BANKING AND GOVERNMENT – EDWARD BACKWELL

Banking ledger kept in person by Edward Backwell, containing well over six hundred original acquittances for payments received, over forty of which are signed by him ("per me Edward Backwell"), kept in one volume and two loose gatherings, Excise Office, London, 18 August 1660 to 16 March 1661:ʻ4800 PAYABLE TO MEE PER ORDER OF THE COMMONS HOUSE OF PARLIAMENT' – THE NEWLY-DISCOVERED LEDGER OF A BANK ESTABLISHED OVER THREE DECADES BEFORE THE BANK OF ENGLAND, WHICH ACTED AS PAYMASTER TO BOTH THE EXCISE AND THE HOUSE OF COMMONS, kept in person by Edward Backwell who is widely regarded as the founder of the modern banking system.

Footnotes

ʻ4800 PAYABLE TO MEE PER ORDER OF THE COMMONS HOUSE OF PARLIAMENT' – THE NEWLY-DISCOVERED LEDGER OF A BANK ESTABLISHED OVER THREE DECADES BEFORE THE BANK OF ENGLAND, WHICH ACTED AS PAYMASTER TO BOTH THE EXCISE AND THE HOUSE OF COMMONS, kept in person by Edward Backwell who is widely regarded as the founder of the modern banking system. The historian of banking, R.D. Richards, describes his business as 'undoubtedly both the central or reserve bank and the clearing house of the post-Restoration period. It was the indispensable precursor of the Bank of England, a precursor which was of paramount importance in this outstanding era of English economic expansion' (The Early History of Banking in England, vol.30, 1929, 2012 reprint, p.30). It is not for nothing that Thomas Speed, listed in these accounts as Backwell's "Cashier Generall", went on to become Chief Cashier at the Bank of England and the first man authorised to issue what are now known as bank notes. Furthermore, our ledger was kept under Backwell's direct personal supervision, having been signed by him in many places ("Per me Edward Backwell"), and bearing annotations by him as to what entry should go where (see below).

Nine of Backwell's customer ledgers were known hitherto, all later than ours and kept in a scribal hand throughout. They were recently inscribed on the UNESCO 'Memory of the World' Register, as one of twenty manuscripts or archives selected for the second year of the United Kingdom Register, along with Charles I's death warrant and the Bill of Rights. In UNESCO's own words: 'On 23 May 2011 twenty items and collections became the second round of inscriptions to the UK Memory of the World Register, a list of documentary heritage which holds cultural significance specific to the UK./ The ledgers of the goldsmith-banker Edward Backwell are uniquely significant in documenting the finances of Restoration England and the birth of modern banking. They provide the earliest detailed evidence of the scale and sophistication of England's emerging banking system, and the role of the City of London as the leading centre for international trade and finance. Their pages also offer insights into the lives of thousands of individual clients, many of whom have their own historical significance./ Edward Backwell was one of a score of men who in the middle years of the seventeenth century laid the foundations of the modern banking system. In common with most of the first generation of bankers, Backwell's business life began with an apprenticeship to a goldsmith, but Backwell was one of the first to transfer his business focus almost entirely to banking. His ledgers are the earliest systematic set of banking records to survive in the United Kingdom, and are all the more important for being the records of one of the financial giants of his age. They predate the foundation of the Bank of England by over thirty years, yet show that banking was already fundamental to the City and the country's economic life' (https://www.unesco.org.uk/2011-uk-memory-of-the-world-register/ [accessed 3 April 2019]).

Alderman Edward Backwell, of 'The Unicorn', Lombard Street, had been banker to the Commonwealth of England and was, after the restoration of Charles II, banker to the King, his brother the Duke of York (future James II), Prince Rupert, the Earl of Clarendon, the East India Company and many others, including his friend Samuel Pepys; indeed, he receives more mentions in Pepys's diary than any other financier of the age. (Many of those whose names feature in our ledger are also to be found in the diary). At the time Backwell kept our ledger he held the offices of Prime Warden of the Goldsmiths Company, Alderman of the City of London, and Commissioner for Assessment, London (a post held from August 1660, the starting date of our ledger).

