The ‘Bad Side Effects’ of Bank of England Policies Pale Next to Its History
When Theresa May told her Conservative Party this week that Bank of England policies have produced “bad side effects,” she didn't have this in mind.
The U.K. prime minister’s critique focused on how central bank actions have hurt savers and benefited the wealthy. But at least the BOE isn’t killing people in the streets, as happened — albeit accidentally — two centuries ago in London.
At that time, almost a century after it was founded, the BOE was at the heart of London’s growing financial district and a source of resentment among those who felt they weren’t seeing the benefits. Here’s what Anne Murphy, a historian at the University of Hertfordshire in England, told a recent lecture in London:
“Arguably, since the bank was regularly active in the courts as it sought to protect both its business and the financial system against the activities of coiners and forgers, it was itself viewed as a symbol of authority and repression.”
After the BOE was targeted during the Gordon Riots of 1780, the government agreed to provide it with a military guard. The soldiers would march between the bank and Westminster, with little regard for those in the way.
The great annoyance of Londoners is depicted in the above James Gillray cartoon from 1787, showing the soldiers on their march, trampling pedestrians with what appears to be total ambivalence.
A year after the publication of the cartoon, one of the soldiers bayoneted and killed a member of the public in his path. He was arrested and tried for murder but only found guilty of common assault.
Gillray is also responsible for the bank’s nickname ‘The Old Lady of Threadneedle Street’ (still used to this day) thanks to this illustration. It depicts then Prime Minister William Pitt trying to pick the pockets of the central bank to fund the Revolutionary Wars against France:
The bank’s association with London’s grisly history doesn’t end with killings on the street. Fast forward a few years and it was under fire for the ruthless way it pursued forgers. With the BOE’s banknotes becoming easier to imitate, there was an upsurge in forgeries and hangings, as it was the BOE’s responsibility to prosecute what was then a capital offence.
That’s seen in this parody bank note by George Cruikshank, a caricaturist and book illustrator who published the imitation in protest against the anti-forgery laws.
His depiction shows Britannia, the bank’s normal corporate seal, as a baby-eating monster. The pound sign is a noose, and the note has no number — ‘Ad Lib’ is instead printed as a reference to the seemingly unlimited number of forgery convictions.
Rather than being signed by the chief cashier, the note features the name of Jack Ketch, an executioner with notoriously bad aim, according to Murphy. Forging a Bank of England note remained punishable by death until 1832.