The Online Library of Liberty A Project Of Liberty Fund, Inc. Editor of the Journal of Commerce and Commercial Bulletin, A History of Banking in all the Leading Nations, vol. 2 (Great Britain, Russian Empire, Savings-Banks in the U.S.) [1896] The Online Library Of Liberty This E-Book (PDF format) is published by Liberty Fund, Inc., a private, non-profit, educational foundation established in 1960 to encourage study of the ideal of a society of free and responsible individuals. 2010 was the 50th anniversary year of the founding of Liberty Fund. It is part of the Online Library of Liberty web site http://oll.libertyfund.org, which was established in 2004 in order to further the educational goals of Liberty Fund, Inc. To find out more about the author or title, to use the site's powerful search engine, to see other titles in other formats (HTML, facsimile PDF), or to make use of the hundreds of essays, educational aids, and study guides, please visit the OLL web site. 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Online Library of Liberty: A History of Banking in all the Leading Nations, vol. 2 (Great Britain, Russian Empire, Savings-Banks in the U.S.) LIBERTY FUND, INC. 8335 Allison Pointe Trail, Suite 300 Indianapolis, Indiana 46250-1684 PLL v6.0 (generated September, 2011) 2 http://oll.libertyfund.org/title/2238 Online Library of Liberty: A History of Banking in all the Leading Nations, vol. 2 (Great Britain, Russian Empire, Savings-Banks in the U.S.) Edition Used: A History of Banking in all the Leading Nations; comprising the United States; Great Britain; Germany; Austro-Hungary; France; Italy; Belgium; Spain; Switzerland; Portugal; Roumania; Russia; Holland; The Scandinavian Nations; Canada; China; Japan; compiled by thirteen authors. Edited by the Editor of the Journal of Commerce and Commercial Bulletin. In Four Volumes. (New York: The Journal of Commerce and Commercial Bulletin, 1896). Vol. 2 A History of Banking in Great Britain, the Russian Empire, and Savings-Banks in the U.S. Editor: Editor of the Journal of Commerce and Commercial Bulletin Author: Henry Dunning MacLeod Author: Antoine E. Horn Author: John P. Townsend About This Title: A four volume set edited by the by the “Editor of the Journal of Commerce and Commercial Bulletin” in New York city. It consists of: Vol. 1: “The United States,” by W.G. Sumner. Vol. 2: “Great Britain,” by H.D. Macleod; “The Russian Empire,” by A.E. Horn; “Savings Banks in the United States,” by J.P. Townsend. Vol. 3: “The PLL v6.0 (generated September, 2011) 3 http://oll.libertyfund.org/title/2238 Online Library of Liberty: A History of Banking in all the Leading Nations, vol. 2 (Great Britain, Russian Empire, Savings-Banks in the U.S.) Latin Nations,” by P. Des Essars; “The Banks of Alsace-Lorraine after the Annexation,” by A. Raffalovich; “Canada,” by B.E. Walker. Vol. 4: “Germany and Austria-Hungary,” by M. Wirth; “The Netherlands,” by R. van der Borght; “The Scandinavian Nations,” by A. Jensen; “Japan,” by J. Soyeda; “China,” by T.R. Jernigan. PLL v6.0 (generated September, 2011) 4 http://oll.libertyfund.org/title/2238 Online Library of Liberty: A History of Banking in all the Leading Nations, vol. 2 (Great Britain, Russian Empire, Savings-Banks in the U.S.) About Liberty Fund: Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals. Copyright Information: The text is in the public domain. Fair Use Statement: This material is put online to further the educational goals of Liberty Fund, Inc. Unless otherwise stated in the Copyright Information section above, this material may be used freely for educational and academic purposes. It may not be used in any way for profit. PLL v6.0 (generated September, 2011) 5 http://oll.libertyfund.org/title/2238 Online Library of Liberty: A History of Banking in all the Leading Nations, vol. 2 (Great Britain, Russian Empire, Savings-Banks in the U.S.) Table Of Contents A History of Banking In Great Britain; Chapter I.: Banking In England. Section I.: A Record of Beginnings. Section II.: Foundation of the Bank of England. Section III.: An Era of National Development. Section IV.: State of the Irish Currency. Section V.: Failure of Currency Reform—inflation and Reaction. Section VI.: The Committee On Banking of 1840. Section VII.: On the Bank Acts of 1844 and 1845. Section VIII.: Commercial Crises. Section IX.: Monetary Panics. Section X.: General Conclusion. Chapter II.: