eabh Papers | No. 16-02 | August 2016 The Bank of England...
Transcript of eabh Papers | No. 16-02 | August 2016 The Bank of England...
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:[email protected].
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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.
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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.
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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.
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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¬esofhandat
thehousesofthepersonstowhomtheyareaddress’d.
3. TheClerks in theDrawingOfficewhere theAccounts are kept of those
personswhokeepcashattheBank.
4. TheClerksintheBillOfficewheretheAccountsarekeptofthebills¬es
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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