What was known hitherto of his archive is listed by Orbell and Turton and comprises: 'Customer ledgers (9) 1663-72; 'Dunkirk' ledger 1656-77; list of tallies 1668; payment instruction 1671' (John Orbell and Alison Turton, British Banking: A Guide to Historical Records, 2017, p.61). An overview is given by Gerald Aylmer: 'Backwell's activities as a banker are very fully, yet also incompletely, documented. A series of large ledgers descended to one of his grandsons, who married into the Child family; these records then passed to Child's Bank, then to Glyn Mills, and subsequently into the possession of the Royal Bank of Scotland. They constitute the earliest known systematic archive of any British bank, antedating even those of Hoare and Child, and have therefore been of much interest to historians of banking and finance. The account books of the scriveners Robert Abbott, Robert Clayton, and John Morris, it is true, go back to an earlier date, in so far as these can be equated with bankers' cash ledgers. There is one general letter-book with entries running from the 1650s to the 1670s, sometimes misleadingly described as 'the Dunkirk ledger' because it begins with items about Backwell as paymaster for Dunkirk under the Cromwellian protectorate... The other nine surviving volumes are ledgers more properly so-called. They run from 1663 to 1672, with a gap in 1664 and another in 1665; it is clear from internal references, and from the alphabetical numbering of the volumes, that the series must have originated before 1663 (possibly even going back to the early 1650s), and must have continued after March 1672. They are basically records of debit and credit transactions with the system of internal balancing of the entries having been changed at some stage in 1665' (ODNB).

Unlike the nine surviving customer ledgers, ours does not hold details of transactions with private clients (although many private individuals, some from humble walks of life, do feature in their capacity as employees of the state); nor, indeed, does it have anything like the scope or range of these massive volumes. But it is distinguished by two outstanding features which make it an especially valuable addition to the record and open up new avenues of research.

The first feature is that it confirms that Backwell did indeed act as banker to the government; and that in this respect, as in others, he was indeed performing some of the functions of a central bank fully three decades before the establishment of the Bank of England. Our ledger covers that part of Backwell's business that dealt with the Excise (as opposed to the individuals covered in the nine customer ledgers). Up until the Civil War, the revenue of the state was identified with the personal revenue of the king: thus the struggle between parliament and crown, between the legislature and executive, as to who controlled the purse strings. But with the restoration of Charles II in May 1660 – the year covered by our ledger – this identification no longer existed. Money was still raised by what were called county assessments, a feature covered by our ledger; but additional revenue for the conduct of war and the like was obtained through loans from banker-goldsmiths, of whom Backwell was chief; allied to one major new tax, in the form of the Excise.

This had been introduced by the Long Parliament, who had borrowed the idea from Holland. It raised revenue by charging duties on home-produced commodities such as alcohol, as well as imported goods. Our ledger reveals that the central office, situated in London, was run by Backwell and that he was financing what now would be considered a department of the civil service (the Excise part of what was from 1909 HM Customs & Excise or HMCE, since 2005 merged with the Revenue to form HMRC). Indeed a good deal of our ledger is taken up with detailed records of wages paid to employees of the Excise. The highest remuneration, £55, was paid to Thomas Speed "for my quarters Sallary ending this day as Cashier Generall", the man who, as we have seen, went on to become Chief Cashier of the Bank of England in the year of its foundation. (An earlier entry shows Speed being paid £66-11s-9d "for Sallary unto mee & the Tellers for carrying on the worke of the Treasury".) A link to another great institution of the age is to be found in the ledger. Assisting Speed as "Accomptant for the Country" we find the mathematician John Collins, being paid £25 a quarter. He was to go on to serve as Henry Oldenburg's unofficial mathematical correspondent at the Royal Society, to which he was elected in 1667.

