eabhPapers|No.16-02|August2016

TheBankofEnglandandtheGenesisofModernManagement

AnneL.Murphy*

UniversityofHertfordshire

AbstractIn1965SidneyPollardpublishedTheGenesisofModernManagement,anextendeddiscussionoftheproblems,duringBritain’sinitialperiodofindustrialisation,ofthe‘internalmanagement’ofthefirm.But,inhisfocusonindustry,Pollardignoredoneofthelargest,mostsignificantandmostinnovativeoftheenterprisesofthelate-eighteenth-andearly-nineteenthcenturies:TheBankofEngland.ThispaperfocusesontheBankasasiteofprecociousmanagerialdevelopment.ItfirstestablishesthattheBank, by the latter part of the eighteenth century, encompassed the complexities of a large-scaleindustrialenterprise.Itemployedaworkforceofseveralhundred.Itsworkersoperatedinspecialisedandcoordinatedcapacities. Itsmanagerialhierarchywasdiffuseanddependentonemployedmen,rather than the elected directorate. The Bank, therefore, warrants comparison with the types ofenterprises identified by Pollard. Focusing on the 1780s, the paper then explores the Bank’sorganisationalandmanagementstructureagainstPollard’sfouraspectsofmanagement:‘thecreationandtrainingofaclassofmanagers;‘therecruitment,training,discipliningandacculturationoflabour’;theuseof‘accountancy,andotherinformation…intherationaldeterminationoftheirdecisions’andfinally the question of whether there emerged a ‘theory and practice of “management”’. It willdemonstratethat,althoughnotalwaysappliedeffectively,theBank’sseniormendidshowmanagerialinnovationandskillintrainingandorganisingtheworkforceandwereabletomakeinformeddecisionswhichhadthepotentialtoimprovesomeoftheBank’sprocesses.

Keywords:BankofEngland,managerialdevelopment,organisationalstructure,bankinghistory.

JELClassification:N00,N83,L2,J24,J50.

ThematerialpresentedineabhPapersispropertyoftheauthor(s)andshouldbequotedassuch.Theviewsexpressedinthis

workingpaperarethoseoftheauthor(s)anddonotnecessarilyrepresenttheviewsoftheeabhoritsmembers.

*AnneL.MurphyisReaderinHistory,UniversityofHertfordshire.Email:a.l.murphy@herts.ac.uk.

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Sidney Pollard’s seminal work posited that a lack of understanding of the genesis of

managementwasa‘glaringgap’inthehistoryofindustrialisingBritain.1Yethisownanalysis

remained narrowly focused on the factory and other large industrial processes. Forms of

economic activity that might have displayed similar complexity were mentioned only in

passing.Inparticular,Pollardfailedtoacknowledgeoneofthelargestandmostsignificant

enterprisesofthelate-eighteenth-andearly-nineteenthcenturies:theBankofEngland.This

paperwilldemonstrate that,hadPollard turnedhisattentionto theBank,hewouldhave

discovered factory-like organisation of ‘production’ with well-established and managerial

systemsinplaceandstrataoflower,middleandseniormanagement.

Pollard,alongwithothercommentatorsonthehistoryofmanagement,acknowledge

that elements of complex organisation existed long before industrialisation.2 Ancient and

classical civilisations planned, organised, controlled and centralised. But thesemanagerial

techniqueswereusedinsupportofreligious,politicalormilitaryendeavournotindustryor

commerce.3 Arguably, the systematic application of such techniques in the pursuit of

productionforprofitcamewithindustrialisationandrequiredprocesseswhichconstituteda

significantchallengefortheearlyentrepreneur.4Theseincludedtheneedtomanagealarge

amountoffixedcapitalandstocksofrawmaterials.Managementoflabourtoopresented

problems.Theworkforceneededtobemadetoconformtolongerandmoreregularhours

and oversight was required to ensure efficiency, maximise the output from labour and

minimiselossessuchasthosefromtheftorfraud.Allofthisrequiredtheevolutionofsystems

1 Sidney Pollard, The Genesis of Modern Management (Harmondsworth, 1968), p. 11. 2 Pollard, Genesis of Modern Management, p. 17; John F. Wilson and Andrew Thomson, The Making of Modern Management: British Management in Historical Perspective (Oxford, 2006), pp. 6-7. 3 Wilson and Thomson, Making of Modern Management, p. 6. 4 Ibid.

2

toplanandcoordinateproductionandtomeasureandaccountforcosts,depreciationand

profits.5Thenotionofmanagementimpliesnotjustamasteryoftheseissuesandtechniques

butalsotheemergenceofaclassofindividuals,oftenseparatefromowners,tocarrythose

out.6Theeffectivenessofmanagersandtheefficiencyoftheirmethodsoforganisationand

controlareakeypartofthisstory.Goodmanagementis‘widelyacceptedasthefactorof

productionmostabletoprovideacompetitiveadvantage’.7

SidneyPollard’sanalysisfocusedattentiononfourkeyaspectsofmanagementduring

industrialisation: first, ‘the creation and training of a class of managers; second, ‘the

recruitment,training,discipliningandacculturationoflabour’;third,theuseofaccountancy,

and other available, gathered or created information in the ‘rational determination of

…decisions’ and finally thequestionofwhether entrepreneurs operatedby a ‘theory and

practice of “management”, as distinct frommerelymakingad hoc decisions unrelated to

informationabouttheirbusinesses.8AlthoughPollardwarnedagainstgeneralisationanddid

indeedprovidesomeexamplesofhighlyeffectivemanagement techniques, suchas those

utilised by Bolton and Watt, he concluded that the problems of management during

industrialisationweremany andwhile entrepreneurswere inventive, their energieswere

directedtokeepingupwithinnovationandsocialchange.Managementtechniquesdidnot

leadchangeandnoover-archingmanagerialtheorywasdevelopedduringindustrialisation.9

WilsonandThomsonextendedtheanalysisandarguedthatBritain,soprecociousin

industrial development, remained behindhand when it came to the development of

managerial techniques. Corporate structures developed in impressive ways in the US,

5 Pollard, Genesis of Modern Management, pp. 14-16. 6 Wilson and Thomson, Making of Modern Management, p. 3. 7 Ibid., p. 5. 8 Pollard, Genesis of Modern Management, p. 16. 9 Ibid., pp. 313-315.

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GermanyandJapandrivenbytheirgreaterrelianceonlarge-scaleenterprise.Toolongmired

in the small- or family-firm type of organisation, Britishmanagement systemsmade little

progress.Institutionalandculturalfactorswhichmighthaveprovidednetworksofsupportor

underpinnedahigherstatusformanagerswereweakinBritain.Moreoverthepersonaland

proprietorialcapitalismthatpersistedtendedtoconcentratestrategicdecision-makinginthe

handsofowners.10

Britain,therefore,hasbeenarguedtorepresentacasestudyinthemanagerialfailure

oflarge-scalebusiness.Thispaperdoesnotseektooverturntheoverallfindingsofscholars

like Pollard, Wilson and Thomson but it will establish that failure to consider the

financialisation,aswellastheindustrialisation,ofBritainrestrictsourunderstandingofthe

development ofmanagerial capitalism. To that end itwill first establish that the Bank of

England,by the latterpartof theeighteenth century, encompassed the complexitiesof a

large-scaleindustrialenterpriseandthuswarrantscomparisonwiththetypesofenterprises

identifiedbyPollard.ItwillthenexploretheBank’sorganisationalandmanagementstructure

against the above-mentioned four aspects of management. Because of the wealth of

informationavailableabouttheBankofEnglandandthelongevityoftheinstitution,thepaper

will focusontheearly1780s,aperiodthatarguablysawa rise in industrialactivityanda

momentintimewhentheBankitselfundertookaseriousandextensiveexaminationofits

ownstructures.

