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Royal assent was given for the formation of the Bank of England, in part, to help pay for the Nine Years' War (1688-97) with France in 1694. The founding of the Bank and, and in effect, the loan it was created to provide (£1,200,000) were to be financed by subscription payments from 'any person or persons, natives or foreigners, boddies politick or corporate' (p.291). The subscribers were then to be repaid with an annual £100,000 payment which was to be raised from new customs duties and taxes.

The Act of Paliament I just quoted (the Tonnage Act) stipulates that by 1705 (i.e. after 12 years) - with annual payments of £100,000 - the loan would be repaid in full at which time the Bank of England company should 'cease' (p.293) and the loan would, presumably, be considered to have been fully paid. However, the Act also stipulates an 'eight pound per centum per annum' return rate for the subscribers.

My question is: with the twelve £100,000 payments and the subsequent dissolution of the bank there is simply no room for the 8% percent return, so where did it come from?

(All page numbers are from this book (the link is to Google Books).)

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Section XVIII of the Act specifies that the amounts you describe are to be kept apart in the accounts of the Exchequer.

This means that the retirement of the principal amount is not being paid annually, as your question assumes, but rather the specified amounts are being paid into what accountants now call a sinking fund. , which is paid out in full upon the termination of the Bond.

Sections XXVII and XXVIII of the Act outlines what investments are, and are not, allowed by the sinking fund.

More information on sinking funds, and other means of accounting for liabilities, can be obtained from any Intermediate Accounting course or text book on Liabilities.

Update - from my comments below:
Part of the reason for the sinking fund is that, provided it is competently managed, the subscribers to the Bond don't want to be paid back until the Bond reaches term. The subscribers, by having the accounts and the sinking fund audited, know that the Bond issuer (the Crown in this case) is saving up to repay the Bond.

The terms of Sections XXVII and XXVIII, though poorly described in terms of modern accounting and economics, in essence are describing that only low risk investments are suitable for the sinking fund to invest in. In modern terms: No stocks and no junk bonds.

Those notes you refer to in your comment are simply cheques by another name; financial instruments payable to a named payee that can be endorsed to another payee. Note the derivation of the (British) English term cheque, from exchequer.

Update #2 For readers who desire more information on this type of accounting, also see defeasance. Also, the term sinking fund is in no ways meant in a derogatory sense as it is the bond issuer's liability that is sinking, or reducing, not the fund or other assets of the Bond issuer.

Update #3:
Referencing cheque and check in the OED, the former is listed as an alternative spelling for two specific senses of the latter. Usage in this sense is evidenced from 1695 under check, and from 1706 under cheque, but the spelling in both cases through the 17th and early 18th centuries is cheque. The meaning at that time was really for the counterfoil, or what we now refer to as the cheque stub, rather than for the note or financial instrument itself. Check and exchequer both derive from the French word for a checked cloth, but evolve separately until uniting again in the late 17th century as the newly coined word cheque, essentially as a pun on the double derivation.

Rereading portions of the Act again, it seems evident that the subscribers were investing in what we now would call preferred shares of the new corporation, not in a bond; thus the permanent nature of the loan to the Crown.

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Perhaps it was a typo in your answer, but Section XVIII talks about a single amount (not 'amounts') - the £140,000 that was to be the annual sum of the new taxes imposed by the Act and it states that it should be kept seperately. Presumably, this means apart from other tax revenues. As to the frequency of payments, Section XXI states that 'the said [...] sums [should be] respectively paid and advanced, as shall be after the rate of eight pounds per centum per annum; and that at any time UPON TWELVE MONTHS NOTICE, after the first day of August' (emphasis mine). –  absconditus Jan 1 at 0:07
    
@absconditus: Yes, it was a typo. Should have read "XXVII and XXVIII", as corrected above. –  Pieter Geerkens Jan 1 at 0:12
    
XXVII and XXVIII include some of the King's concessions to the subscribers (allowing them to issue notes, for example). Although I do not know what a sinking fund is, I highly doubt the Bank of England was one. In A History of Money, Davies argues that the reason the King consented to having the bank created in the first place was because he could not raise the needed funds to fight France (£1,500,000) all at once from the population. Your argument implies that the (£1,200,000) owed to the subscribers would have had to be paid at once 'upon the termination of the Bond'. –  absconditus Jan 1 at 1:10
    
@absconditus: Read the link for a sinking fund; you are not understanding the accounting involved. I am a (non-practicing) accountant, so I sometimes take more for granted in my explanations of it than I should. –  Pieter Geerkens Jan 1 at 2:29
    
@absconditus: Part of the reason for the sinking fund is that, provided it is competently managed, the subscribers to the Bond don't want to be paid back until the Bond reaches term. The subscribers, by having the accounts and the sinking fund audited, know that the Bond issuer (the Crown in this case) is saving up to repay the Bond. –  Pieter Geerkens Jan 1 at 2:35
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