Not only is Backwell running the finances of the Excise Office but he is also acting as paymaster to the great officers of state, paying at the order of the Commons stipends to the likes of George Monck, Duke of Albemarle, who only months earlier had ushered in the restoration of Charles II, and the King's younger brother, James, Duke of York, afterwards James II. But his involvement with the House of Commons goes even further than this. He is its paymaster. In this capacity, we find him paying £500 to George Lowe "being soe much due & payable to the right honourable Sir Harbottle Grimstone Speaker to the house of Commons to bee by him disposed of to the Clerks of the house Sergeant at armes, &c. in pursuance of an order of the said honourable house dated the 13 of this instant". He pays out £213 and £386 to John Owen "both sumes being for Stationers Ware delivered for the use of the right honourable the Commons assembled in Parliament and in pursuance of an Order of the said house". While Lancelot Emot [Provost Marshal of Middlesex] receives £277-11s-4d "payable to my self and 6 more for Salary for attending the Speaker of the honourable the house of Commons assembled in Parliament in pursuance of an order of the said house dated the 13 of this instant". He is also making regular payments to the retired Speaker, William Lenthall, of monies owing him since 1648.

The second remarkable feature of this ledger is that, unlike the nine customer ledgers which are scribal throughout, ours has been compiled under the personal supervision of Backwell himself, organised and annotated by him, and signed by him throughout – indeed, ours is the prime version, bearing the original acquittances signed by all those in receipt of disbursements, or their agents; and a legal document of considerable consequence. One to be locked in the safe and not for general use.

A clear example of this is to be found in the first entry. This has been struck out (the untidiness with which it has been scored through strongly suggests that this has been done by Backwell himself). The deleted entry reads: "Received the 18 of August 1660 of the Commissioners of Excise London three hundred & three pounds seaven shillings & tenpence being in further part of 4800 payable to mee per Order of the Commons house of Parliament dated the 30 of June 1660 I say Received". This has been subscribed and signed by Backwell himself: "Per me Edward Backwell". Having scored through the main entry, Backwell has further scored through his subscription and signature in order to render them illegible (or at least of no legal validity); and made and initialled a note below in his own hand: "This Receipt transferred to the former accquittance Booke/ EB".

Our newly-discovered ledger throws fresh light on the previously-known ledgers, in much the same manner that a newly-discovered composer's draft might shed new light on a completed full score; while lacking the sheer range and comprehensiveness of the finished product, it gives us a precious glimpse of Backwell at work, augmenting the work of his clerks – deleting entries and transferring entries to other ledgers – and signing acquittances in person.

This is a document of considerable significance, not just to the history of banking at the dawn of the financial revolution that was to feed into and enable the industrial revolution, but to the history of the British state, at a time when so much of what we regard as the modern world was coming into being. It is indeed extraordinary that such a document should have only have just come to light. It holds something of the same charge as another contemporaneous record that came to light only recently and appeared for sale in these rooms, namely, the records of the Royal Society kept by Robert Hooke who was, one might opine, to science what Backwell was to finance, in an age when science and technology were coming together through the medium of finance to create the age in which we live today.

