The Hidden Origins of the Bank of England
Chapter II is the origin story Goodson cares about most. Not Rome. London. He wants you to see the Bank of England, 1694, as the moment a king sold the right to create money and never got it back.
Book: A History of Central Banking and the Enslavement of Mankind by Stephen Mitford Goodson (ISBN-13 978-1-910881-49-1). Black House Publishing Ltd. 1st ed. 2014; 2nd and 3rd 2017. Goodson was a former non-executive director of the South African Reserve Bank.
Offa, sterling, and a usury ban
He starts with King Offa of Mercia. Gold is scarce, so Offa builds England’s first money system on silver. One pound of silver equals 240 pennies. The pennies are stamped with a star, Old English stearra, and that is where Goodson says “sterling” comes from. In 787 Offa bans usury. Alfred (865 to 899) adds forfeiture of a usurer’s property. Edward the Confessor in 1050 adds outlawry and lifelong banishment.
1066 to 1290
Then the frame flips. Goodson says Jews first arrive in 1066 with William I. He admits the record does not show they “promoted” the invasion. He still says they “at the very least financed it,” and got the right to charge interest under royal protection.
The rates he gives are brutal: 33 percent a year on nobles’ land, 300 percent on workmen’s tools and chattels. Within two generations, he says, a quarter of English land is in Jewish lenders’ hands. Aaron of Lincoln dies in 1186 richer than King Henry II.
King John, in this telling, buys distressed noble debts and seizes the land. The barons revolt. Magna Carta, 15 June 1215, has 61 clauses, but Goodson says its “principal purpose” was to cancel Jewish bonds. (He adds that his ancestor Roger Bertram, Lord of Mitford, was one of the barons at Runnymede.) Henry III walks many of those clauses back. Edward I, after Statutes of Jewry in 1233 and 1275 abolish usury, expels 16,511 Jews on 18 July 1290.
I am going to keep this as his story. The 1290 expulsion is real. Aaron of Lincoln was really very rich. Magna Carta does have clauses 10 and 11 about debts to Jews. Calling those the main point of the charter is his emphasis, not the usual reading.
Tally sticks and “glorious” Middle Ages
With the lenders gone, he says, England enters a golden stretch. Tally sticks (he dates them to “Henry II (1100-35),” which is actually Henry I’s reign) stay in use until 1783. Taxes are “tolerable.” The average labourer works 14 weeks a year. Spare time goes into cathedrals. York Minster is finished in 1472 with the largest run of stained glass in the world.
He quotes Houston Stewart Chamberlain on the 13th-century farmer as freer than the modern one, and G. M. Trevelyan on those “towering forests of masonry.” Henry VIII loosens the usury laws. Edward VI slams them shut again in 1552: usury is “by word of God, utterly prohibited.”
Tally sticks are cooler than people think. Split wood as a receipt both sides had to match. The 14-week work year and jeweler-free Merrie England are a sermon, not a wage series.
Goldsmiths, Cromwell, and a pair of letters
The “golden era” ends in the 1600s. After the 1492 Spanish expulsion, he says, Marranos settle in London under Elizabeth I and work as goldsmiths. They take gold on deposit and issue receipts for ten times the metal they hold. That, for Goodson, is proto fractional-reserve banking. First they lend to the Crown at 8 percent. Samuel Pepys, he says, saw rates of 20 and even 30 percent.
Then the Civil War. Goodson says “Jewish conspirators” exploit the split between Charles I and the Puritans. Fernandez Carvajal, “the Great Jew,” supposedly organizes a 10,000-strong London militia and provisions Cromwell’s New Model Army. Amsterdam lenders, led by Manasseh Ben Israel, bankroll the Roundheads and petition for readmission. About 190,000 people die.
