National Republican., 1888-02-19
BANKING.
IlIArII.ll L


concurrent with commerce, it cunnot be- sur
prSing that it should form chief element
ofprospcrity and national advantage.
We are informed that banks were first Is.
tahIi>hcd 10y the Lombard Jews, Us early as
NlN, for the exchange of money
The earliest organic or appointed banks of
Italy. where the name began and of which
We have Il record were finance Compunic,-
aS that of Venice in llj7. II was the parent
oi several others of these loans or Compa-
mics, or banks to raise loans and float loans
for the governments of the cities in which
they were formed.
The Chamber Of Loans or Bank of Venice
was originally instituted for the purpose of
managing the public debt. II was not the
creditors who were incorporated, because
every citizen in the state was Il creditor or
contributor to the loan: hence it did not re-
scmblc later institutions, which were formed
entirely of voluntary contributions to the
public loan.
The Chamber of Loans became aitcrwarl,
the famous Bank of Venice, or, tu speak
more correctly, II afterwards added banking
to its original duties.
The Spanish writers claim the Bank
Of Burcclon Spain rs the first real bank in
the modern SENSE of the word. II was
founded in liul by the magistrates Of the
town. The origin of the important invcu.
tiOn of bills OfCNchnngc H. involved in con-
siderable ubScurty; but Barcelona seem, tu
have been one of the places whcrc their rl>r
and customs were brought to the greatest
perfection. The next bank of importance,
which was almost CuutCmpurauvuu, with
that af Barcelona, was the Bank OF St
George, instituted at Genoa. Like the Bank
Of Venice il originated from the necessities
of the state; like the Bank of Venice, il was
one of deposit and issue, and all IIiliN ot cN-
change were made payable in bank money
The Bank of Amsterdam was established
in January, 1909 under the guarantee of the
city and the government of the citv ma"i>-
trltcs. The uvOwcd Object was tu afford
some relief against worn and dclacrl coins
which flowed into II great commercial mart
like Amsterdam from all the world. The
leading measure upon which II was founded
andb 10y virtue of which ii had its rapid rise
and growth was that bills of exchange were
payable only at the bank, This regulation
drew vast sums to its vaults. Every per
son who had bills to pay for himself or for
uthcr> was obliged to open an account in this
bank 10y dCpOSiting the coins or bullion need
tu Ia meet the payments. For almost two
centuries this bank enjoyed umimprachcd
credit
We find that originally there existed in
order three kinds of institutions called in
writings aud huuk> banks
The first class were MONT the differ
en-, loans tu the state hcing called Muut 10y
the ltalian,-hut would not by us be- called
banks, for they were nothing hut creditors Of
| the State. The early history of the Bank of
Venice j. an instance of this kind.
For the safe keeping of cash and iSuriug
a uniform standard of value, and for the
I
| account tO another were tlIu>C banks of Ann
stcrum, Rotterdam, Hamburg, Stockholm,
and the Bank of Venice cugrailcd tli. bust
ness upon its original constitution. BANKS
of this description had no stockholders and
/ were not intended tO make profits beyond
the EXPENSES. We may notice here that llu
| Bank of Amsterdam hupHmr the center ul
the exchange of Europe, and that i~ re-
ccipt> for money deposited were payable tu
| bearer ON demand, and answered all the
purposes of bank notes.
| Another. the third class of banks, were in
| Sttutcl for the express purpose of trading
and profit and the pruprrtUr~ by ruccyin.
realized A profit. OF this kind wcr" the
| banks of Barcelona and scotland.
! About the end of the seventeenth century
there We're in Europe upwards of twcnty-y,
different institutions called banks, varying
more or less in their constitution and modes
classes outlined. Several banks combined
the qualities; they not only lent money tu
| the State. but were allowed "a take deposits
from the public and trade with the money
and divide the profits among the bank pro-
prctOrS. The distinctive function OF {;
| banker" said Ricardo. begins aS soon rs II,
uses the money of Others; H. long H. lr Use,
| his own money he is only n capitalist III
the reign of William men were living viii,
could remember that there was no, Il Singl,
banking house in London. ~ late ~ til,
time of the Restoration traders had thcil
! strong boxes in their own houses uud palu
acccptanccs there.
But the sincrclSc of wealth produced III,
subdivision of labor. \ new class of agent,
arose, the GudSmitlS, who had vaults which
were security against fire and rubhcr>, amo
in these SHOPS all payments in coin wcr,
made The London merchants, who had
deposited their money in the mint at I'll,
Tower. abandoned that security bccatis" u
the seizures made 10y King Charles, and ruul
To distributing their money among thcil
clerks for safety, but the clerks proved ;l> TN
trustworthy us Charles; consequently
another mode of giving money III trust bc
came Indispensable.
II was hcgunkIbuut lOn, ut which time til,
merchants began placihE their money will
the GO!d>miths, who formed II great and in
ilucntia organization. The GOldSmthS nldr,
the taking of deposits, the essential icatur
of Il bank, to their occupation of buying an,
selling plate
Among ne first to give up "GuldSmithcric'
and become solely bankers was FrnCi
Child, who was called the father of the pro
trSSOn.
The progress of banking was slow and quic
until the year l,Ell when the Bank of Eng
land was established, and there was an cuur
nous increase of the business. This bank
aS first constituted, was little more than th
earliest of our description of banks. Ih,
Bank of scotland, in 1888, is the first in
stance in the world of II private joint Stucl
bank founded 10y private persons for the cN
press purpose of making Il trade of banking
depending on their own resources and en-
tirGly independent of and uncunncCtcd witt
the State.
The chief legitimate functions drvclopc
in banking are ~ an Intermediary in tn
loan of rapital-thc terms deposit am
"diScOunt' serve to characterize the iunC
tiOns. To an Amcricnn however TIA" wun
banking, H. first prLCtCrd, l. likely To hriu
/ up, to the exclusion of all others, the fun,
tiunS of issuing paper money which Uu
pioneer bankers regarded ~ the prime fun,
tiun of banking, and generally prarticcd I
% the exclusion of all others,
The great London banks, which held ii,
posts in the millions many times great,
| than the Bank of England diet not tS>u
A notes to circulate It, money.
In this country the word bank, lhruug
much of our history, has To- most people ~
nicd little more than Il place where pap,
money was manufactured and put upon I'll
public.
- We can almost pardon Mr. Huugr for h
narrow gauge history ul banking. liAnkiu
is not currency. ON the other hand, III
. practice of banking lead, Icgjljmalcly 10
vast dminutiun in the uNr Of currency,
l. Chambcrlaync and uthrr> wanted a Ian
t. Bank in England; cuurmuu, quantities {
4 money on landed security all who had Ian
could have the value of that lund in mon'