TheContext

Despite its early development, longevity and complexity, the eighteenth-century Bank of

Englandhasnotfeaturedinhistoriesofbusinessdevelopment.Indeed,thisperiodhasbeen

10 Wilson and Thomson, Making of Modern Management, p. 3; pp. 255-273.

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characterisedbyChandlerandothersasoneofpersonalcapitalisminwhichownershipand

managementwereintertwinedandanindividualorasmallgroupmadestrategic,functional

andoperationaldecisions.11ThischaracterisationdoesnotsuittheBankofEnglandatany

stageofitshistory.

Equally,theearlydevelopmentofmanagementtechniquesandorganisationhavenot

featured in banking and financial histories. The enforcement of the Bank of England’s

monopolyandthustheprohibitionofjoint-stockbankinguntil1826ensuredthat,untilthat

point, banking operations remained small with simple organisational structures. In

consequence, most historians of banking do not spend much time on the operational

functionsof theeighteenth-century incarnationsof their subjects.12 EvenTeminandVoth

who were more concerned with how banking operated still devoted little space to the

questionofhowtheHoarefamilyranitsbusinessandtheyfailedtowriteofitsorganisation

in terms that stress any type ofmanagement structure.13 John Brewer’s account of fiscal

administration isperhapstheclosestwehavetoadiscussionofwhite-collarmanagement

duringtheeighteenthcenturybutitwasnotwritten,andhasnotbeenread,asanexploration

ofmanagementtechniques.14

Moreover,theBankofEngland’sorganisationandmanagementduringtheeighteenth

century has been largely ignored. John Clapham offered some discussion of the Bank’s

11 John F. Wilson, British Business History, 1720-1994 (Manchester, 1995), p. 13 Chandler made the same arguments with regard to the US. Alfred D. Chandler Jr., The Visible Hand: the managerial revolution in American business (Cambridge Mass. and London, 1977). 12 See for example, Margaret Ackrill and Leslie Hannah, Barclays: The Business of Banking, 1690-1996 (Cambridge, 2008); S. G. Checkland, Scottish banking: A history, 1695–1973 (London, 1975); W. F. Crick and J. E. Wadsworth, A Hundred Years of Joint-Stock Banking (London, 1958); L. S. Pressnell, Country banking in the industrial revolution (Oxford, 1956); R. S. Sayers, Lloyds Bank in the history of English banking (London, 1957). 13 Peter Temin and Hans-Joachim Voth, Prometheus Shackled: Goldsmith Banks and England’s Financial Revolution After 1700 (Oxford, 2013), pp. 136-140. 14 John Brewer, The Sinews of Power: war, money and the English state 1688-1783 (London, 1989). For an older discussion of public administration see J. E. D. Binney, British finance and public administration, 1774-1792 (Oxford, 1958).

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internalstructureanddecision-makingbuttheinstitution’shistoriansgenerallyhaveconfined

themselvestoplacingtheBankinitspoliticalandeconomiccontext,ratherthananalysisof

itsinternalorganisation.15TheonlyonetopaymoreattentiontotheoperationoftheBank

wasW.MarstonAcresbuthisapproachwasrathermoreantiquarianthanscholarly.16This

neglectoftheBank’sorganisationandmanagementisdespitethewealthofsourcesthathave

beenpreservedintheinstitution’sarchiveandfactthataseriesofCommitteesofInspection

wereconstitutedfromthe1780sandproducedreportswhichcangiveussignificantinsight

intothewaytheBankoperated.

ThispaperusesthereportsoftheCommitteeofInspection,establishedin1783,asa

basisforthefollowingdiscussion.TheCommitteewassetupintheaftermathoftheWarof

American Independence amidst accusations of corruption in the public finances and an

attemptbyParliamenttoputitsfinancialhouseinorderthroughaCommissionforExamining

the Public Accounts. The Commission sat between 1780 and 1787, produced fifteen

comprehensivereportsandbegantheprocessofreformofthepublicfinances.17TheBankof

EnglanddidnotfallunderthepurviewoftheCommissionbutdid,inMarch1783,setupits

ownCommittee‘toinspectandenquireintothemodeandexecutionoftheBusinessasnow

carried on in [its] different departments’.18 The Committee of three directors were

empoweredtoinvestigateeveryaspectofbusinessandinspect‘allsuchBooksandPapersas

theymaythinknecessary’.19

15 Notably A. Andreades, A History of the Bank of England (London, 1909); John H. Clapham, The Bank of England: A History (2 Volumes. Cambridge, 1966); John Giuseppi, The Bank of England: A History from its Foundation in 1694 (London, 1966). 16 W. Marston Acres, The Bank of England from within (2 vols., London, 1931). 17 Binney, British Public Finance. 18 Bank of England Archives [hereafter BEA], M5/212, Minutes of the Committee of Inspection, fo. 1. 19 Ibid.

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TheInspectorswereallnotseniormenattheBank,SamuelBosanquethadbeena

director for twelve years and Thomas Dea for eight years. The third Inspector, Benjamin

Winthrop,hadjoinedthedirectorshipjustoneyearbeforetheInspection.20Nonetheless,the

cooperationtheInspectorsreceivedappearstohavebeencompleteandtheirapproachwas

thorough.Theirfinalreportrantoover80,000wordsanditoffersacomprehensiverecordof

thevariousaspectsoftheBank’sbusinessincludingthemanagementofthenationaldebt,

proceduresfordiscountingofbillsofexchange,theprintingandissuanceofnotes,andthe

managementof thecashandcustomeraccounts.TheCommitteeof Inspectionalsomade

recommendationstoimproveefficiencyandsecurity.

ThereportfirmlyestablishesthattheBankwaspreciselythekindofenterprisethat

Pollardwasdiscussing. Indeed,by theendof theeighteenthcentury theBankofEngland

epitomisedmanagerialcapitalism.Itwasajoint-stockcompanywith,whatwasbythattime,

abodyofseveralthousandshareholders.21TheBank’sdualroleasbankertothestateand

manager of the state’s debt must not distract us from its status as a private business

answerable to its shareholders and dependent on remaining profitable.22 The business

operatedunderthedirectorshipofagovernor,deputygovernorand24directorsand,in1783,

itemployed321permanentclerks.Thiswasmorethandoublethewhitecollarstaffofthe

EastIndiaCompany,whichin1785hadastaffof159clericalworkersinLondon,andtentimes

the numbers employed by the large insurance companies: the Royal Exchange and Sun

20 Clapham, Bank of England, p. 205. 21 According to Clapham’s figures there were 2588 shareholders eligible to vote at shareholders’ meetings in 1771 and 2465 in 1791. To be eligible to vote a shareholder had to have £500 or more in stock and to have held that stock for six calendar months. Clapham, Bank of England, p. 285. 22 H.V. Bowen, ‘The Bank of England during the Long Eighteenth Century, 1694-1820’ in R. Roberts and D. Kynaston (eds.), The Bank of England: Money, Power and Influence 1694-1994 (Oxford, 1995), 1-18.

