Charitable Corporation

The Charitable Corporation was an institution in Britain intended to provide loans at low interest to the deserving poor, including by large-scale pawnbroking. It was established by charter in 1707. Its full title was "Charitable Corporation for the relief of the industrious poor by assisting them with small sums upon pledges at legal interest". It became dishonest, and Smollett called it a "nefarious corporation". Certain of the directors speculated wildly and lost most of the shareholders' money.

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 bookkeeper 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 percent) 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.

According to the subsequent report of a House of Commons Committee, little business was done until 1725, when a new committee (Board of Directors) was appointed in October 1725, consisting of Sir Robert Sutton, Sir John Meres, Sir Fisher Tench, Dennis Bond, Archibald Grant (later Bt), and others. They proceeded to appoint officers, including John Thomson as warehousekeeper and Mr Clarke as surveyor in November 1725. Following a deficiency at the Spring Garden warehouse, the surveyor was required to report weekly to the Committee concerning pledges at the Fenchurch Street warehouse, but Thomson the warehouse keeper instead procured his dismissal in May 1726. William Burroughs joined the Committee in March 1727, and William Aislabie and Hon. Walter Molesworth in December 1729. Assistants were also appointed from 1726, including William Squire, George Jackson and John Torriano (disqualified from office in 1729).

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