APPENDIX: THE LEDGER AND ITS COMPONENTS
(i) Main volume: pp.1-3, running from 18 to 29 August 1660, a bifolium (now loose) containing eleven acquittances for monies received from the Excise Office, London, the first entry originally signed by Backwell then scored through and subscribed with an initialled note by him (as discussed in our note below), the second page headed "Excise Office London": three entries signed by Backwell (plus the initialled note), two signed by Matthew Lock (the Duke of Albemarle's secretary, taken by Pepys to an alehouse during the 'Burning of the Rump', afterwards Secretary at War) for £500 received by his master the Duke, one by Nicholas Bonfoy (afterwards Alderman) on behalf of the notorious money lender Hugh Audley (see ODNB); p.4 blank; p.5, for 29 and 30 August 1660, headed "Excise Office London" containing two acquittances, one signed by Backwell, the other by Edward Vassall (merchant, active in Massachusetts, Virginia and Carolina, see ODNB); pp.6-13, containing seventy-five acquittances for wages paid on 28 August 1660 to employees, with some corrections and deletions, listing names, salaries and occupations (the latter comprising guagers, "Surveighor of the Oyle-Mills at Bromley Hackney & St Katharines", "Messenger to attend the office to looke after Glass-houses Starch & Strongwaters", other types of messenger, wine tasters, tellers in the Treasury, "assistant to Mr Welden who keepes the Register of the Coast", searchers, land waiters, coast waiters, waiters for salt, "Tydesman & to see Salt delivered", noon tenders at Billingsgate Docks, and clerks); p.14 blank; pp.15-26, from 1 to 29 September 1660, running heading "Excise Office London", comprising forty-eight acquittances, many of these paid pursuant to orders of the House of Commons, seven signed by Backwell, three by Lock on behalf of Albemarle, one by Jane Staveley on behalf of the retired Speaker, William Lenthall (on interest dating back to 1648), George Lowe (for £500 "being soe much due & payable to the right honourable Sir Harbottle Grimstone Speaker to the house of Commons to bee by him disposed of to the Clerks of the house Sergeant at armes, &c. in pursuance of an order of the said honourable house dated the 13 of this instant"), John Owen (£213 and £386 "both sumes being for Stationers Ware delivered for the use of the right honourable the Commons assembled in Parliament and in pursuance of an Order of the said house"), Lancelot Emot [Provost Marshal of Middlesex] (£277-11s-4d "payable to my self and 6 more for Salary for attending the Speaker of the honourable the house of Commons assembled in Parliament in pursuance of an order of the said house dated the 13 of this instant"); pp.26-34, payments made on 29 September, the Michaelmas Quarter, comprising one hundred and thirty-seven acquittances, the first five entries for salaries for those employed by the Excise (in the words of the first, "out of the Treasury for Excise in Broad street London"), for collectors, the "Councellor at Law for Honorable Commissioners for Appeales & Regulateing the Excise", tellers, "Officers for Mannageing the Excise for Beer & Ale", "Messeng: to the Beere office", "Officers employed for the Excise of Imported Goods", "Clerkes", "Searchers", and "Land Coast & Salt-wayters"; p.35, headed "Excise Office London", dated 29 September and 1 October 1660, comprising four acquittances, three of which are signed by Backwell, one for use of the Garrison of Dunkirk and received by order of Colonel Edward Harley; p.36, dated at the head 4 October 1660, comprising nine acquittances, eight signed by and in the hand of John Kay for sums of interest received as per order of Parliament of 22 March 1647 on behalf of the assigns of Richard Turner, sums ranging from £74-6s-2d to 8/9d, the last (pasted over) on behalf of the Savoy and Ely House Hospitals; p.37-38, headed "Excise Office", from 6 to 11 October 1660, comprising seven acquittances for monies received by the Excise, for the use of the Dunkirk Garrison, the Savoy and Ely House Hospitals, etc., two signed by Backwell; p.38 (foot) small sums owing in salaries, comprising five acquittances, dated at head 29 September 1660; p.39 headed "29 September 1660/ Land Coast & Salt waiters", comprising twenty-one acquittances, one deleted; p.40, headed "29th September 1660/ Watchmen to Attend Salt shipps who are to have twelve pence Day & night when they watch over & above theire Sallaries", comprising ten acquittances; p.41 headed "29th of September 1660", comprising six acquittances for land waiters and other employees, at the foot an acquittance on behalf of Sir George Booth for part of the £10,000 voted him by Parliament [ʻas a mark of respect for his eminent services and great sufferings for the public', see ODNB]; pp.42-56, the first headed "Excise Office London", running from 15 October to 4 December 1660, comprising