Charitable Corporation - Origin

Origin

The original object was that small tradesmen might obtain loans by depositing a pledge in the corporation's warehouse, so that they might not have to sell goods at an undervalue when suffering cash flow difficulties. The initial capital was £30,000. This was increased to £100,000 in 1722, then £300,000 in 1728, and finally £600,000 in 1730. In effect, the corporation was a pawnbroker.

The company published a pamphlet in 1719, setting out its practice. The procedure was that a borrower took goods to one of the corporation's warehouses and signed a bill of sale. The warehouse keeper valued the pledge and he and an assistant signed a certificate. This was passed to the bookeeper for entering in the corporation's accounts, and then to the cashier who paid the borrower his loan. Both the warehouse keeper and the cashier were required to give security, and there were surveyors of warehouses to act as a check on the warehousekeepers. Furthermore the books were signed every night. Unredeemed pledges could be sold after a year. The borrower had not only to pay lawful interest (five per cent), but also fees of a similar amount, so that the company was actually receiving considerably more than "lawful interest". These systems should have been sufficient to prevent fraud, but in the late 1720s, compliance with the procedure became lax, opening the way to fraud on a massive scale.

The original warehouse was at Duke Street, Westminster, but was in the company's early years replaced by one at Spring Garden near Charing Cross, London. By the mid 1720s, the main warehouse was in Fenchurch Street, London but that at Spring Garden was retained. The Spring Garden warehouse was on the site of 39–41 Charing Cross.