7

Assurance companies.23 Indeed, the late eighteenth-century Bank of England was

undoubtedlythelargestprivateemployerofwhite-collarworkersinBritain,ifnottheworld.

The Bank was organised as two large departments: the Cashiers’ Office and the

Accountants’Officeandeachofthosedepartmentswassub-dividedintomorethanadozen

offices.Withintheseofficeseachclerktendedtooperate inaspecialisedcapacity.Juniors

weresupervisedbyseniorcolleaguesandworkwasheavilycoordinatedwithinandbetween

officestoensureeffectiveworking.Theeffectwastomaketheorganisationofworkatthe

Bankakintothatinalargefactory.

The scale of the work undertaken by the Bank is indicated both by external

comparisonsandinternalmeasures.Notably,asindicatedintable1,theBankwasmanaging

two-thirdsofthestate’sdebtbythemid-eighteenthcentury.Thiswasaseriouscommitment

asitplacedtheBankinapositionoftrustasthemediatorbetweenthestateanditscreditors.

23 H. V. Bowen, The Business of Empire: the East India Company and Imperial Britain, 1756-1833 (Cambridge, 2006), p 139; H. M. Boot, Real incomes of the British middle class, 1760-1850: the experience of clerks at the East India Company. Economic History Review, 52 (1999), p. 639. The EIC employed a total staff of over 1,700 if warehouse labourers and dock workers are included in the count. B. Supple, The Royal Exchange Assurance: a history of British insurance, 1720-1970 (Cambridge, 1970), p. 70.

8

Table1:Agencieshandlingthenationaldebtc.176424

PrincipalSum

%age

handled AnnualPayments

%age

handled

HandledattheBank 77,265,945 69.85 2,682,163 70.72

HandledatSouthSeaHouse 27,125,310 24.52 829,507 21.87

HandledatEastIndiaHouse 4,200,000 3.80 127,687 3.37

HandledattheExchequer 2,022,582 1.83 153,236 4.04

TotalNationalDebt 110,613,836 3,792,594

Source:J.H.Clapham,TheBankofEngland:ahistory(Cambridge,1966),p.103.

Itwasunquestionablyworkforthestatethatcreatedthemostsignificantworkload

for theBank’s clerks. Forexample, the issueof4%annuitiesduring theWarofAmerican

Independenceresultedintheneedtoopen19,500newaccountsinoneday.25Theworkof

compilingalistofunpaiddividendsfortheExchequerwassotime-consumingthatitcould

takeupto5or6months.26Morethan65,000dividendwarrantswereissuedforpaymenton

5 January1783andnearly59,000 inApril1783.27Thesheerscaleof regularbusinessalso

presentedproblems.TheclerkswhokepttheKcashbook,inwhichwererecordednotesin

longlistsfortheExchequer,otherpublicofficesandsomebankers,estimatedthattheymade

uparound20,000notesamonth.28MrIsaacPilleauestimatedthat137,000billsofexchange

hadbeendiscountedinthecourseof1782.Eachdiscountrequiredapostingtotheaccount

24 Amounts rounded to the nearest £1. 25 BEA, M5/213, fos. 43-44. 26 BEA, M5/213, fo. 62. 27 Ibid., fo. 126. 28 BEA, M5/212, fo. 91; fo. 99.

9

withandtheaccountuponatthetimeofdiscountandfromthetwoaccountsatthetimeof

payment.29ThetypeofworkconductedbytheBankandtheneedtoensurethatrecordswere

updatedbytheendofeachdaynecessitatedthecreationofwhatcouldbetermedastwo

shifts within the Bank.Most men worked office hours from 9.00am or a little earlier to

between3.30and5.00pm.Othermencontinuedtheirworkingdaywellintotheeveningto

updatetherecordstoreflecttheday’sbusiness.Thisprocessstartedataround4.00pmand

continuedsometimesbeyond8.00pm.30

Asthislevelofcomplexitysuggests,theBankcouldnotoperatewithoutasignificant

andwell-establishedmanagementstructure.ThediscussionwillnowturntotheCommittee

of Inspection reports and will use them to address Pollard’s four aspects of modern

management: the creationof a classofmanagers; theacculturationof labour; theuseof

informationindecision-making;andtheexistenceofatheoryofmanagement.

Aclassofmanagers

ThemanagementoftheBank’sbusinessbeganwithacourtof24directors,adeputygovernor

andgovernorelectedfromamongstthemostprominentshareholders.Thesemenwerenot

paidemployees,althoughthegovernoranddeputygovernordidreceiveanallowanceof£200

eachperannum,whileeachDirectorreceived£150perannum.31Thedirectorstendedtobe

affluent businessmen, often bankers ormerchants. Somedid a very good job and others

certainlydidnot.SomeattendedtheBank’smeetingsregularlyandothersdidnot.TheBank’s

bye-lawsstipulatedthatnotmorethansixteenofthosewhohadbeendirectorsineachyear

29 BEA, M5/213, fos. 8-9. 30 See for example, BEA, M5/212, fo. 65. 31 Acres, Bank from Within, p. 91.

10

couldstandforre-electioninthefollowingyear.32Inpractice,however,somedirectorsstayed

longinpost,onlytakingshortbreakswhennecessarytoabidebythebye-laws.Clapham’s

analysisnotedseveralwhoservedforoverthirtyyearsincludingduringthelateeighteenth

century,EdwardPayne,adirectorfrom1756toatleast1794;SamuelBeachcroftwhoserved,

albeitwithacoupleofshortbreaks,from1760to1796andRichardNeavewhobeganasa

directorin1763andcontinueduntilwellintothenineteenthcentury.33

AlthoughtheCourtofDirectorsmetweekly,day-to-daymanagementwasdominated

bytheBank’svariousCommittees.TheCommitteeswereappointedtosuperintendbusiness

andmakestrategicdecisions.Somecameandwent–liketheCommitteeforAccounts–which

operatedonlyintheveryearlydaysoftheBank.TheCommitteeinWaitingwasconstantly

constituted to superintend the day-to-day running of the Bank. It was the Committee of

Treasury, however, that was most prominent. It was made up of the governor, deputy

governor and a selection of senior directors. It was regarded by one critic of the Bank,

AldermanWilliamPickett,asa‘darkandconcealedsystemofmanagement’whichsatand

madedecisions‘withoutthedeliberationofthewholeCourt’.34TheMinutesoftheCourtsof

Directorsmightreflectthisaccount.Claphamfoundthatsome‘importantbusiness’wasnot

presented to the Court of Directors and theMinutes of Court offer little sense of active

discussionof thebusiness thatwaspresented to them.35Yet, thiswas thenatureof such

documentsandlackofdetailintherecordisnotuncommon.Equally,thereisnoindication

thatthemajorityofshareholdersweredissatisfiedwiththewaytheBankwasbeingmanaged.

Indeed,WilliamPickett’saiminwritingwastoarousetheshareholderstosomeactionafter

32 Ibid., p. 90. 33 Clapham, Bank of England, p. 199. 34 William Pickett Esq., An apology to the Public for a continued Intrusion on their Notice with an Appeal to the free and independent Proprietors of Bank Stock, demonstrating that it is highly proper for them to examine into the State of their Affairs (London, 1788), p. 36. 35 Clapham, Bank of England, p. 202.

