Edward’s update at foot before related articles
I chanced to come across a Reuters report from the time when the Bank of England was nationalised. I hope it is of interest. So many wild theories are being put forward at present
Edward
OWNERSHIP OF THE BANK OF ENGLAND
Edward Spalton 18 October 2011
The shares of the Bank of England are held by a nominee company. In the present, justifiable outrage about the mismanagement of the financial sector, all sorts of theories are flying around – principally that the bank is really owned by the Rothschilds or whoever is the sinister pet hate figure of the theorist.
By complete coincidence, I have a copy of the Straits Times (Singapore) of Monday October 15th 1945 which carries this Reuters’ report. I think it is pretty clear and that the ownership situation has not altered since. Gordon Brown, of course, gave the bank conditional “independence” to set interest rates, thus absolving himself and future Chancellors from the need to answer for interest policy at the despatch box in the Commons. But I don’t think anything else has changed with regard to ownership. He also destroyed the bank’s effective regulatory role which prevented any British or colonial clearing bank from failing in 180 years and replaced it with his complicated “tripartite” system with results which we all know.
Here is the report in full.
“GOVT. TO BUY BANK OF ENGLAND STOCK
LONDON, Oct 13 – The British Government will buy up the Bank of England capital in its nationalisation scheme, writes Sydney Campbell, Reuter’s City Editor.
The bill to take public control of the bank, published today, states that the existing stock will be transferred to a nominee of the British Treasury and the King will appoint a governor, deputy governor and directors.
The Treasury will direct the bank but the bank will be managed by its directors and will issue directives to other British banks. The present proprietors of the Bank of England will be bought out in exchange for 3 per cent long dated Government stock which will give the holder the same income he is receiving from the Bank of England’s stock, namely 12 per cent.
The British Government will pay £450 long term Government stock for each £100 Bank of England stock. The amount of the capital stock of the Bank of England now is £14,583,000. This first act of socialisation by Britain’s Labour Government fulfilled the best expectations in the City of London – Reuter.”
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is this the complete file Edward? it’s all that opened up in Word. Malcolm
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Yes Malcolm, It is complete. It was just the ownership question I was dealing with. If I had been in full flow I would have gone on – especially about how the “independence” of the bank was to make it fit the EU banking system as part of the preparations for joining the euro. The Labour government’s slogan then was “Prepare and decide” i.e. behave as if it were a foregone conclusion. Fortunately Gordon Brown got cold feet and we do probably owe the continuance of sterling to him. But I didn’t want to go “banging on” (as Mr Cameron once put it)! Regards Edward
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Malc,
Here is the reply I sent to Edward, in case you want to add it.
Cheers,
Mike.
–
Hi Edward,
What you say is absolutely right. However, I would point out a number of things, and maybe you could send this around for comment.
1. The Bank is owned by the nation – the shares are held by the Treasury Solicitor. However, the Bank is operationally completely independent from government, with no oversight or accountability outside of the notional requirement to keep inflation below 2%. In the event inflation exceeds 2% the only sanction the government has at present is to require a letter from the Governor explaining why he’s such a naughty boy.
2. The Bank presently has the capability to print Pounds Sterling upon receiving an instruction from the Treasury. In practice, however, only 3% of currency in circulation is issued in this way. Currency issued this way is interest free.
The other 97% of currency in circulation is issued as debt by commercial banks, with interest attached.
So the Bank, rather than operating in the national interest as is implied by the name, in fact acts as a broker between the government and private bankers who lend the nation its own national currency at interest. It does this by issuing gilt edged bonds.
3. The Bank has permitted the amount of currency in circulation to increase by 400% in the last 30 years. Over that same time period, GDP has grown about 60%. So, in reality, the British economy has collapsed utterly in that period as a result of Bank policy.
4. Contrary to what we might think, the “Bank of England” has many customers other than the government. It wholly owns a subsidiary company, Bank of England Nominees Limited. This is a nominee company – it does not trade, but holds financial “assets” on behalf of Bank customers. The Queen’s financial assets are held by BOEN, but so are assets of other heads of state, private bankers and other governments.
The point of a nominee company is to hide transactions. Say, for example, the Queen wants to sell her stockholding in M&S. When that trade is done, the perceived owner is BOEN, and not the Queen, and trading activity is hidden.
At present, the nation has no way of knowing who the Bank’s customers are, what services it provides to them, or what holdings they have. This is just one of the Bank’s many FOI exemptions. So the Bank, which we might think has loyalty to the nation, may well have more loyalty to a foreign power, or a Rothschild. We can’t know.
5. The Bank’s employees are not government employees. Yes, the nation is the only shareholder, but every Bank employee is a Bank employee, not a civil servant. There is no oath of office. Their loyalty is to the Bank and the City of London, not Britain. This is why the Bank encourages Chancellors to sell the nation’s gold reserves at the bottom of the market. This is why the Bank will not consider any solution to the financial crisis other than bailout after bailout.
