiosity. Wherever and whenever it has appeared across the world's continents capitalism has undermined monopolies, economic protectionism and restrictive practices. The series' lecturers therefore assess case studies in business history and the individual biographies of thinkers, writers and inventors as well as describing particular periods in the histories of cities, states and nations. Further information available here.