Here he reprints two 1647 letters between “O.C.” (Oliver Cromwell) and Ebenezer Pratt of the “Synagogue of Mulheim.” Cromwell offers to push Jewish admission if Charles is removed, and floats assassination. Pratt writes back: let Charles escape, recapture him, then try him. The money comes after the trial starts. Charles is seized at Holmby House, allowed to run, recaptured, and put through Pride’s Purge. No English lawyer will draft the charge. A Dutch Jew, Isaac Dorislaus, does it.
Present that as a story Goodson reprints. Many historians treat the Cromwell-Pratt letters as forgeries.
Cromwell’s 1655 Whitehall conference still votes no. In October 1656, Goodson says, the first Jews land “surreptitiously” anyway. Charles II then makes two “fatal errors”: a 1663 act lets people export bullion freely, and a later coinage act lets private bankers mint at the Royal Mint and keep the seigniorage.
1688 and the Tonnage Act trick
James II lasts three years. William of Orange lands with, in A. N. Field’s line that Goodson loves, “a whole swarm of Jews from that financial centre.” John Churchill, later Duke of Marlborough, deserts James. Goodson cites the Jewish Encyclopedia for an annual £6,000 stipend from Solomon de Medina as pay for that desertion.
William III surrenders the royal right to issue England’s money “free of debt and interest” to The Governor and Company of the Bank of England. Field’s punchline: “Britain had paid her way as she went until the Jews arrived. The pawnshop was then opened.”
The front man is William Paterson, a “retired pirate” in Goodson’s phrase. Paterson later boasts that the Bank “hath the benefit of interest on all moneys which it creates out of nothing.” Official purpose: lend William unlimited sums at 8 percent to fight Louis XIV.
Opposition came from goldsmiths, landowners, and people who thought the Bank “would become the keystone of the commercial world.” Parliament still passed it, hidden two-thirds of the way down a bill titled as an act for “Rates and Duties upon Tunnage of Shipps and Vessells.” The first two-thirds pile taxes on ships, beer, and liquor to service interest on future loans. Soon after come land, paper, poll, salt, stamp, and window taxes.
That founding as a war-finance machine is real history. The Tonnage Act really did bury a central bank inside a tax bill.
Wars, a 2 percent reserve, a mortgage
A pattern follows, he says. Start wars, especially against countries with state banking (Napoleonic France, later Imperial Russia, Germany, Italy, Japan, Libya). The national debt and the lenders’ profits rise together.
By 1696 the Bank has £1.75 million in notes out against £36,000 in gold. That is a 2 percent reserve. After the War of the Spanish Succession the debt is £30 million by 1720.
The wars against France (1792 to 1815) and the United States (1812 to 1814), which he blames on Mayer Amschel Rothschild after Congress refused to renew a bank charter, push the debt to £885 million. William Cobbett reads the founding Act and writes the line that closes the argument: the investors meant “to mortgage by degrees the whole country… lands… houses… property… labour.” The result is “starvation in the midst of abundance.”
On 14 February 1946 Labour nationalises the Bank. Shareholders get £11,015,100 in Treasury notes, redeemable after 20 years. Goodson calls it propaganda. Fractional reserve does not change. On 6 April 1974 the Bank sets up Bank of England Nominees Ltd (company 1307478). He suspects a reverse takeover by private holders, hidden behind the Royal Charter and the Official Secrets Act.
What holds, and what is a folk tale
The Bank of England as a war-finance machine is not a forum invention. Neither is a national debt that detonates when the state fights on borrowed book-entry money. A 2 percent metallic reserve is the textbook picture of early fractional reserve. Cobbett’s “mortgage the whole country” still reads like a fair description of perpetual interest on public debt.
The medieval “expel the Jews, build cathedrals, work 14 weeks” story is nostalgia plus scapegoating. Tally sticks deserve a better book than this one. The Pratt letters do not. And 1946 did put the Bank in public ownership. Calling that a logo change is an argument about who still creates the deposits, not proof of a secret nominee coup in 1974.
Next up is Napoleon, and Goodson finally has a state bank he likes.
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