The 18th century was a formative one in finance, especially in Britain. The innovations of the ‘Financial Revolution’ and the accompanying respect for the importance of sound credit had resulted in an increasing ‘financialization’ of the economy. Though still scarce, credit was becoming more accessible, most of all for the increasingly indebted British state. When the French Revolution led to new wars between Britain and France, the system was tested as it hadn’t been before. It was also a formative century in print culture but the financial events of this era are preserved not only in written text but in caricature as well.

Bank of England

           From Threadneedle Street in central London, in a smaller headquarters than those which house the Bank nowadays, the Bank of England was profoundly affected by the wars of the French Revolution. The Bank had made large loans to the British state and faced, in early 1797, a financial panic that threatened to destroy its credibility as gold reserves dwindled. The Bank was founded a century earlier as a private joint-stock company operating under a royal charter. So, for its first century in operation and thereafter, it served the state while being separate from it. The Bank nonetheless benefited from state action in the crisis, most notably a decision to suspend convertibility of banknotes into gold in February 1797.

Gillray

           Covering the political and economic events of the day were not just newspapers and some of the first magazines, but caricatures as well, caricatures not published in papers but sold as standalone prints. Among the most famous caricaturists of the late 18th and early 19th centuries was James Gillray. He was behind sketches that illustrated the historic troubles of the Bank of England and the political circumstances of its rescue, or its takeover depending on one’s perspective. 

           Gillray was an artist and satirist born in 1756 and he went on to train in the Royal Academy of Arts, which had only been founded a few years after his birth. As a satirist, he employed caricature particularly well; Gillray was among the earliest political cartoonists. These cartoons covered more than just politics though; they form part of the historical record of many economic and social events in Britain from the 1780s through to 1810. Indeed, Gillray followed financial developments closely, both because they drove the politics of the day and because Gillray himself was at least tangentially involved in finance. Earlier in his career, the cartoonist was employed as an engraver of security documents, including banknotes.

Suspension

           During the wars with France that followed the French Revolution, many in Britain feared a French invasion. These fears seemed justified after the landing of over a thousand French troops in Wales on February 22nd, 1797. In the subsequent days, the minor invasion near the town of Fishguard caused a financial panic even though the French were quickly defeated there. The panic nonetheless caused a run on the Bank of England as people sought to convert their banknotes into gold. It came at the worst time as the Bank’s reserves had already been dwindling for two years.

           To relieve the Bank of England of this pressure, the convertibility of its banknotes into gold was suspended by the Prime Minister, William Pitt, on the weekend of February 25th and 26th. The decision was made by the government, rather than the Bank itself, so to preserve the latter’s image of credibility. This was supposedly a temporary measure but later that year, the Bank Restriction Act extended the suspension which went on to last over two decades. The Act had also authorized the printing of smaller denomination banknotes to replace gold and these notes became a useful prop in the work of caricaturists sketching the news of the day.

           The public became aware of the suspension the following Monday. Gillray immediately got to work and within two days, a caricature was published mocking the political context and consequences of the suspension. The cartoon was titled ‘Bank Notes, Paper Money, French Alarmists’. In it, Charles James Fox and Richard Sheridan, Whig rivals of the Tory Prime Minister, warn John Bull, personifying the English public, not to accept the paper notes given to him by Pitt himself. On the other side of the banker’s counter, William Pitt carries a quill behind his ear, as though he himself draws up the notes or has just returned from writing up the ‘Order of Council to the Bank of England’ posted on the bank counter.

‘Bank Notes, Paper Money, French Alarmists’, by James Gillray, 1797

           Despite Fox and Sheridan’s protests, John Bull takes the notes anyway, saying in his dialect, “I wool take it! – a’may as well let my Measter Billy hold the Gold to keep away you Frenchmen, as save it, to gee it you, when ye come over, with your domn’d invasion.” With these lines, Gillray is linking the suspension directly to the war effort. The partisan message is that the English would rather unenthusiastically live with Pitt’s decrees, if it meant winning the war, than accept his opponents’ disloyalty. The radical Fox especially was accused of pro-French sympathies in the wake of the French Revolution and Gillray himself lampooned him for this; note the tricolor bow on his hat.

           Gillray continued to cover events with another one of his caricatures, ‘Midas, Transmuting All into Paper’. This one was published on March 9th, just over a week after the suspension was first announced to the public. In this piece, the Prime Minister, a giant wearing a crown of banknotes, can be seen ingesting all the gold from circulation and exhaling paper notes to replace them. Pitt is like the inverse of the mythological Midas, transforming all the gold into paper, paper notes which filled the void caused by the government and the public’s hoarding of gold. Bank of England notes in circulation grew 50% from 1796 to 1800.