Banking In Scotland. Chapter III.: The Theory and Mechanism of Banking. Chapter IV.: Definitions of Economic Terms. Chapter V.: The Theory of Value. Section I. Section II. Section III. Chapter VI.: The Theory of Credit. Section I. Section II. Banking In Russia. Chapter I.: The Early Stages of Money and Credit. Section I.: Prefatory. Section II.: Introduction of Paper Money. Section III.: Financial Reconstruction Under Alexander II. And the Founding of the State Bank. Chapter II.: Methods and Operations of the State Bank. Chapter III.: Banking Vicissitudes From 1862 to 1875. Chapter IV.: The Eastern War Period. Chapter V.: Private Banks. Chapter VI.: The Bourse. Chapter VII.: The Precious Metals. Chapter VIII.: Foreign Exchanges. Chapter IX.: The Debt and Finances of Russia. History of Savings-banks In the United States. I. II. III. IV. V. TREATISES IN VOL. II. PLL v6.0 (generated September, 2011) 6 http://oll.libertyfund.org/title/2238 Online Library of Liberty: A History of Banking in all the Leading Nations, vol. 2 (Great Britain, Russian Empire, Savings-Banks in the U.S.) A HISTORY OF BANKING IN GREAT BRITAIN, by HENRY DUNNING MacLEOD, A. M.; of BANKING IN THE RUSSIAN EMPIRE, by ANTOINE E. HORN; and of SAVINGS-BANKS IN THE UNITED STATES, by JOHN P. TOWNSEND, LL.D. new york. 1896. PLL v6.0 (generated September, 2011) 7 http://oll.libertyfund.org/title/2238 Online Library of Liberty: A History of Banking in all the Leading Nations, vol. 2 (Great Britain, Russian Empire, Savings-Banks in the U.S.) [Back to Table of Contents] A History Of Banking IN GREAT BRITAIN; WITH A HISTORIC ANALYSIS OF THE PRINCIPLES GOVERNING BANKING, CURRENCY, AND CREDIT. by HENRY DUNNING MacLEOD, A. M., Of Trinity College, Cambridge, and the Inner Temple; Honorary Member of the Juridical Society of Palermo, and of the Sicilian Society of Political Economy; Corresponding Member of the Société d’Économie Politique of Paris, and of the Royal Academy of Jurisprudence and Legislation of Madrid. new york. 1896. BANKING IN GREAT BRITAIN. CHAPTER I. BANKING IN ENGLAND. SECTION I. A RECORD OF BEGINNINGS. Banking Originates in Royal Rapacity—Goldsmiths Become Bankers—Cromwell Encourages Them—The King Seizes Their Treasure—His Promises of Compensation Never Honored. BANKING, in the modern sense of the word, had no existence in England before 1640. Up to that date, merchants had been for a considerable time in the habit of depositing their bullion and cash in the Mint in the Tower, under the guardianship of the Crown. In that year, however, Charles I. being in great straits for money, in consequence of his fatal dissolution of the Parliament before it had voted supplies, seized upon the merchants’ bullion and cash in the Mint, to the amount of £120,000. The merchants were in consternation, as the cash was the provision they had made to meet their bills with. They immediately met, and drew up and presented a strong PLL v6.0 (generated September, 2011) 8 http://oll.libertyfund.org/title/2238 Online Library of Liberty: A History of Banking in all the Leading Nations, vol. 2 (Great Britain, Russian Empire, Savings-Banks in the U.S.) remonstrance to the Council. They ultimately agreed to let the King have £40,000, upon receiving adequate security for its repayment with interest. The whole of the loan was ultimately repaid to them with interest. But their confidence in the royal honor was gone; and henceforth they determined to keep their cash in their own houses, under the care of their own clerks and apprentices. But their treasures were no safer than before. The plebeian cashiers were more dishonest than the King. As the war went, these gentlemen of the quill were seized with a martial ardor; they deserted their desks in multitudes to join the army, and carried off their masters’ cash with them. Others lent out their masters’ funds to the goldsmiths clandestinely, at 4d. per cent. per day, which they kept to themselves. The goldsmiths lent out the money which came into their hands in great quantities to merchants and others, weekly or monthly, at high interest, and then began to discount mercantile bills. Finding this to be very profitable, they began to attract money from the general public by offering them interest at the rate of six per cent. and engaging to repay the sums placed with them on demand. When a customer paid in money to his account, and when they discounted a merchant’s bill, i.