In 1693 a gentleman by the name of William Paterson was invited to a private audience with King William III of England. Here is a long-lost transcript of the meeting. After some polite preliminaries about the effect of cannons and gunpowder on the climate Mister Paterson broached the subject on both their minds...sovereigns.

“Look,” said he, “You need money. You’ve no chance of getting any from Parliament. But I have several rich Dutch contacts and they have expressed an interest in helping out. Don’t worry. We’ll sort out the details and tell you what to say. Here’s how the scam…whoops what a giveaway…how the scheme works. It’s up and running in the Netherlands as we speak. And we hear everyone’s pleased with the way it’s working out. So have a chat with the Dutch and get back to us. Same time and same place two weeks from now? Good. This could be the start of a beautiful friendship.”

The King didn’t have to think for long. He knew about the transformation of the Dutch king’s fortune. Soon he would find out what was behind it. And so it was that six weeks later - on his own initiative of course - the King invited the leader of the merry band of brothers that were to form the Bank of England Joint Stock Company to bring two or three of his trusted business colleagues to a specially convened meeting of the Privy Council four weeks hence.

Four weeks later with the meeting duly convened the King opened the proceedings. “Now look here, young fellows. We’ve brought you here to discuss a proposal that will be good for this great country of ours. We appeal to you as patriots. Do not dismiss it out of hand. But take it away with you and think carefully upon it. These are difficult and dangerous times. Your country needs you. The crux of the matter is that Progress requires this country to have a Central Bank. The Netherlands has got one. So we must have one. What will our position be if France and Spain get one and we are left in the lurch? But it must have the support of the Merchant Community. Your task is to gather this support. Do this and I will ask you to run the bank for the benefit of your fellow countrymen. What d’you say?”

“We are intrigued, Your Majesty. Pray tell us the nature of the charter you propose. How will the bank sustain its legal monopoly over the issue of notes of credit? Everybody writes notes. And what are the precise conditions you are proposing for our Royal Charter?”

“Well, my loyal subjects,” the King continued in his most pompous manner, “I have given this matter some thought and have consulted widely in Europe. This is the idea. You supply me with the money I want. And in return I’ll give you a royal monopoly. Only your notes will be legal tender within my realm. How much you print is your business. The only condition is that you print the same amount of money for me. That way we’ll both be happy. Got to stick together, after all? Agitators. Deists and Atheists. Mobs. Eh what?”

“Well, you could blow me down with a feather,” replied the leader of the merry band of brothers. “What a truly brilliant idea. How noble, intelligent and wise are the ways of kings. How truly fortunate we simple businessmen are to have a King with so astute a mind and one so versed in the ways of finance. For peace of mind we will back our notes with gold. But don’t worry. You won’t have to pay for the gold. We will issue some of our legal tender and buy the gold with that. Best to get it for nothing.”

“Yes, yes. Very pretty,” replied the King. “I’ll give that to my Minister without Portfolio Lord Alistair of Campbell to put in the newspapers. I’m a big picture man. I’ll leave you young lads to sort out the details. Good. That’s agreed then. Meeting adjourned.”

After the meeting was over, the King took the leader of the merry band aside. “Went well, don’t you think? Just one question. When do I get my money? Wife’s spending money like there’s no tomorrow. And I’m starting to get discrete enquiries from her shopkeepers. So undignified. Still if they know just a quarter of what I know about my financial situation I can hardly blame them.”

“Here are a few guineas to be getting on with. Mustn’t rush this. Must be seen to haggle. We’ll go around looking uneasy. Slip the word out to those agitators in Parliament that this outrageous proposal will bring us bankers to our knees. Tell the old die-hards in the house that this is our only chance. Some Emperor - any emperor - will be in the City of London ravishing the Flower of English Maidenhood in forty-five minutes unless we sign up. And so on and so forth. Must be statesmanlike about these things.”

“Few details to attend to. Some of your privy counsellors are being difficult. Plenty of side deals needed with Lord Here and the Marquis of Somewhere Else over the next few weeks. And there’s the scoundrel Harvey and his pyramid selling. Land Banks indeed! Must be exposed. Agent for the Vatican they say. All takes time. Companies to register. Shareholders to appoint. No rest for the wicked. Let me know if you need any directorships for your people.”

“Well, thank you. I’ll do that. But we have other ways. Let me have the names of those Privy Counsellors...refer to them in future as teepees...code for Turbulent Priests...then I’ll have my wife have a discrete word with their wives. Normally does the trick. The parliamentary session after next, you say. Nine months, eh? Best you can do? Well if that’s what it takes. Now down to the small print. The price of hats in London beggars belief…” to be continued