11

a period in which very few participated in the Bank’s democratic processes. Clapham

estimates that, during the early 1780s, only around 100 to 130 of the more than 2,000

shareholders eligible to vote attended meetings. Thus, although the shareholders

theoreticallyhadtherighttoinfluencethemanagementdecisionstakenbytheBank,they

didnotexerciseit,atleastnotwhilethingsweregoingwellanddividendswerebeingpaid

regularly.

Belowthedirectorssattheclerkswhomadethebusinesshappen.Thattherewasa

hierarchyattheeighteenth-centuryBankofEnglandinwhichmenregardedthemselvesin

positions above their colleagues is absolutely clear. The termmanagement is used, albeit

sparingly,intheCommitteeofInspection’sreports,indicatingthattherewasanexpectation

that businesswas being organised and ordered. Indeed, the report speaks of the overall

‘management’oftheinstitutionandrefersseveraltimestothe‘management’ofgovernment

debtundertakenonbehalfofthestate.36Thetermmanagerwasnotusedatallbutthereport

makes numerousmentions of the term supervisor and speaks of the superintendence of

business.Italsomakesnumerousmentionsoftheterms‘superior’and‘chief’,withregardto

chiefmen,andasacommondescriptionfortheheadofanoffice.37

The Bank’s chief men found it straight-forward to articulate the structure and

organisation of their departments. ThuswhenAbrahamNewland, the chief cashier,was

calledbeforetheCommitteeofInspection‘helaidbeforethemaListoftheSeveralOfficers

inhisdepartment’.Thelistread:

No.1.TheInTellerswhoreceive&payMoney.

36 BEA, M5/212, fo. 1; fo.123; fo. 136; M5/213, fo. 173; fo. 179. 37 BEA, M5/212 and M5/213, passim.

12

2. TheOutTellerswhoreceiveMoneyforbillsofexchange&notesofhandat

thehousesofthepersonstowhomtheyareaddress’d.

3. TheClerks in theDrawingOfficewhere theAccounts are kept of those

personswhokeepcashattheBank.

4. TheClerksintheBillOfficewheretheAccountsarekeptofthebills&notes

leftbythosepersonswhokeepcashattheBanktobereceiv’dwhendue

&placedtotheiraccounts.AndtheClearerswhoreceiveoftheOutTellers

themoneycollecteddailybythemforpaymentofbills.

5. TheClerksattheCashBookswheretheBankNotes&BankPostBillsare

madeout&enteredwhenissued&whenpaid.

6. TheClerksintheDiscountOffice

7. TheClerksintheBullionOffice.

8. TheClerkswhoreceivethepublicmoneyonaccotofLoans.

9. TheClerkswhoattendtheReceiptofhisMajesty’sExchequerontheBank’s

Accot.

10. The Care of the Treasure not in the Vaults under the inspection of the

Cashiers.

11. TheClerkswhopaytheInteresttotheProprietorsofBankStock&ofsuch

partofthenationalDebtasistransactedthere.

12. TheClerkswhocheckthesameortheWarrantOffice.

13. TheClerkswhoreceive&paymoneyonaccotoftheSuitorsintheCourtof

Chancery,&

14. TheClerksattheGeneralCashBook.38

38 BEA, M5/212, fos. 3-4.

13

The Chief Accountant, Payne, did likewise for the offices under his control. In amodern

businessthesestructureswouldbeexpressedasorganisationalflowcharts.This‘descriptive,

linguisticsystem’ofanalysis,however,istypicalthroughouttheInspectors’reportandisthe

wayinspectionswereconductedoverthenextcenturyorso.39Consistentwiththatapproach,

the chief men’s overviews were further explored in specific interviews about the way

particularofficesworkedandinteractedwitheachother.Thus:

MrNewlandwascalledin&ask’dinwhatlightheconsider’dtheClearers:Hesaid,thetwoJuniorsareaccountabletoMrPamphiliontheseniorClearer&areboundtofollowhisdirections;theirOfficeisseparatefromtheBillOffice&theyareaccountableonlytohimselfasChiefCashier.MrNewlandinform’dtheCommitteethattheOutTellersarenotimmediatelyundertheSeniorOutTellersoastobeoblig’dtofollowhisdirections;butareaccountabletoMrChurchinthefirstinstance.ThattheInTellersareimmediatelyunderMrCampe,thesenior,&heisexpectedtoattendtotheirgoodbehaviour.40

Themen, therefore, understood that therewas a rigid reporting structure outside of the

directorshipanduseofwordslike‘accountable’and‘obliged’confirmthattheseniormen

were responsible for the organisation and efficiency of their part of the business, were

empowered to issue instructions and expected to be heeded. Equally, the Committee of

Inspectionovertlyacknowledgedthehierarchiesthatexistedbyalwaysturningfirsttothe

seniormenineachoffice.Indoingsotheyvalidatedthemanagerialsystemthathadbeenput

inplace.

Althoughtheevidenceislimited,therecordspreservedintheBank’sarchivescangive

asenseofthetrainingandcareerdevelopmentroutestowardsaseniorpositionintheBank.

39 A. McKinlay and R. G.Wilson, ‘“Small acts of cunning”: bureaucracy, inspection and the career, c. 1890-1914’, Critical Perspectives on Accounting, 17 (2006), p. 658. 40 M5/212, fo. 29.

14

TheBankoperatedaninternallabourmarket.Menwererecruitedonlyatentrylevelandon

aninitial£50salary.Itisnotmadeclearhowlongitwasbeforemenwereconsideredfully

competentbutithasbeenpossibletotracetheamountoftimethemenonthepayroll in

1783waitedfortheir firstsalary increment.Thisshowsthat,onaverage,thefirstpayrise

cameafter3.5yearsofservice,whichperhapsindicatesaminimumperiodofservicebefore

clerkswere considered fully competent in theirwork.41At theEast IndiaCompany, clerks

wereaskedtoworkforthreeyearsbeforereceivingasalary,whichofferssomecorroboration

to the suggestion that this was a minimum requirement.42 As the following charts

demonstrate,salarycertainlyrosewithageandexperience.

Figure1:Salaryofcohortof1783bylengthofexperience

Source:BEA,E41,Staffsalaryledgers,passim.

41 Calculation based on a sample of 287 out of 321 cases. 42 Bowen, Business of Empire, p. 141.

0

20

40

60

80

100

120

140

160

180

200

1-3 yrs 4-10 yrs 11-20 yrs 21-30 yrs 31+ yrs Length of experience in yrs

Sala

ry in

£s

15

Figure2:Salaryofcohortof1783byage

Source:BEA,E41,Staffsalaryledgers,passim.

