“Let’s kick out those Huguenots !”

Not at first, when they first began trickling into London in 17th century.  Some of them who had been fleeced of their money in France were useful as sedan-chair carriers, others to earn a penny or two every week brushing away horse dung from the streets.  Which some had to do every few minutes, there being so much traffic.  But when hundreds started arriving, being kicked out of France for being Protestants by Louis XIV’s Edict of Fontainebleau (1685) — and then thousands — and settling into ghettos — then the hue and cry went up from Londoners — that is, the ordinary ones, fearing for their jobs.

Until the government, noting how skilful many Huguenots were — taking silk-weaving and clock-making to far higher levels and bringing new skills besides — passed an Act allowing then to stay.  This was useful because 40-odd Huguenots had became very good merchants and, when King William III was broke, needing money to re-equip his army and navy against a French invasion, lent him the money he needed in 1696.  It was a life and death situation all over again for the Huguenots !

They exacted a price, though. They want 8% p.a. and, to make sure of getting it, took over the Lottery, which was the government’s main method of raising money.  The Huguenots also asked for a privilege — to print money to sell or lend to the public — banks in those days being very small and exclusive. When granted, the merchants promptly called themselves the Bank of England, lent the government 1,800,000 gold sovereigns, and then printed £1,800,000 banknotes to lend to the public.  They doubled their money immediately !

From then on, the Bank of England and the UK Treasury Department have been hand in glove.  No matter what they say about the Bank being independent.  Central banks very rarely are.  What’s interesting in this particular period of its history is whether the Bank will survive at all if the world economy is anywhere near a steady-state.  It’s certainly not needed at the present time.

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