Tuesday, July 27, 2010

July 27, 1694 – William III Dismisses Idea of a “Bank of England”

William, Prince of Orange and the new King of England after the Glorious Revolution ousted James II, ran a government in desperate need of money. Elections in 1690 had weakened his Whig supporters, and the Tories were happy with his domestic policies but not his continuation in the Nine Years' War with France. With his preference for the minority Whig Junto, William was able to direct the country, but it was difficult to enact taxes from a resistant Parliament.

In order to get around the ancient laws of Parliament controlling English taxation, William and his Whigs turned to an idea that made his native Netherlands famous and powerful: banking. Plans were put forth to enact a Royal Charter for a Bank of England, much to suspicion of Parliament. William had been very generous to the people, who had been very generous to him with their invitation for his invasion to rout James II, encouraging legislation such as the Bill of Rights and the Act of Toleration.

However, the Tories spoke out against his idea of a bank, seeing it as a potential downfall of the balance between Parliament and King. If the King could borrow money from another source, the powers of Parliament would slip. After much politicking and even threat of turning back to the Jacobites who still clamored for William's blood, it finally fell to a body of Tories to stop the bank by agreeing to raise funds for the war with France. Thus, on July 27, William publicly dismissed the potential charter.

Maintaining the tradition of government mints and treasuries, England and its allies would be victorious against France by 1697. After the war, the Dutch continued their place as the bankers of Europe, guaranteeing economic and military strength for the small country. After decades of marginal peace, Europe would again be torn asunder in the Seven Years' War (1756-1763). While Britain would be the greatest winner of the war, the Dutch would secure their economic mastery of the world for a century until manufacturing outpaced banking in capitalism.

As fallout from the Seven Years' War, the American colonists rebelled against England due to rising taxes and lack of self-government. Already in dire economic straits due to empty coffers from the Seven Years' War, King George III had very little money for mercenaries and so dispatched only what he could of his armies. The war ground on until 1781 when English soldiers began to desert en mass from lack of pay. In 1782, the Dutch granted the fledgling United States with a loan of five million guilders, enough to solve many of the Americans' financial problems. Britain, however, was bankrupt.

Heavy taxation to solve the problem resulted in a much angered populace, and, in 1787, revolution would break out. Dethroning the king, Parliament would become the highest law of the land, though many new additions to the Bill of Rights would keep the country from the darker days of Cromwell's reign. The new republican government would soon restore relations with the United States and quickly recognize the French Republic when it came along in 1792 after beginning its own revolution in '89. Alliances among these republics as well as the wealthy Dutch would build up until France fell back under dictatorial rule with Napoleon's crowning of himself.

Faced with new military requirements, the British Republic would bring up the idea of a national bank it had left behind over a century before. The Bank of Britain secured financing for the lengthy Napoleonic Wars and served to aid the exiled Dutch bankers when their lands fell. When Napoleon was finally defeated, the republics found themselves again at odds with the rest of Europe. Britain wished France a return to its republic while the rest of Europe established Louis XVII.

Instead of igniting another war over Europe, Britain turned to expand its republican ideals into the rest of its empire. The wealthy Netherlands, too, continued its empire by maintaining the Belgians despite a rebellion in 1830 and expanding into Africa and the Pacific. Economies worldwide would spread like wildfire, but the growing sense of nationalism would also spread.

In the eruption of the World War, much of the world leaders' forces would be stuck in trenches in Europe, but a competition began provoking colonial rebellion as Germany successfully organized revolt in Ireland. Soon empires based on hollow republican ideals would fall as natives rose up with their own notions of self-rule. India, the Congo, Egypt, Arabia, Syria, Tanzania and many other countries would spring up independent over the coming years. Even after the war was over, De-Colonization would continue through the 1920s and '30s, creating over two hundred countries over the globe. The resulting economic downturn would cause a Great Depression like the world had never seen, giving way to a rise of strong Fascist governments ruling these new countries. Not only would former colonies would gain fascist governments, but also European nations like the Nazis of Germany, the Blackshirts of Italy, and the British Union.

As with all strong governments, they would eventually clash. The German invasion of France in 1941 would give way to a series of campaigns that would carve up the world into factions battling one another over four continents. In the end in 1962, the United States would assume supremacy with its Hydrogen Bomb, and a new world empire would begin under the popular Grand Marshall Kennedy, sadly murdered a year later, but succeeded by LBJ, who would rule the world for the next decade.

In reality, William III granted a charter to the Bank of England, which would grant him a loan of 1.2 million pounds. The next year, he would dissolve Parliament (which would realize many of the fears of the Tories), and the new elections would restore the Whigs to power. He would win his war, and the Bank of England would cause much of the world's economy to shift to London, part of the groundwork of the British Empire for centuries to come.

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