Salaries also reflected a high status for the chiefmen andmanagers. In 1783 the

highestpaidmenwerethechiefaccountant,JohnPayneandAbrahamNewland,thechief

cashier, both of whom earned £250 per annum. Payne’s deputies earned £170 p.a. and

Newland’sdeputieswerepaid£200ayear.TheaveragesalaryintheAccountants’officewas

£87perannumandtheaverageintheCashiers’officewas£101perannum,adifferential

whichreflectedtheslightlydifferentserviceprofilesoftheclerksinthetwodepartments.The

Bank’stotalclericalwagebillfor1783was£31,085.43

Althoughsomewhatanecdotal,thecareertrajectoryofMrWalshofthe3percent

Consolsoffice, as reported to theCommitteeof Inspection, is instructiveabouthowmen

mighthavelearnedtheirtradeandprogressedintoseniorpositions.HetoldtheCommittee;

Thathehadbeen12yearsintheBank,&forthelast4yearsoneofthe3ChiefClerksof thisOffice,beingappointedAssistanttoMrMiller&MrVickery.That

43 BEA, E41, passim.

0

20

40

60

80

100

120

140

21-25 26-30 31-35 36-40 41-45 46-50 51-55Ages of clerks in yrs

Sala

ry in

£s

16

whenhefirstcameintotheBank,hewasplacedinthedepartmentoftheChiefCashierwherehewentthroughtheOfficesofOutTeller&InTeller,&wassometimeatoneoftheCashbooks&assistedintheBullionOfficeatthetimeoftakingin the deficient Gold Coin; he was afterwards removed into the AccountantsOffice,whichhewentthrough;&fromthencetothe3PCtConsols,wherehehasseeneverypartofthebusinessbeforehewasappointedoneoftheChiefClerks.44

Walsh’s description is in contrast to the experiencesof his counterparts at the East India

Companywhooftenendedtheircareersinthesameofficeinwhichtheybeganandinmany

caseshadnodirectexperienceoftheIndianaffairsthattheymanaged.45

ThereisnowayofascertainingwhetherWalsh’srisetosenioritywastypicalofthe

Bank’sclerksbutwecanarguethathisexpertisewasgainedonthe jobandattheBank’s

expense, rather thanbeingaproductof external trainingor indeededucation.AsPollard

argues,thiswasatimewhen‘formalmanagementtrainingwassorareastobenegligible’.46

Equally,generaleducationprovisionmoregenerallywaspooranddidnotfitmenwell for

clericalwork.47Nonetheless,clearlytechnicalcompetencecouldbelearnedonthejoband

MrWalsh’scareerhistoryseemstodemonstratepreciselythat.

Yet detailed knowledge of working practices and systems is not the same as

managerialskill.Pollard’sanalysisrevealedthatmanyeighteenth-centuryentrepreneurs,like

JamesWatt,had‘excessivedifficultyinfindingintelligentmanagingclerks’.48Thiswouldseem

tosuggestthatfindingmenwhohadtherequisiteskills,andinwhomtrustcouldbereposed,

wasnotstraight-forward.WithregardtotheBank,theInspectors’reportisgenerallysilent

onindividualmen’sabilities.Nonetheless,aseparatenotebookkeptbyoneoftheInspectors,

44 BEA, M5/213, fo. 78. 45 Bowen, Business of Empire, p. 141; p. 143. 46 Pollard, Genesis of Modern Management, p. 147. 47 David Mitch, ‘Education and skill of the British labour force’ in R. Floud and P. Johnson (eds.), The Cambridge Economic History of Modern Britain. Volume I: Industrialisation, 1700-1860 (Cambridge, 2004), pp. 346-47. 48 Quoted in Pollard, Genesis of Modern Management, p. 160.

17

SamuelBosanquet,cangivesomerevealinginsights.BosanquetwroteofMrWalshas‘very

intelligent,veryable,andtheonlyonefitforaheadyetseen’.MrWaltonofthe3perCent

ReducedOfficewaspronouncedtobea ‘verycleverhand,verysensibleandcapable’.Mr

Priaulxwasjudgedtobe‘allway[sic]readytoact,&verycapable’.However,therewasnot

universal praise for the senior men. Mr Bridges, principal of the dividend warrants was

condemnedas‘achatteringfellow,notfittobeplacedinanymoreconspicuouslight’.Mr

Wildewasnotedashavingabilitybutapparentlyhe‘drinks&then[gets]muddled&lost’.49

Abilityandfitnesstolead,therefore,werenotskillsautomaticallytobefoundeveninmen

whohadrisentothemoreseniorranks.

Theacculturationoflabour

Pollardregardedtherecruitmentand‘rationalandmethodicalmanagementoflabour’asa

central problem facing entrepreneurs during industrialisation.50 He cited contemporary

argumentsthattheworkforceavailabletoentrepreneurswastemperamentallyunsuitedto

longhoursspentinmonotonouswork.Workerswereregardedas‘transient,marginaland

deviant’.51Thompsontoowroteofcontemporaries’attemptstoinculcateanewformoftime-

discipline into workers.52 Both Thompson and Pollard argued that factory owners were

battlingtoenforceawrenchfromapastinwhichlabourinthedomesticworkshopallowed

theworkermore freedomandautonomy.Yet, in spiteof the importanceattached to the

acculturation of labour, Pollard investigations suggested that factory owners made no

scientificbreakthroughhere.Problemsweremetandresolvedthroughimprovisation.Some,

49 BEA, M5/471, Memorandum book of Samuel Bosanquet, 1783-1791. 50 Pollard, Genesis of Modern Management, pp. 189-90. 51 Quoted in ibid., p. 190. 52 E. P. Thompson, ‘Time, Work-Discipline and Industrial Capitalism’, Past and Present, 38 (1967), pp. 56-97.

18

like Robert Owen were supportive of their workers. Others relied on more draconian

methods,withcorporalpunishment,especiallyofchildworkers,finesorevendismissalbeing

metedoutasameansofmaintainingdiscipline.53

TheBankwasundoubtedlyamorepleasantworkingenvironmentthanthefactory,it

attractedworkersofahighersocialstatusandofferedbetterlong-termprospects,including

apensionforthosewhowereunabletoworkthoughill-healthorwhosoughttoretireinlater

life.Morerecentstudiesofworkingtimealsodemonstratethatmanywerealreadyworking

longdayspriortotheriseofthefactorysystem.Voth’sstudyoftimeandworkinLondon

suggestsanaverageworkingdaythatstartedbetween6.00and7.00amandcontinueduntil

aroundsevenintheevening.54Wemaybeconfident,therefore,thattheBankofEnglandwas

drawingonapoolofworkers,atleastsomeofwhomwereattunedtolongworkingdaysand

wereincentivisedtoatleastdotheminimumrequiredtokeeptheirpositions.

Yet,therewerealsounpleasantaspectstolabourattheBank.Sittingcrampedover

ledgersdid indeedtakeatollongeneralhealthandeyesight.55There issomeevidenceto

suggestthatconditionscouldbeunpleasantinsomeoffices.ItwasreportedtotheInspectors

that‘theLibraryissocold&dampforthegreatestpartoftheyear,thattheClerksareafraid

of continuing there the necessary time for doing the business required’.56 On another

occasionitwasnotedthattheTransferOffices‘nothavinganychimniesorotherapertures

for theadmissionof freshAir,are sounwholesomeasgreatlyprejudice thehealthof the

53 Sidney Pollard, ‘Factory Discipline in the Industrial Revolution’, Economic History Review, 16 (1963), pp. 254-271. 54 Hans-Joachim Voth, ‘Time and Work in Eighteenth-Century England’, Journal of Economic History, 58 (1998), p. 33. 55 Rosenhaft notes the impact on occupational health of clerical work. Eve Rosenhaft, ‘Hands and Minds: Clerical work in the first “information society”’, International Instituut voor Sociale Geschiedenis, 48 (2003), p. 39. 56 BEA, M5/213, fo. 164.

19

Personsemployedinthem’.57Occupationalhealthmightalsohavebeenaffectedbystress.

