Middlemen in English Business vS79 



"without the danger and troul^le of keeping, carrying, or telhng it."^ 

 The original of this was likely the use of safety deposit vaults as de- 

 positories for valuables."^ The goldsmiths performed both these serv- 

 ices. They received on deposit gold and silver plate and coin, as 

 well as government talUes, and gave the depositors book credits and 

 notes.^ The earliest known record of a goldsmiths note issued for an 

 amount of money deposited with him dated from 1667.-* These 

 were the original of the modern bank-note. The principle of the 

 check and check -system was also devised at this time by the gold- 

 smiths. Loans to goldsmiths for their notes was practically limited 

 to the depositor's needs of running cash; loans for other purposes were 

 generally backed by mortgages.^ This fact made the rapidity of the 

 circulation of the notes very great. In 1672 it was reported that 

 "the same mony was transmitted nine times in one morning . . . 

 and the mony in specie was left untouched at last."^ In 1691 North 

 said the goldsmiths held less than one-tenth of their deposits as cash 

 reserve.'^ Nevertheless their notes commanded a premium over the 

 other existing currency.^ All these facts attest the invaluable ser\'ice 

 afforded to trade by goldsmith banking. 



The goldsmiths made great profits. They never paid more than 6 

 per cent on deposits, but often charged 20 or 30 per cent for loans.'* 

 Their very low reserves must have increased this difference immensely. 

 They rapidly accumulated fortunes and became the most influential 

 capitalists. 



Throughout the latter half of the seventeenth centur\' there was a 

 growing demand for a commercial bank as an aid to merchants.' ° It 

 appears that the merchants resorted to the goldsmiths with reluct- 

 ance;" but the dispatch of trade forced them, in spite of extensive 



1 Hartlib, Essay, 28-9. 



" Beawes, Lex Mer. Red., .^64. 



3 Bisschop, Rise, 62. 



^ Price, Handbook, 41. 



* Pollexfen, Discourse, 73. 



^ Lewis, Proposals, 2. 



" North, Discourse, 2L 



^ Hodges, Groans, L3-14; Barbon, Discourse, 19. 



' Martin, Grasshopper, 117; Price, Handbook, 63. 



1 ' See writings of HartHb, Benbridge, Lambe, D'Ouvilly, Houghton, Patterson, 

 Barbon, Chamberlain, Murray, et al. 



1' Barbon, Discourse, 19. The big merchants and dealers appear not to have 

 been the goldsmiths' best customers. Chamberlayne, Several Objections, 18. 

 The bankers solicited the merchants personally on the Royal Exchange for iho 