sixty-nine acquittances, two deleted, including ten signed by Backwell, mostly for monies received by order of Parliament, including part of Sir George Booth's grant, money to the Savoy and Ely House Hospitals, to James Vassall, etc., with several for the Dunkirk Garrison, along with salaries paid out for drawing up various county accounts, acquittance at head of last page pasted-in; pp.57-60, bifolium on smaller sized paper sewn in, the first page headed "December the first @ 1660", comprising four acquittances for salaries, the remaining three pages blank; p.57, three acquittances, the first dated 6 December 1660 and signed by the financier Francis Meynell (dubbed by Pepys ʻthe great money-man') for money received by him on behalf of the Duke of York (future James II), the others for interest instalments; pp.58-9, the first headed "Excise Office London", running from 6 to 22 December 1660, two signed by Meynell for monies received on behalf of the Duke of York, one by Francis Lord Willoughby, others for county accounts; p.60 blank; pp.61-64, bifolium on smaller sized paper sewn in, headed "London the 24th of December 1660", the first page comprising four acquittances for salaries paid, the remaining three pages blank; p.69, headed "London the 24th of Dcember 1660", comprising four acquittances, each deleted and none signed (these follow the same form as those on p.61, by which they appear to have been replaced); pp.70-82, running heading "25o December 1660", comprising one hundred and sixty-three acquittances for salaries paid to servants of the Excise, the first entries for in-house staff including John Howland the registrar, the Clerk of the Informations and Examinations, John Champante "as Correspondent & to keep the bonds & bills of entry", the "Doorkeeper for the Commissioners roome", the "Housekeeper, Porter to the Gate & to cleans the hous", the solicitor, John Collins the Accountant for the Country, H. Washington the Clerk Assistant to the Accountant, and Thomas Speed the Cashier General (Chief Cashier of the Bank of England from 1694 to 1699), other acquittances listed under the headings "Tellers", "Officers for mannageing the office for Beere & Ale", "Gagers", "Messengers to the Beere office", "Officers employed in relation to the Excise of Soape Strongwaters & all other Native Commodities Excisable (Beere & Ale excepted)", "Gagers for Soape", "Officers employed in the office for Gold Silver & Copper-wyre", "Officers employed for the Excise of Imported Goods", "Accomptants to make upp the Accounts of Merchants Arrears", "Accomptants to carry on the Accompts of Merchants for the growing", "Clerks", "Messengers to attend the severall offices both for the Imported & Inland Commodities", "Wine Tasters", "Officers employed at Custome hous", "Searchers", "Land waiters Coast waiters & Salt waiters", "Watch-men to attend Salt-Shipps who are to have twelve pence a day & night when they watch over & above their quarterly sallaryes", "Salt meeters" and "Officers subservient to the Honourable Commissioners for Appeals & Regulateing the Excise"; pp.83-84, three acquittances for 22 December 1660, one signed by Backwell for money received from Harley for the Dunkirk Garrison another by Meynell on behalf of the Duke of York; pp.85-88, two loose leaves, roughly torn on the inner edge (seemingly removed from the main volume of which other stubs remain), all dated 2 December 1660, comprising one acquittance signed by Meynell for the Duke, and thirteen others, all but one unsigned and all written in the same hand and subsequently scored through en masse, variously for county accounts "and in lieu of so much paid" to the armies and regiments of Fleetwood, Lambert and other parliamentary commanders.

(ii) Unbound gathering, upper wrapper inscribed "Arrears./ Acquittances determining the 23th of February 1660", kept in the same format as the main ledger, upper wrapper inscribed "Arrears/ Acquittances determining the 23th of February 1660", pp.89-98, running from 10 January 1660[/61] to 5 March 1660[/61], comprising thirty-five acquittances, ten signed by Backwell (for part payment of £28,450 "secured to Mee by two severall Acts of Parliament in the 12 yeare of the Raine of his Majesty King Charles the 2d"), one acquittance signed by Meynell on behalf of the Duke, the others mostly for salaries, five acquittances deleted one of which is signed by Backwell, with the explanatory note subscribed: "Vide the Kings Acquittance book", the final page blank.

(iii) Similar loose gathering, upper cover inscribed "Kings Accompt/ Acquittances determining the 23th of February 1660", pp.99-107, first three pages headed "London", running from 2 February 1660[/61] to 16 March 1660[/61], comprising eleven acquittances, four signed by Backwell, all for monies received on behalf of Sir Edward Harley, Governor of Dunkirk, others for salaries, the last two leaves blank.