Middlemen in English Business 377 



men had suffered many inconveniences and abuses in borrowing 

 money on their land's security.^ The passage of this law gave a legal 

 standing to a registered mortgage which made it sound collateral for 

 loans. 



But the nucleus of modern commercial credit is the bank. Banking 

 serves commerce and trade extraordinarily. Banks are places of 

 security for the deposit of money, thus providing against the contin- 

 gencies of the honesty and ability of servants, and of theft, fire and 

 loss. Depositors are allowed interest on deposits. The floating idle 

 credit of the community is collected and employed in large sums to 

 facilitate trade. The productive capital of the nation is increased, 

 and economized; its rapidity of circulation is furthered. The bankers 

 employ their own credit as capital; their note issues, however fictitious 

 a credit it may be, are a stimulus to trading activity. Banks provide 

 advances to persons who want to borrow. Those engaged in trade are 

 enabled to augment their capital and extend their operations and their 

 wealth. The transmission of money is another benefit performed for 

 society; the hazards and expense of actual carriage of money are re- 

 duced. Banking methods economize the time required in financial 

 bargaining: the counting and assa^'ing of coins are eliminated. The 

 tradesman is relieved from the care of presenting and collecting bills 

 receivable; the custody and care of these are left to the banker. The 

 standing of a dealer is established by his credit and respectability at 

 the bank; the banker is the constant referee as to the financial respon- 

 sibility of commercial houses. 



Banking was inaugurated by the goldsmiths. They had long done 

 a pawnshop business in connection with their smith work.- In 1638 

 Charles I established a register of pawns and sales and allowed fees in 

 proportion to the size of the loan on the pawn.^ The pawn-broking 

 was continued along with their banking business as late as 1690. ■* 

 About 1645 they became buyers and exporters of bullion.^ During 

 this period of insecurity due to the Ci\dl Wars the merchants depos- 

 ited their cash and plate \\'ith the goldsmiths for safe keeping.*' By 



' "Grand Concern," 9-11. 



- Pawnbroker's shops were first opened in England during the reign of Elizabeth 

 and were known as "Banks for the Relief of Common Necessity," which loaned 

 money on pledges. Besant, Tud. Lon., 238. There was little borrowing for pur- 

 poses of trade evidently. Cunningham, Growth, 325. 



3 Royal Charter of London, in Maitland, I, 316, 319. 



^ Price, Handbook, 63. 



* "Mystery," 4. 



" Ibid., 3; "Appeal to Caesar," 22, quoted in Martin, Grasshopper, 117-18. 



