as the ablest of English
financiers. In spite of such considerations however it is doubtful
whether William would have thrown himself into the hands of a purely
Whig Ministry but for the attitude which the Tories took towards the
war. Exhausted as France was the war still languished and the allies
still failed to win a single victory. Meanwhile English trade was all
but ruined by the French privateers and the nation stood aghast at the
growth of taxation. The Tories, always cold in their support of the
Grand Alliance, now became eager for peace. The Whigs on the other hand
remained resolute in their support of the war.

[Sidenote: Bank of England.]

William, in whose mind the contest with France was the first object, was
thus driven slowly to follow Sunderland's advice. Already in 1694 indeed
Montague established his political position and weakened that of the
Tory Ministers by his success in a great financial measure which at once
relieved the pressure of taxation and added strength to the new
monarchy. The war could be kept up only by loans: and loans were still
raised in England by personal appeal to a few London goldsmiths in whose
hands men placed money for investment. But the bankruptcies which
followed the closing of the Exchequer by the Cabal had shaken public
confidence in the goldsmiths, while the dread of a restoration of James
made these capitalists appear shy of the Ministers' appeals for aid.
Money therefore could only be raised in scanty quantities and at a heavy
loss. In this emergency Montague came forward with a plan which had been
previously suggested by a Scotchman, William Paterson, for the creation
of a National Bank such as already existed in Holland and in Genoa.
While serving as an ordinary bank for the supply of capital to
commercial enterprises the Bank of England, as the new institution was
called, was in reality an instrument for procuring loans from the
people at large by the formal pledge of the State to repay the money
advanced on the demand of the lender. For this purpose a loan of
L1,200,000 was thrown open to public subscription; and the subscribers
to it were formed into a chartered company in whose hands the
negotiation of all after loans was placed. The plan turned out a perfect
success. In ten days the list of subscribers was full. A new source of
power revealed itself in this discovery of the resources afforded by the
national credit and the national wealth; and the rapid growth