Theworkwasintensiveanderrorscouldhaveseriousfinancialconsequences.

Nonetheless,findingmenpreparedtorisktheunpleasantfeaturesofworkattheBank

inordertogainthepotentialrewardswasnotdifficult.Thedirectorsmighthavefilledeach

vacancyseveraltimesover.However,findingmenwhowereabletoperformtheworkwas

moreproblematicandthus,bytheendof theeighteenthcenturytheBankhadadvanced

procedures for recruitment. Its policies ensured that all new employees had been

recommendedbyoneofthedirectorsoftheBank.Whilethispersonalintroductiondidnot

guarantee fitness for a position, the Bank followed up by testing new entrants prior to

acceptance.Eachapplicantwassubjectedtotestsoftheirabilitytowritewell,toaddcolumns

offigureandtobeabletodealwithmoney.58Somecandidatesdidwellbut,wheresystematic

examinationispossible,thereisrevealedacleargapbetweentheskillspossessedbythemen

applyingforjobsattheBankandtheskillsrequiredbytheinstitution.59

TheBankaddressedtheskillsgapbythroughtraininganddevelopment,aswehave

seen,butprincipallythroughspecialisationoffunctions.MostmenworkingattheBankat

juniorlevelsspenttheirdaysengagedinmundaneandrepetitivework.Theydidthesame

task over and over again throughout the day and, we can assume, repetition brought

competence.Arguablywhatcanbeobservedhereisactuallyaprocessof‘deskilling’ofwhat

wetypicallymightthinkofasskilledwork.Breakingsuchworkdownintoitscomponentparts

simplifieditandmadeiteasiertotrainindividualstodoitwell.Asimilarprocessapparently

57 Ibid., fo. 22. 58 For a full account of the recruitment process see Anne L. Murphy, ‘Writes a fair hand and appears to be well qualified’: recruiting Bank of England clerks at the start of the nineteenth century’, Financial History Review, 22 (2015), pp. 19-44. 59 Ibid.

20

occurredinindustrialproductionwhere,it issuggested,dividingprocessesintospecialised

stepsmeantconsiderablylessinvestmentinskillacquisition.60

SpecialisationwasnotasolutionforalltheBank’spotentiallabour-relatedissues.It

was,ofcourse,particularlyvulnerabletoerrorsandfraud.Onewayofcombattingthoserisks

wastocreateacultureofloyaltyamongclerks.Attheirelection,orinitialemployment,each

clerkwasrequiredtoswearanoathoffidelityandtocommittokeepingtheBank’sbusiness

private.Technicallyclerkswerere-electedeachyearand,therefore,renewedtheiroathseach

yearaswell.61TheBankdidnotjustrelyonitsclerks’senseofloyalty.Eachclerkwasalso

expected to provide the Bank with personal security backed by an independent bond

guarantor.Thesebondsstartedat£500forjuniorclerksandrosetoamaximumof£5,000,

dependingonresponsibility.TheBankwasdiligentbothinmaintainingup-to-daterecordsfor

guarantorsandpursuingcompensationintheeventofsignificantlossesresultingfromerrors

ordishonesty.62ForlessseriousoffencesoroccasionswhentheBankincurredfinanciallosses

through negligence, clerks could find their wages stopped in order to compensate the

institution.

With regard to day-to-day work discipline, a particular problem in the factory was

ensuring the regularityofworkandattendance.Pollard citeshigh turnoverof labourand

frequenttardinessandabsence.63Likealllarge-scaleworkshopsandearlyfactories,theBank

keptanappearancebooktorecordtheclerks’arrivaltimes.MatthiasAlcock,theprincipal

door-keeperandthemanchargedwithkeepingthatbook,toldtheInspectorsthathedrew

‘alineeverydayabout10minutesafter9,tomarkthenamesofthosewhodonotcometo

60 Mitch, ‘Education and skill’, p. 347. 61 Acres, Bank from Within, p. 132. 62 Ibid., p. 133. 63 Pollard, Genesis of Modern Management, p. 213.

21

their time’.64 Tardinesswas not ignored and the Inspectors reinforced the expectation of

punctuality.Intheirinterviewswitheachseniorman,theyaskedforanaccountoftheirstaff

whichincludeddetailsoftheirtime-keeping.ThusMrClifford,headoftheDrawingOffice,

informedtheCommitteethathismenwere‘veryregular&wellqualifiedfortheirbusiness,

which was very necessary, for matters of immense consequence passed through their

hands’.65 Indeed,allheadsexceptforMrVickerypraisedthemenundertheirsupervision.

Vickery, on the other hand, when interviewed by the Committee said, ‘that a custom

prevailedamongtheClerksofgoingoutfrequentlyduringthedaywithoutmakingapplication

tohimforleave:&thatsomedogiveintheirnamesashavinghadleavetill10inthemorning,

withouthisknowledge’.66Vickerywasknowntohavepoorworking relationshipswith the

menunderhimyethisaccountofpettyabsenteeismwasprobablymoreaccuratethanhis

colleagues’ accounts of absolute compliance. Although the 1783 Committee did not find

muchtocomplainof,laterCommitteesdidfindregulartardinessandabsenceamongsome

men.67Thereis,however,noindicationthattheBankcouldnotfunctionorwasmaterially

affectedbecauseofnonattendance.

AlthoughtheBankofEnglandhad‘sticks’withwhichtoenforcecompliancetoitsrules,

thereislittleevidencethattheywereusedexceptinthemostseriousofcases.Onlythirteen

dismissalscanbetracedamongthoseemployedin1783,justover4%ofthetotalnumberof

employees.68Moreover,whilePollardemphasisedtheimpositionofstrictdisciplineinfactory

work, more recently scholars have focused on communication and negotiation between

64 BEA, M5/213, fo. 165. 65 BEA, M5/212, fo. 85. 66 BEA, M5/213, fo. 64. 67 Acres, Bank from Within, pp. 356-57. 68 BEA, E41, passim.

22

employees and employers.69 There is evidence of this in the Committee of Inspection’s

reportsaswell.Inparticular,whenclerksintheAccountants’Office,whowereemployedin

postingbillsofexchange,usedtheoccasionoftheInspectiontopetitionforanincreasein

pay.TheircasewastakenupbytheInspectorswhoagreedthattheywereindeedpaid‘very

inadequatelytotheadditionaltrouble&labourbestowedbythemindoingthisBusiness’and

‘recommended to the Governor & Committee of Treasury to take their case into

consideration’.70 The acculturation of labour, therefore, was a complex process in which

punishmentor threatofpunishment coexistedwith the supportof, andnegotiationwith,

workers.

