The Research On The Reasons Of The Foundation Of The Bank Of England

The foundation of the Bank of England was maily after An Act for Granting toTheir Majesties Several Rates and Duties upon Tunnage and The Charter to theGovernour and Company of the Bank of England in1694.The reasons of itsfoundation was complex.The purpose of the author was to reveal the reasons of itsfoundation through analyzing the origin of the modern banking,the changes after theGlorious Revolution and the financial pressure during the Nine Years War.The paper consisted of three parts.In the first part,the author would explain therelative research summarization.The second was the main part,which contained three chapters.The first chapter mainly introduced the origin of the modern banking.The authoroverviewed the situations of the banking before the establishment of the Bank ofEngland through reviewing the rising of the modern European banking, the origin ofthe modern England banking and the struggle between the rising capitalist and theUsury Class.From the origin of the modern European banking, the modern bank firstappeared in Italy in the twelfth century.After that,with the transfer of the route,thebanking also spread from Italy to the others countries on the Atlantic coast, forexample,Holland, England and so on.From the origin of the banking in modernEngland,the gold-smiths were the early bankers.Their internal shortcomings causedthe struggle between the rising capitalist and the Usury Class,which promoted thefoundation of the Bank of England.The second chapter mainly researched the effects of the changes after theGlorious Revolution on the establishment of the Bank of England.From the political changes, after the Glorious Revolution,the political system changed to Limitedmonarchy，and the structure of the political rights had changed.This new arrangementin the political system was favorable to protect the interests of the lenders，which wasa great encouragement to the the establishment of the Bank of England.The whigcontroled the power in1694,which directly promoted the establishment of the Bank ofEngland. The fiscal changes Mainly included the Nationalization of taxes and theright of levying taxes shifting to the Parliament，the establishment of the system of thenational debt and the improvements in the fiscal management. After the GloriousRevolution, the Parliament grasped the fiscal right,who mainly represented theinterest of the lenders,which promoted the foundation of the Bank of England.The third chapter mainly researched the effects of the war to the foundation ofthe Bank of England.During The Nine Years War (1688-1697), the Militaryexpenditure increased rapidly.Under this great fiscal pressure, the proposal aboutestablishing a bank was adopted. On the one hand,the establishment of the Bank ofEngland absorbed the advanced fruits.on the other,it had some innovations.The third chapter was the epilogue of the paper,in which summarized the mainarguments of the paper.