300 Years of History : Museum Allows Peek at Bank of England

The Bank of England, which has in the past guarded its secrecy as jealously as its gold reserves, is allowing the public a glimpse of life behind its stone walls.

A newly opened Bank of England Museum traces the history of the bank since its foundation in 1694.

Before the museum opened, passers-by could hope for a peep inside only when the bank’s pink-jacketed gatekeepers opened the giant bronze doors on Threadneedle Street.

Eight-Foot Thick Wall

A wall eight feet thick surrounds the building, allowing no space for windows. Designed by architect Sir John Soane, the walled curtain has perpetuated the aura of mystery since its completion in 1828.

Then came the Big Bang in 1986. The deregulation of London’s financial market brought modernization and electronics--and a great demand to know more about the bank with the mysterious image.

“People read about the Bank of England doing this or that and intervening in the foreign exchange market, but they didn’t really know much about it,” Peter O’Riley, deputy museum manager, said.

The museum is housed in the bank building, which visitors enter through a side door.

The chronological tour starts at the Bank Stock Office, reconstructed from Soane’s original design.

The hall contains a display of the architectural history of the bank, which began operations in temporary accommodations before moving to a venue known as Grocers’ Hall. It stayed there for 40 years.

A new building on Threadneedle Street was completed in 1734. A few years later, Soane, the eccentric architect whose design for his wife’s tomb inspired the shape of the famous British red telephone booth, rebuilt much of the bank.

Seven-Story Building

A huge increase in staff during World War I necessitated further expansion. Soane’s one-story building was replaced with the seven-story building that houses the bank, but his original windowless wall remains.

Beyond a statue of King William III, during whose reign the bank was established, are scenes depicting the 17th-Century goldsmiths who had a virtual monopoly on money lending before the Bank of England was born.

The bankruptcy of five goldsmiths when King Charles II reneged on his debts highlighted the need for a public bank.

The museum was inaugurated by Queen Elizabeth II on Nov. 16, 1988, the 300th anniversary of the ascension to the throne of William and his wife Mary in 1688.

Their reign brought political stability, but war with France depleted the national coffers and made setting up a central bank a matter of urgency.

A young Scottish merchant, William Paterson, suggested founding a bank that would lend money to the government in return for certain privileges, namely the right to issue bank notes.

His book expounding the theory and the founding charter bearing the original royal seal are on display today.

Stock Subscription

The idea proved popular, and citizens subscribed 1.2 million pounds sterling for stock in the institution that was to be called “the Governor and Company of the Bank of England.”

Later, the bank became known--not so affectionately at first--as “the Old Lady of Threadneedle Street,” a nickname that has stuck.

In 1797, war with France forced a restriction on cash payments. Notes could no longer be freely converted to gold, and low-denomination notes were issued for the first time.

Richard Brinsley Sheridan, a playwright and member of Parliament, called the bank “an elderly lady in the city of great credit and long standing who had ultimately fallen into bad company.”

Cartoonist James Gillray took up the image, depicting the bank as a spinster clothed in pound notes and receiving unwanted attentions from the prime minister. The original caricature hangs in the museum.

Sir John Houblon, a wealthy merchant, was the first governor. The dusty pink worn by the bank’s gatekeepers is thought to be the color of his household livery.

Every Thursday, when the Court of Directors meets in the elegant chambers of the bank, the gatekeepers don red capes and coned hats and carry black bamboo staffs.

The bank was nationalized after World War II.

Early Bank Notes Displayed

The earliest bank notes, some yellowed with age but still legible, are in the museum. Early forgeries are also on display.

A main attraction in the museum is a display of gold bars stacked beneath a glass pyramid. But their sparkle is deceptive--the 59 pieces of bullion are facsimiles. The real thing is kept under lock and key in an underground vault.

Only two bars of gold, each weighing 28 pounds, are shown to the public.

The bank has its own security force, but employees will not discuss security. Nor will they say how much gold is stored within the bank’s impenetrable walls, but it is believed to be one of the world’s biggest reserves.