George Savile

The growth of clearly defined and opposing parties, which had taken the opprobrious titles Whigs (Scottish horse thieves) and Tories (Irish cattle rustlers), has been the most significant development in English political life over the last quarter century.

The Whigs support the Glorious Revolution and the Protestant succession.

The Tories, although supporting the new monarchs in a de facto sense, are disturbed by the disruption to the divine succession which the Glorious Revolution entails.

Along the Court/Country axis, court politicians are either in government or seek to be, and are thus supportive of centralized power and the dominance of Parliament by the executive.

Country politicians distrust centralized power and are keen to secure the independence of Parliament.

Parties had first formed during the exclusion crisis of 1679–81, but it is the Triennial Act of 1694, which reestablishes the principle of regular parliamentary sessions once every three years, that unintentionally gives life to party conflict.

The country now remains in a grip of constant election fever (ten elections in twenty years) and loyalties among MPs are difficult to establish, which increases partisanship and rivalry in Parliament.

This state of political instability has been called the 'Rage of Party'.

Lord Halifax establishes the Bank of England in 1694 with another set of loans from Scottish trader and banker William Paterson, who had made his fortune with foreign trade (primarily with the West Indies) in the Merchant Taylors' Company.

Paterson, having described in his pamphlet A Brief Account of the Intended Bank of England his proposal to found an institution to act as the English government's banker, proposes a loan of one million two hundred thousand pounds to the government; in return the subscribers are to be be incorporated as The Governor and Company of the Bank of England with long term banking privileges including the issue of notes.

The Royal Charter is granted on July 27, 1694, through the passage of the Tonnage Act of 1694.

Public finances are in so dire a condition that the terms of the loan are that it is to be serviced at a rate of eight percent per annum, and there is also a service charge of four thousand pounds per annum for the management of the loan.

The first governor is Sir John Houblon, a Lord Commissioner of the Admiralty.

The Bank is constructed above the ancient Temple of Mithras, London at Walbrook, dating to the founding of Londinium in antiquity by Roman garrisons.

Mithras was, among other things, considered the god of contracts, a fitting association for the Bank.

It will soon become a mighty engine of government: the institution of national debt provides a basis for England’s eventual financial domination of world markets.