What is the Old Lady?
The “old lady” is an 18th century nickname for the Bank of England. It’s a short version of the Old Lady of Threadneedle Street, a reference to the bank’s address in central London.
Key points to remember
- The Old Lady, or Old Lady of Threadneedle Street, is a colloquial nickname for the Bank of England.
- This nickname comes from a satirical cartoon from 1797 concerning the suspension of the redemption of gold under the Restraint Act of 1797.
- The nickname has since appeared in cartoons, newspapers, books, and common usage to refer to the Bank.
Understand the old lady
The Old Lady, nickname for the Bank of England, originated in a 1797 political cartoon by James Gillray. The cartoon, “Political Ravishment, or The Old Lady of Threadneedle Street in Danger!” represents a woman dressed in a dress of one and two pounds Remarks sitting on a chest marked “Bank of England”. A man, Prime Minister William Pitt, forcibly kisses the woman while reaching for the gold coins in his pocket. The woman shouts: “Murder! murder! Grated! murder! O villain! why did I keep my honor intact for so long, that it was finally shattered by you? O Murder! Grated! Rapture! Ruin! Ruin! Ruin!!!”
The cartoon comments on Prime Minister William Pitt the Younger’s then-recent decision that, under the Banking Restrictions Act of 1797, the bank would suspend redeeming notes for gold and begin making payments to customers exclusively in paper money rather than coins. The Act was passed in response to an incipient run on the Bank after a period of issuing heavy paper notes to finance the war with France and sparked by the landing of French forces near the town of Fishguard.
The historic moment was a test of public confidence in paper money as well as the political power of the Prime Minister to impose his prerogatives. It was the first time in the Bank’s history that its notes were no longer redeemable in gold. Leaders of the opposition Whig party in Parliament called the outrageous repeal law a private contract and compared the Bank to an elderly woman being seduced by a crook (i.e. Pitt the Younger). This comparison later became the basis of Gillray’s cartoon.
This caricature of the Bank of England as an old woman stuck and would repeatedly appear in political cartoons, newspaper headlines and common financial parlance.
History of the Bank of England
The Bank of England, now the central bank for the whole of the United Kingdom, came into existence in 1694 and provided the model for most central banks operating in the world today. Initially, the Bank of England also operated as a retail bank. The bank suffered its first crisis in 1720, when the South Sea Company financed part of Britain’s national debt and acquired trading rights in what is now South America. A surge in South Sea Company stock prices ensued. The stock eventually collapsed and many lost their fortunes.
The bank moved to Threadneedle Street in 1734 from its original location on Walbrook.
Another crisis in 1825 prompted the Bank of England to open branches across the country to exert greater control over the currency. In 1866 the Bank of England refused to bail out the Overend Gurney discount house after it collapsed under the weight of bad debts. The crisis eventually expanded the Old Lady’s role as a lender to failing financial institutions.