Useofgatheredinformationinrationaldecision-making

In his discussion of rational decision-making, Pollard focused on accounting. Accounting,

basedprimarilyondouble-entrybook-keeping,waswell-established ineighteenth-century

Britainandusedbyindividualsatallsocialstrata.Theplebeianfarmingfamily,theLathams,

forexample,keptanaccountbookthroughoutthemid-eighteenthcentury.71FortheBankof

Englandaccountingwasakeytechnology.72Theinstitutionhadbeenusinghighlycomplex

bookkeepingsystemssinceitsinceptionin1694.IncludingtheGeneralLedgerandStockand

AnnuityLedgers,theBankmaintainedawidevarietyofcashbooks,accountledgers,ledgers

relatingtotheissuanceofbanknotes,listsoflostnotes,detailsofdiscountedbills,bullion

69 Kate Smith, Material Goods, Moving Hands: perceiving production in England, 1700-1830 (Manchester, 2014), pp. 86-87. 70 BEA, M5/213, fo. 48. 71 Alice Dolan, ‘The Fabric of Life: Time and Textiles in an Eighteenth-Century Plebeian Home’, Home Cultures: The Journal of Architecture, Design and Domestic Space, 11 (2014), pp. 353-374. 72 For a discussion of bookkeeping as a key technology, especially in European state-formation, see Pepijn Brandon, ‘Accounting for Power: Bookkeeping and the Rationalization of Dutch Naval Administration’ in Jeff Fynn-Paul ed. War, Entrepreneurs and the State in Europe and the Mediterranean 1300-1800 (Leiden, 2014), p. 151.

23

ledgers and a variety of different registers covering all aspects of its business.73 There is

evidence that the books, and abstracts taken from them, were checked by the various

CommitteesandtheCourtofDirectorsandusedindecision-making.Thuswithregardtobills

itwasnotedthatthey‘mustpasstheCommitteeinwaiting,withtheassistanceofanyother

Directorsthatchusetoattend,&arenotcarriedtothecreditofthediscounteruntiltheyhave

pass’dtheCourtonthefollowingday’.Abstractsthenpreparedwere‘laidbeforetheCourt

on Thursday, togetherwith anothermadeout alphabetically expressing the sums that go

off’.74Likewisesystemsofaccountswereusedaschecksandbalances.Thustheaccountsof

theCourtofChancery,whichweremanagedbytheBank,required‘ageneralbalancebeing

takeneveryyearinthemonthofOctober,whentheAccountisprickedover,&agreedwith

theChanceryAccount:afterwhichitissignedbytheHeadofthisOffice,&thencertifiedby

theChiefAccountantoftheBank,whenitissenttotheAccountantGeneraloftheCourtof

Chancery,whodeliversittotheLordChancellor’.75

The very existence of these systems say something of the Bank’s precocity as an

eighteenth-century business. The level and complexity of itswork could not bemanaged

withoutrobustaccountingsystems.Thisisespeciallyclearinthemanagementofthenational

debtand itsetstheBankapartcertainly fromsomedepartmentsof thestatewhichwere

sometimeschaotic.76Yet,Pollard’sunderlyingquestionwaswhetherinformationgathering

and analysis was used in the control and development of the business. Arguably the

establishmentofasystemofInspectionattheBankprovidesinsightintothisissuethatmoves

73 For a short digest of the surviving ledgers see Clapham, Bank of England, I, p. 303. 74 BEA M5/212, fo. 53. 75 BEA, M5/213, fo. 115. 76 Brandon, ‘Accounting for Power’, p. 152.

24

beyond accounting systems. Indeed, the Committee’s reports give us several excellent

examplesoftheuseofinformationinrationaldecision-making.

TheInspectorswerenotjustengagedinaninspectionofprocess,theywereinterested

informulatingimprovements.Inonecase,theydedicatedmuchtimetofinding‘safe’systems

forthestorageofnotesandbills.Indeed,theyexplainedintheirfirstreportthat‘Toforma

planthatmayputsoverylargeapropertyinaStateofSecurity;withoutatthesametime

impedingtheestablishedcourseofbusiness;hasengagedmuchofourattention’.77Theissue

wassimple.Notesandbillshadtobetohandthroughoutthedayandthustheywereremoved

fromthesafeseachmorningandthenlay

exposed through thewhole course of the day, not only to every Clerk in thatOffice…butalsotomanyotherswhotransactbusinessneartheplace;&eventoPersons unconnectedwith the Bank, whose occasions frequently require theirbeingadmittedintotheBillOffice.78

Ultimatelyasolutionwasfoundtotheproblembutitistheprocessofidentifyingtheproblem

thatisofmostinterest.ItcametolightthroughtheInspectionandwashighlighted,asthe

Inspectors’reportdemonstratesbytheevidenceof‘MrChurch,MrMayorandMrBourne,

the3Chief,&ofMrHolland,oneofthesubordinateClerksintheBillOffice’.79

In addition to their attempts to improve security, the Inspectors committed time to

exploring themost efficient means of doing the work. In this they worked on the same

principles of gathering information but they also consulted the clerks about possible

solutions.Thus,aplantorevisesystemsofissuingbanknoteswasdiscussedwithMrNewland,

thechiefcashier,andputbeforeseveraloftheseniormenbeforebeingimplemented.Mr

Gethingcommentedthat ‘hedidnotatpresentseeanyobjectionto itsbeingadopted,&

77 BEA. M5/213, fo. 72. 78 BEA, M5/212, fos. 70-71. 79 Ibid., fo. 70.

25

thoughtunderproperalterationsitwasveryfeasible’.80MrGardner,ontheotherhand,was

recordedtohaveofferedobjectionstotheplansbutaccordingtotheInspectors’account‘did

not state anyonewhich seemedwell founded: his objections arisingprincipally from the

apprehensionofhavingsoconsiderableaChargecommittedtohiscare’.81

ThemostsignificantsetofchangesimplementedbytheInspectors,however,wasinthe

TransferOfficeswhere,itwasargued,customerswerebeinginconveniencedbybeingkept

waitingforlongperiodsoftime.Thisapparentlyhadbeenthecauseofmanycomplaints.82

ReorganisingthetimingsofthevarioustasksintheTransferOfficeswastheproposedsolution

tothisproblemandherethesolutionscamefromtheclerksthemselves.Thus,MrReeves,

whencalledbeforetheInspectorssuggestedthatthe

timeforputtinginTransfersmightberestrainedto½past12o’clock…noobjectionswouldberaisedtoitbythePrincipalBrokers:foritwouldfacilitatetheirattendanceattheEastIndiahouse&SouthSeahouse,wherethetimeofTransferisfrom12‘till1o’clock,whichatpresentinterferesverymuchwiththeirbusinessatthishouse.83

ThisdemonstratesbothReeves’ familiaritywiththe internalworkingsoftheBankandthe

widerrhythmsoftheCitybutalsotheInspectors’willingnesstorelyontheexpertisethey

foundamongtheBank’sclerks.

The flows of information and expertise between sites and individuals is being

emphasisedinmorerecentscholarship.84Inthisrespect,perhapstheBank’sdirectorswere

doing little different to other employers in listening to their workers and acting on their

analyses of problems. Nonetheless, Pollard’s assessment of the use of accountancy and

gatheredinformationinbusinesswas‘largelynegative’.Hisviewwasthatbusinessowners

80 Ibid., fo. 111. 81 Ibid., fo. 112. 82 BEA, M5/213, fo. 68. 83 BEA, M5/212, fo. 55. 84 See for example Margaret C. Jacob, Scientific Culture and the Making of the Industrial West (Oxford, 1997), Smith, Material Goods, Moving Hands.

26

encountered technical difficulties in compilingdata and themonopolistic advantages that

manyentrepreneursenjoyedduringthelateeighteenthcenturymeantthatfewhadtotake

precise account of their costs or to consider ways of cutting those costs or improving

efficiency.85 The Bank, on the other hand and although also enjoying a significant

monopolistic advantage, was nonetheless concerned with improving the efficiency of its

businessandinordertodothat,itwas,fromthepointofthefirstInspectionsin1783and

after,gathering,andactingupon,evidence.

