The Bank of England, 2017. © Joyce Hampton
The Huguenots are well known for their highly prized skills as silk weavers, but their talents encompassed a wide range of other areas that still enhance our daily lives. One area of Huguenot influence is the world of finance and the input in particular by two families, one Walloon and one Huguenot, both French-speaking Protestants.
To understand the substantial Huguenot input in this sphere we need to go back in time. For many centuries, merchants had traded with their foreign counterparts to import or export goods from one country to another by means of bills of exchange and offsetting mercantile debt. Books detailing these transactions were painstakingly written up by the scriveners employed by the merchants. During the early fourteenth century we find Venetian money changers had enhanced this service to encompass holding deposits on behalf of their clients, thus becoming the first recognised form of private banking.
It was during the reign of Elizabeth I that Sir Thomas Gresham, using the same principle as the Bourse in Amsterdam, instigated England’s version - The Royal Exchange - in order to provide a central place for brokers and exchange dealers, but this idea failed to prosper into more than a meeting place for City merchants. The Royal Mint, used to house gold and bullion until 1640, had been accommodated in the Tower of London. Charles I, in desperate need of money at the outbreak of the Civil War, appropriated all of this store and only agreed to return it once an unsecured loan of £40,000 had been awarded to him. The alternative means at the Government’s disposal for raising loans was to apply to various goldsmith bankers, but they were on one occasion faced with the Government defaulting on the interest due on a loan of £100,000.
By the reign of William III (1689-1702) and his wife Queen Mary (1689-1694), there were other considerations that needed to be reflected upon. William, who was also Prince of Orange, Stadtholder of the United Provinces of the Netherlands, felt his new country should be assisting his homeland in its war with France. This desire was to have far-reaching consequences, one of which led to the foundation of the Bank of England.
Ever since the Commonwealth (1649-1660) there had been voices raised in support of a bank in London similar to that of Amsterdam or Hamburg, but the debates continued to rumble on without resolution. In 1694 action was at last taken when Charles Montagu, Lord of the Treasury and newly appointed Chancellor of the Exchequer, sponsored the proposal put forward by William Paterson to establish the Bank of England. Paterson’s idea had been for a ‘fund of perpetual interest’ thus promoting the idea of a permanent National Debt, and in order to offer viability to this idea he also provided Montagu with the names of promoters willing to back the scheme with their own money.
The Bank of England was incorporated by Act of Parliament in 1694. The sole reason for its inception had been to raise funds necessary for the Government to wage war in the Netherlands against France, as William III was keen for English participation. If you click on this link original-bank-subscribers you will be able to view the 1694 Bank of England Index of Subscriptions. At the top of page one is the entry for William III and his wife, and on page 23 you will see the entries relating to the three Houblon brothers and Sir John Houblon’s son who were all to play a significant role in the Bank’s early years. On numerous pages you will see countless Huguenot surnames, making this document worth more than a cursory glance.
Furthermore, a royal charter permitting the bank to function as a joint-stock bank with limited liability was granted. This was a unique status as no further banks were granted permission to operate in this way until 1826 and it gave the Bank of England considerable advantages.
Large numbers of Huguenots and Walloons had fled to these shores especially at times of heightened religious persecution, including the Houbelon family. The first of the Houbelons, Jean, had come from Lille to this country in 1567.
The family went on to become wealthy merchants and financiers who, over time, became firm friends with Samuel Pepys, having first met through business transactions when Mr Pepys hired ships owned by the Houbelon family. James Houblon, grandson of Jean, anglicised his surname by dropping the silent ‘e’ and had a close connection with the Stock Exchange for most of his adult life, hence his fellow merchants conferring upon him the title pater bursae Londinensis, which translates as ‘Father of the Stock Exchange’. The friendship was further strengthened when in 1679 Pepys was arrested and imprisoned in the Tower of London on the charge of being a Papist and the Houblons came to his assistance by putting up bail for him.
James had married Marie Du Quesne, who in time gave birth to seven sons including James (1629-1700), John (1632-1712), and Abraham (1640-1722), who were all among the first directors of the Bank of England. John had married Marie Jurin, also of Flemish refugee stock, and in 1671 he acquired the lease on a house in Threadneedle Street. John Houblon, was greatly respected by his peers; he was a merchant whose reputation for honesty and integrity was well known, as was his public spiritedness. He became Sheriff of London between 1689-90 and was an Alderman from 1689 until 1712. His public standing was further enhanced when he was knighted in 1689. Then, in 1695, Sir John became Lord Mayor of London and was elected to serve as Member of Parliament for Bodmin during three Parliaments.
Following the foundation of the Bank of England, it was the Houblon family, Sir John in particular, who stepped forward to invest money in this newly formed bank, along with his brothers, James and Abraham, and it was John who was elected to be the first Governor of the Bank of England on 10 July 1694. He was to hold this position until 25 March 1696, when under the terms of the Charter, he was re-elected by a General Court of Proprietors, remaining in office until July 1697.
The Bank of England was first situated in Mercers’ Hall in August 1694, and opened for business with a staff of just nineteen, before relocating to Grocers’ Hall after taking out an eleven-year lease in December 1694 for the cash sum of £500 and a loan of £5,000 without interest for the duration of its tenancy. It was during this period that according to the historian Sir John Clapham the Bank ‘passed from an experiment into a public institution’.
The Bank did not renew this lease, but instead the Directors took the decision to build new premises of its own. Some years earlier, in 1724, an estate in Threadneedle Street had been purchased for the sum of £15,000. The most significant building on this plot had been the house and gardens of Sir John Houblon. After the death of Lady Houblon in 1732 it was agreed ‘to build a new public office for the Bank, upon the bank’s estate in Threadneedle Street’. The Houblon house, although spacious, had restricted access as the only path leading to it was a narrow alleyway, and this led to a decision being taken to raze the house to the ground and clear an area for a new building to house the Bank. In time the site of the church of St Christopher-Le-Stocks and the adjoining graveyard were to be cleared to further the expansion of the Bank.
By the time of this relocation, in 1734, the Bank of England’s status had grown to such acclaim as to become the most respected financial institution in England; furthermore, this esteem led to it becoming a banker for other banks. The banking system went from strength to strength as small bankers who retained balances with the Bank of England were then able to settle debts amongst themselves.
The Bank of England was to remain in private hands until an Act of Parliament came into law on the 14 February 1946 which enabled all the Bank stock to be brought into public ownership.
The Bank of England: History and Functions. Bank of England Archives (8A245/1), pp. II-VII.
R. D. Richards, The Early History of Banking in England (RLE Banking and Finance), London (1958), pp 1-2, 4-5, 11, 17, 19, 23-25, 31.
Houblon, Lady Alice Archer, The Houblon Family: Its Story and Times: Volume 1, London (1907), pp. 42, 95, 114-15, 200-225.