History of banking

"The first public institution in England partaking somewhat of the nature of a Bank was the Exchequer, founded by William the First: it still flourishes under Victoria, and, after an existence of eight hundred years its objects remain unchanged... The original name of the Exchequer was Scaccarium... not improbably derived from scaecus or scaccum, the "chess board," because a chequered cloth was used [by]... the accomptants of the English Court of Exchequer in counting the money inasmuch as the squares were understood to represent figures corresponding to the amounts placed thereon."

"Previous to, and immediately after the Norman Conquest, there was very little money in use in England: all obligations were discharged by personal service and by payments such as cattle, horses, dogs, hawks, &c. &c."

"In former times... the Exchequer was literally the bank of the Lord High Treasurer; but this was at a period when the existing facilities and securities for the transfer of money were... almost wholly unknown; when bank credits, bank cheques, and bank notes had no existence; and when the whole system of pecuniary intercourse was rude and imperfect: but since the establishment of the , the Exchequer has become rather an office of accounts and control than a repository for the safe custody of cash."

"The private bankers of England of whom we have the earliest cognizance, were in a very different position from their successors of the present day. The first were Jews, aliens in blood and religion; contemned, hated, feared, and despised. In the land of their adoption they were very soon made the victims of more barbarous cruelties and oppressions than were ever inflicted upon any people whatever."

"After this event, no trace of the existence of the Jews in England can be found till long after the Reformation... [T]his oppressed people paid nearly one third of the whole revenue of the kingdom."

"Hence also the term bankrupt... for when the dealer in money in former times failed to meet the claims made upon him by his professional brethren, his table or board was publicly broken in pieces, and himself declared unworthy of credit. The stigma of bancorotto henceforth adhered to him, and he was accordingly driven out from the society of the still solvent usurers."

"The origin of public banking as the term is at present understood is unknown. The dates generally admitted for the founding of the leading European banks are as follows: Bank of Venice, 1157, 1171, 1173; of Florence, 1260; of Barcelona, 1349; of St. George, Genoa, 1407; of Amsterdam, 1609; of Hamburg, 1619; of England, 1694; of France, 1800. ...[T]he Italians being credited with elaborating and completing the self-checking system of double-entry now in common use."

"The clearing house was first established... in London in I773, and in 1775 occupied its building in Lombard Street. Its object was the ready and easy exchange of checks, drafts, bank-notes, and other evidences of indebtedness between banks. In May, 1864, the Bank of England joined it, since which time transfers and exchanges have been made without the intervention of bank-note or specie. The clearing-house and each banker using it has an account with the Bank of England, and the balances due at the close of the daily transactions are settled by the transfer of accounts on the books of that bank. The clearing-house in New York City—the first in the United States—was established Oct 1st, 1853, since which time the banking centres of each geographical section of the country have some bank of clearing for their own convenience."

"A fresh revolt of the Venetians resulted in an order... by the emperor to confiscate all their property... and to seize and imprison their persons. The doge... issued orders... to depart immediately. ...The emperor, in return... letting loose a fleet and waging a destructive war upon all the dependencies of Venice. The Venetians were aroused as never before... and in one hundred days... [o]ne hundred and thirty fully armed vessels sailed under the command of Doge Vitale Michieli II. The fleet departed for Dalmatia. Trau and Ragusa were taken and well-nigh destroyed, and the fleet sailed for the Archipelago. When off Negropont they were met by the governor, who persuaded the doge to send ambassadors to the emperor. These Venetian envoys were... detained all winter in prolix negotiations. In the meantime a... plague broke out among the fleet at ... and in the spring of 1173 a miserable remnant... of only seventeen vessels, made its way back to Venice, carrying with it the seeds of the plague. ...The imported pestilence spread itself over the city, sparing neither sex, age, nor condition; the populace accused the doge of being the author of these calamities, and when he appeared before the infuriated multitude he was murdered on the steps of the ducal palace. But out of all this misery and disorder arose a new order... Changes were made in the character of the government, limiting the powers of the doge, and Sebastiano Ziani was elected and installed in the ducal palace."

"A greater danger to gold was war. The gold standard in the last century owed much to the intelligent management of the ... It owed much more to the British peace. In the next century warring governments would, as did that of Pitt, turn to their central banks for the money that they could not raise in taxes. And no bank, whatever its pretense to independence, would even think of resisting. Most dangerous of all would be democracy. The Bank of England was the instrument of a ruling class. Among the powers the Bank derived from the ruling class was that of inflicting hardship. It could lower prices and wages, increase unemployment. These were the correctives when gold was being lost; euphoria was excessive. Few or none foresaw that farmers and workers would one day have the power that would make governments unwilling to impose these hardships even in so righteous a cause as defense of the currency. However, it was early seen that the interests of the rich in these matters could differ from those of others. Writing in 1810, Ricardo [made that observation in a September 6 letter to the Morning Chronicle editor]... In England the triumph of Ricardos monied class was complete or nearly so. In the United States, however, it was subject to the sharpest of challenges. In one form or another, this challenge was to dominate American politics for the first century and a half of the Republic. Only the politics of slavery would divide men more angrily than the politics of money."

"In ancient in the earliest times barley was the medium of exchange for most transactions. ...grain continued throughout these centuries to be the standard of payment and repayment. However, even before 3000 B.C., ingots of copper and silver were also exchanged. There were two standards of value: grain and silver. Silver was used mainly in the town economies... while grain was used in the country. There was no coined money until the first millenium B.C.; payments in metal were by weight."

"[T]he is to the Agriculture, Commerce, and Finance of Great Britain a Sun; and the Circulation of so many Millions of its paper is the basis on which its convenience, property, and safety, have hitherto rested."