           The Prime Minister was tall, but by making Pitt a giant in the caricature and dressing him with a crown and robe, Gillray gives the impression that the suspension was a political act by an overpowering, if perhaps justified, ruler. The padlock on Pitt’s chest grandiosely reads “Power of Securing Public Credit”; critics of the suspension argued that this power was too concentrated in the hands of the Prime Minister. Thus, even the padlock imparts more criticism than praise of Pitt.

           Nonetheless, Pitt was no doubt a giant in his day, serving simultaneously as Prime Minister and the Chancellor of the Exchequer well before the age of 30. A Scottish politician, the 1st Earl of Minto, went so far as to call Pitt “the Atlas of our reeling globe” for leading Britain through some of the most threatening wars and tumultuous times the country has ever faced. It was a stressful period, militarily as well as financially; the clouds in the Midas caricature foreshadow a French invasion. Of course, the French coast itself isn’t far; along with a French fleet, the country is visible on the left of the drawing. For managing these crises, many have come to regard Pitt as being among the first ‘modern’ Prime Ministers, using the wars underway to expand the power of the state. The Bank Restriction Act was just one demonstration of this power.

‘Midas, Transmuting All into Paper’, by James Gillray, 1797

Restriction Act

           Whatever his skepticism, or even hostility, towards the opposition, Gillray was obviously far from alone in his apprehension towards the Prime Minister’s power. After the suspension was extended with the passage of the Bank Restriction Act, Richard Sheridan, one of the leaders of the Whigs insisted that the Bank had been taken advantage of. It was, he said, ‘an elderly lady in the City, of great credit and long standing who had unfortunately fallen into bad company’.

           Sheridan’s characterization of the events inspired Gillray to produce one of his most famous financial caricatures, published on May 22nd that year, shortly after the Bank Restriction Act received royal assent. In ‘Political-ravishment, or the Old Lady of Threadneedle-Street in danger!’, the Bank is personified as Sheridan’s elderly lady, dressed in £1 and £2 notes which, along with new copper coins, replaced many precious metal coins in circulation. Pitt, the lanky young man who became Britain’s Prime Minister at age 24 and had by now held the post for over 13 straight years, is reaching into her pockets for gold.

‘Political-ravishment, or the Old Lady of Threadneedle-Street in danger!’, by James Gillray, 1797

           Sheridan’s speech and Gillray’s caricature were the origin of the Bank of England’s nickname, the ‘Old Lady of Threadneedle Street’ and Gillray’s cartoon was likely the first appearance of the nickname in print. The old lady continues to be used as a personification of the Bank to this day. In the end, despite Fox and Sheridan’s consternation, her ‘great credit and long standing’ survived the suspension of the gold standard and the Bank Restriction Act.

Lesson

           Large wars invariably have financial impact. This was especially true for wars as extensive and prolonged as the French Revolutionary Wars and the Napoleonic Wars that followed. Arguably nothing on their scale had been seen before in Europe. It was obvious then that at least some of the institutions charged with preserving stability in such volatile times were bound to resort to drastic measures. For the Bank of England, this meant the suspension of the convertibility of its notes into gold. This era in British fiscal and monetary history lives on in caricatures, most notably those of James Gillray.

More from the Tontine Coffee-House

           Read even more about the Bank Restriction Act and the Battle of Fishguard that triggered the panic. Also learn how print culture interacted with one of the earliest financial bubbles: the South Sea Bubble.

Further Reading

1.      Haywood, Ian. “Paper Promises: Restriction, Caricature, and the Ghost of Gold.” Romanticism, Forgery and the Credit Crunch (Romantic Circles Praxis Series), 2012.

2.      Haywood, Ian. Romanticism and Caricature. Cambridge University Press, 2015.

3.      John, Keyworth. “The Old Lady of Threadneedle Street.” Bank of England Quarterly Bulletin, 2013, pp. 137–146.

4.      Lahikainen, Amanda. “‘British Asignats’: Debt, Caricature and Romantic Subjectivity in 1797.” Studies in Romanticism, vol. 53, no. 4, 2014, pp. 509–540.

5.      Wright, Thomas. The Works of James Gillray, the Caricaturist. Chatto & Windus, 1850.

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