All the projectors of this busy time, however, were not so absurd as Chamberlayne.  One among them, William Paterson, was an ingenious, though not always a judicious, speculator.  Of his early life little is known except that he was a native of Scotland, and that he had been in the West Indies.  In what character he had visited the West Indies was a matter about which his contemporaries differed.  His friends said that he had been a missionary; his enemies that he had been a buccaneer.  He seems to have been gifted by nature with fertile invention, an ardent temperament and great powers of persuasion, and to have acquired somewhere in the course of his vagrant life a perfect knowledge of accounts.

This man submitted to the government, in 1691, a plan of a national bank; and his plan was favourably received both by statesmen and by merchants.  But years passed away; and nothing was done, till, in the spring of 1694, it became absolutely necessary to find some new mode of defraying the charges of the war.  Then at length the scheme devised by the poor and obscure Scottish adventurer was taken up in earnest by Montague.  With Montague was closely allied Michael Godfrey, the brother of that Sir Edmondsbury Godfrey whose sad and mysterious death had, fifteen years before, produced a terrible outbreak of popular feeling.  Michael was one of the ablest, most upright and most opulent of the merchant princes of London.  He was, as might have been expected from his near connection with the martyr of the Protestant faith, a zealous Whig.  Some of his writings are still extant, and prove him to have had a strong and clear mind.

By these two distinguished men Paterson’s scheme was fathered.  Montague undertook to manage the House of Commons, Godfrey to manage the City.  An approving vote was obtained from the Committee of Ways and Means; and a bill, the title of which gave occasion to many sarcasms, was laid on the table.  It was indeed not easy to guess that a bill, which purported only to impose a new duty on tonnage for the benefit of such persons as should advance money towards carrying on the war, was really a bill creating the greatest commercial institution that the world had ever seen.

The plan was that twelve hundred thousand pounds should be borrowed by the government on what was then considered as the moderate interest of eight per cent.  In order to induce capitalists to advance the money promptly on terms so favourable to the public, the subscribers were to be incorporated by the name of the Governor and Company of the Bank of England.  The corporation was to have no exclusive privilege, and was to be restricted from trading in any thing but bills of exchange, bullion and forfeited pledges.