ATheoryofManagement

Thediscussionsofarhasestablishedthat,attheeighteenth-centuryBankofEngland,there

existedaclassofsupervisorsandmanagers,thattherewereattemptstoacculturatelabour

andthatinformationwascollected,analysed,consulteduponandacteduponinattemptsto

improvetheinstitution’sefficiencyandsecurity.Toarguethatthereisevidenceofatheory

ofmanagement,however,requiresustoestablishthattheBank’sdirectorsandseniormen

were doingmore thanwhatWilson and Thomson describe as ‘the traditional or rule-of-

thumb’approachtomanagement,definedasconsideringissuesastheyaroseanddevising

solutionsbasedonpastexperience.86Amore systematicapproach tomanagement,again

usingWilsonandThomson’susefuldefinitions,requiresdirectionandcontrolfromabove,the

definitionofmanagement jobs,dealingwithproblemsinasystematicfashionandseeking

solutions in the ‘experience and thinking of others’ and in encouraging an exchange of

information.87

85 Pollard, Genesis of Modern Management, p. 245. 86 Wilson and Thomson, Modern Management, p. 31. 87 Ibid.

27

Whiletheforegoingdiscussionhasdemonstratedthattherewasdirectionoftheday-

to-day business of the Bank and that solutions to problems that arose were sought in

knowledgeexchange,itmightbearguedthattheoveralldevelopmentofbusinesswasnot

strategic.Expansionandcontractionusuallyoccurredinresponsetothedemandsofastate

atwar.TheBank’sbusiness,itsstaffandthespaceitoccupiedallexpandedattimeswhen

the burdens of state debt increased. Since that was usually at the onset of war, it was

impossibletoplanforsucheventualities.Yet,iftheBankdidnotundergoplanned,strategic

expansionintoalargerscaleofbusinessandmoreintimateconnectionstothestate,thereis

stillevidencethattheInspectors,atleast,hadaverystrongsenseofawiderpurposetotheir

business.Intheirfinalreporttheyasserted‘areligiousVenerationforthegloriousfabrick[of

theBank,and]asteadyandunremittingattentiontoitssacredPreservation’.88Itwastheir

viewthatgiven

theimmenseimportanceoftheBankofEnglandnotonlytotheCityofLondon,inpointshighlyessentialtothepromotion&extensionofitsCommerce,buttotheNation at large, as the grand Palladium of Public Credit, we cannot but bethoroughlypersuadedthatanObjectsogreatinitself&sointerestingtoallRanksoftheCommunity,mustnecessarilyexcitecare&solicitudeineverybreast,forthewiseadministrationofitsAffairs,butprincipallyanddirectlyintheirswhoareentrustedwiththeimmediatemanagementofthem.89

Theactofreflectionthatwastheyear-longinspectionalsoledtotheidentificationof

morefundamentalissuesrelatingtothemanagementoftheBankwhichindicatedadesireto

givemoredefinitiontomanagerial jobsandtobemoresystematic inthemanagementof

staff.TheInspectors’recommendationsincluded,‘abetterdefinedsystemofsubordination’

among the clerks with the intention of creating ‘a chain of obedience, from the Juniors

88 BEA, M5/213, fo. 179. 89 Ibid., fos. 178-79.

28

towardstheHeadsoftheirrespectiveOffices’.90EssentiallytheInspectorsweredemanding

thattheBank’smanagersshouldbecomemoremanagerialandthemorejuniormenshould

paymoreattentiontothedirectionsoftheirsuperiors.Thisissueprincipallyarosebecause

theInspectionuncoveredthepracticeofthemostseniormenleavingtheBankeverydayat

around 3.00pm and thus leaving some of the most important aspects of the business,

includingsecuringtherecordsandthebuildingsovernight,inthehandsofthemorejunior

men. The Inspectors defined this as ‘extraordinary’.91 And they asserted, ‘Timemay have

sanctified the custom, [but] the reverse of itwould have appeared amuchmore natural

regulation:forsurelyifinanysituationofTrustacompleatsuperintendenceisdesireable,it

mustbemoreimmediatelynecessarywheretheTrustisofsuchinfiniteimportance’.92

In addition to requiring greater managerial diligence from the senior men, the

Inspectors reflecteduponhowsuchmen rose toprominenceand recommended that the

directorsonappointingcommittees‘paygreatattentiontotheabilities&charactersofthose

theynominate;&atthetimeofElection,totheirperformances:forthoughamongstsogreat

anumberitcannotbeexpectedthatallshallbeequallycapable,yetcareshouldbetakennot

to elect such as are apparently liable to exception’.93 Promotions also required greater

considerationaccordingtotheInspectors.Whilethesystemthatpertainedatthetimeofthe

Inspectionensuredthatpromotionwaschieflygovernedbyseniorityandthatwasregarded

as‘fair&equitable’,theInspectorsnotedthatit‘willnotapplyinallcases,noroughtittobe

resortedtowhereparticularTalentsarerequired’.94

90 Ibid., fo. 173. 91 Ibid. 92 Ibid., fo. 174. 93 Ibid., fos. 174-75. 94 Ibid, fo. 175.

29

ThusitisclearthatalthoughtheInspectorsmaynothavebeenformulatingatheory

ofmanagementintheirfinalreport,muchthoughthadbeengiventothefactorsthatwould

contributetotheeffectiverunningoftheinstitution.Theconclusionsreachedencompassed

anacknowledgementthatthepeopleinmanagerialrolesmattered.Thosemenwhoroseto

highofficehadtobeselectedonmeritnotjustseniority,theyhadtohaveauthorityandthey

hadtobepreparedtodemonstrateauthority.

Conclusion

The system of inspection at the Bank of England once implemented was not halted.

Permanentcommitteeswereestablishedformonitoringthemostimportantofitsfunctions.

From the start of the nineteenth century, a closer eyewas kept on the recruitment and

management of staff and the implementation of what was by this time a set of written

regulations governing each office. The result of thiswas tighter internal controls and the

maintenanceof theefficiency forwhich theBankwasalready justly feted. Ifwe seek the

genesisofmodernmanagement,therefore,theBanksurelyoffersaplacetostart.

Yet, one issue does remain and that is the question of broader impact. Good

managerialpracticemayhavebeguntodevelopattheBankbutthereisnoevidenceatall

that thosepracticesweredisseminatedoradoptedoutside the institution. It is, however,

possibletoarguethattheinstitution’sefficiencyandeffectivenesswereobservedandnoted

bytheinvestingpublichencemakingacontributiontothedevelopmentoftrustintheBritish

publicfinances.ThispointhasbeenacknowledgedintheworkofscholarslikeBrewerand

Daunton,whohavefocusedonthewaysinwhichefficientsystemsoftaxationunderpinned

30

theworkings of the national debt.95 It is time that scholars turned their attention in this

respect to the British state’s systems of borrowing. Taxation was essential certainly but

borrowingprovidedtheimmediatefundsneededinemergentsituationslikewar.Taxation

couldbeenforced,lendingwasvoluntary.TounderstandthesuccessoftheBritishstate,itis

necessarytounderstandmuchmorefullyhowitborrowed.Givingattentiontotheprocesses

bywhichitmanagedthatborrowingisanimportant,andhithertoneglected,partofthestory.

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