So, you are right, the Bank is not owned by the Rothschilds. But the Court of Directors is 100% private banking interests, with 0% national representation or interest on there.
The Solution to our economic woes:
1. We need full Glass Steagall style banking separation now, today. Not this ring fencing nonsense pushed by Merv and Georgie boy.
The analogy Dave Barnby suggested to me, which I think is perfect, is to compare the financial system to a ship; naval architects invented watertight compartments in order to stop the ship sinking when holed.
Full separation of retail and investment banking is equivalent to the watertight compartments and is the only way to guarantee the ship won’t sink. The ring fence idea is not watertight – there’s a gap at the top, just like the unsinkable Titanic.
2. If we were to separate the retail and investment banks in this way, the next step should be to look at the legitimacy of the “national” debt outstanding. I think we would find ourselves in the position that we could class 95% of the debt as gambling debt which we do not honour, and as a result of step 1, we could do that quite safely without risk to the economy or the retail banking sector. The investment banking sector would be permitted to sort out its own problems at this point. This is their biggest fear.
3. Then we look at how money is created, and (re)claim that process as a sovereign act. Then perhaps, with the correct consideration about how that was done, we would find we have no shortage of money to rebuild the nation.
4. Since as a result of step 2 we are now free of all the interest payments to City of London parasites, we can use our new sovereign capability to create interest free money to rebuild the nation beginning with the real economic infrastructure we need to support a healthy economy – power, water, transport, plus health and education. This new credit would be issued in the form of loans to companies in the private sector, at a very low interest, and simple interest at that. This credit would only be used for productive activities which become the driver for the wider real economy.
5. There will still be some pain for us – the small matter of a £2 trillion hole in the public sector pension pot, and a similarly sized hole in the pension pot that we are all entitled to tap into. This money was stolen by the Blair/Brown governments. We also need to protect private pensions, currently invested in the global casino and losing money hand over fist, and savings.
6. Somewhere in there we need to shut down this parasite called the “Bank of England” which is nothing whatever to do with England or Britain. We need a national bank, not a central bank. A national bank operates in the national interest, with full oversight and accountability, not in the interest of private banking interests, Rothschild or not.
I think this is the solution. However, as I said to Dave B. in reply to his shipping analogy, as a “plan B”, I’d be willing to consider just putting the City of London into a watertight compartment and filling it with water.
One thing is for sure, continued bailout can only end one way. If we don’t act, and soon, to sort this out, the bankers have a “plan B” for us:
http://www.ukcolumn.org/blogs/polish-finance-minister-war-ten-years-if-euro-rescue-fails
Kind regards,
Mike.
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Malcolm, As the result of information received from someone who has had a RECENT official reply from the Treasury on the subject of ownership of the Bank’s shares, I have made one small alteration and one addition at the end to this article. It doesn’t alter the gist of it but it is important to be correct.
Regards
Edward
OWNERSHIP OF THE BANK OF ENGLAND
Edward Spalton 18 October 2011
The shares of the Bank of England are said to be held by a nominee company. In the present, justifiable outrage about the mismanagement of the financial sector, all sorts of theories are flying around – principally that the bank is really owned by the Rothschilds or whoever is the sinister pet hate figure of the theorist.
By complete coincidence, I have a copy of the Straits Times (Singapore) of Monday October 15th 1945 which carries this Reuters’ report. I think it is pretty clear and that the ownership situation has not altered since. Gordon Brown, of course, gave the bank conditional “independence” to set interest rates, thus absolving himself and future Chancellors from the need to answer for interest policy at the despatch box in the Commons. But I don’t think anything else has changed with regard to ownership. He also destroyed the bank’s effective regulatory role which prevented any British or colonial clearing bank from failing in 150 years and replaced it with his complicated “tripartite” system with results which we all know.
Here is the report in full.
“GOVT. TO BUY BANK OF ENGLAND STOCK
LONDON, Oct 13 – The British Government will buy up the Bank of England capital in its nationalisation scheme, writes Sydney Campbell, Reuter’s City Editor.
The bill to take public control of the bank, published today, states that the existing stock will be transferred to a nominee of the British Treasury and the King will appoint a governor, deputy governor and directors.
The Treasury will direct the bank but the bank will be managed by its directors and will issue directives to other British banks. The present proprietors of the Bank of England will be bought out in exchange for 3 per cent long dated Government stock which will give the holder the same income he is receiving from the Bank of England’s stock, namely 12 per cent.
The British Government will pay £450 long term Government stock for each £100 Bank of England stock. The amount of the capital stock of the Bank of England now is £14,583,000. This first act of socialisation by Britain’s Labour Government fulfilled the best expectations in the City of London – Reuter.”
Recent information from a correspondent who made enquiries of the Treasury, establishes that the present nominee is the Treasury Solicitor.
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