BANK; BANKER; BANKING 



BAXK; IIAXKKR; BANK 



round the Forum ; and their business wu t luud the money of the 

 *Ute to persons who could give security. The system arose out of 

 oircuowUnoM of urgent pecuniary and political pressure. The plebeians, 

 11.0. 852, were desperately indebted : it wu customary for them 

 iow from one person in order to pay off a debt to some other 

 person, and so on, and it wu to meet this state of thing* that fsjfcfss* 

 r.n mfnttrii were appuiaU-d with power to make loan* on cattle or 

 land; and rtato officer* of thii duM-riptuni. triumviri mensarii, con- 

 tinued to b* appointed from time to timo and for a limited period, in 

 eossoni of monetary distress all through the republican period. The 

 tumtmtarii, or mtmnmlarii were a permanent body al*o appointed by the 

 government, and more properly approached to modern notions of what 

 tankers are, or ought to be; both the treuury of the government 

 and individuals appear to have deposited money with them, on which 

 they paid and received interest They were also engaged like the 

 ryntfcut'i in changing coins for a commission, and further, in exami- 

 ning and deciding upon the intrinsic fineness and genuineness of all 

 coin submitted to them. Under the empire they formed a distinct 

 corporation, and, like the argentorii, were subject to the /.ro/rrtiu urbi. 

 There is a curious account of a collapse of credit at imperial Rome, and 

 of the meuures taken by the government for the resuscitation of con- 

 fidence, in Tacit. ' Aurul..' vi. 17. 



J/r*urii are also mentioned u being appointed by the people in the 

 city of Temnos, in Asia Minor, (Cic. ' pro Klac. 19.' 



During the middle ages, in which commerce wu but little developed, 

 there could be no field open for banking business ; but on the revival 

 of commerce in the 12th century, and when the cities of Italy engrossed 

 nearly all the trade of Europe, the necessity again arose for the employ- 

 ment of bankers. These at first carried on their business in the public 

 market-places, or exchanges, where their dealings were conducted on 

 Wu'lfr whence the origin of the word bank, from franco, the Italian 

 word for a bench. The successful manufacturing efforts of the Floren- 

 tine* brought them into commercial dealings with different countries 

 in Europe, and thence arose the establishment of banks. In a short 

 time Florence became the centra of the money transactions of every 

 commercial country in Europe, and her merchants and bankers accu- 

 mulated great wealth. 



The banks here mentioned were private establishment*. The earliest 

 public bank established in modern Europe wu that of Venice, which 

 was founded in 1157. Its origin wu briefly this : Between 1156 and 

 1171, on the occasion of great impending danger from a war with the 

 Greek empire, at the head of which was Manuel Comnenus, money 

 being greatly wanted by the republic to meet the exigencies of the 

 crwii!, forced loans were levied on the most wealthy citizens, and the 

 Chamber of Loans (la Camera degl' imprestiti) wu established, to 

 which the contributors were made creditors at an annual interest of 

 four per cent. : a rate far below the standard of the age. These creditors, 

 in process of time, were incorporated into a company for the manage- 

 ment of their joint concerns, and thus formed the basis upon which 

 wu afterwards erected the bank of Venice. This method, by which 

 the above-named loan wu acknowledged, is believed to be the earliest 

 tnstanon on record of the funding system, and the first example, in any 

 country, of a permanent national debt. The bank wu therefore an 

 incorporation of public creditors, to whom privileges were given by the 

 state u some compensation for the withholding of their funds. The 

 public debt wu made transferable in the books of the bank, in the 

 ame manner u the national debt of England is transferable at the 

 present time ; it wu made obligatory upon the merchants to make 

 their contract* and draw their hills in bank-money, and not in the 

 current money of the city. [For an explanation of this difference, see 

 AGIO.] The effect of this regulation wu, that all payment* of that 

 nature were made by a transfer from one name to another in the bank- 

 eopunts, of the funds deposited in its coffers. This establishment, 

 which wu always essentially a bank of deposit and not of issue the 

 difference between which functions will be described further on- 

 existed for more than six centuries, or until the subversion of the 

 republic in 1 707. Its money at all times bore a premium, or agio, over 

 the current money of the city. 



About the year 1MO, the cloth-merchants of Barcelona, then a 

 wealthy body, added the business of banking to their other commercial 

 pursuit* ; being authorised so to do by an ordinance of the king of 

 Aragon, which contained the important stipulation, that they should 

 be restricted from acting u bankers until they should have given 

 sufficient security for the liquidation of their engagements. In 1401, 

 a bank wu opened by the functionaries of the city, who declared their 

 public fund* answerable for the safety of money lodged in their bank, 

 which wu a lank of deposit and circulation, the first of the kind 

 established in Europe. 



The Bank of Genoa wu planned and partially organised In 1345 ; but 

 wm* not fully established and brought into action until 1407, when the 

 Bomerou* loans which the republic had contracted with its citizen* 

 were consolidated, sad formed the nominal capital stock of the bank. 

 This bank received the name of the Chamber of 8t George, and it* 

 isniJjsniuit wu intrusted to eight directors, chosen by the proprietors 

 of the stock. As a security for Its capital in the hands of the republic, 

 the bank received in pledge the island of Corsica, and several other 

 possessions and dependencies of Genoa. The Bank of 8t George wu 

 pillaged by the Austrian* m 1746 ; and in 1800, when the French were 



besieged in Genoa, they appropriated the treasure of the bank 

 payment of their troops. Since that time the prosperity i the 

 establishment has been at an end ; it is no longer used as a place of 

 deposit for money, and it* shareholders are but ill-repaid, by the 

 assignment of a portion of the revenues of the town, for the robberies 

 committed upon them. 



The bank* of note next established, of which we possess say account, 

 were opened in Holland and in Hamburg in the early part of the 17th 

 century. The most celebrated of these wu the Bank of Amsterdam, 

 established in 1600, simply u a bank of deposit, to remedy the incon- 

 venience arising from the great quantity of dipt and worn foreign coin 

 which the extensive trade of the city brought there from all parts of 

 Europe. This bank, which was established under the guarantee of the 

 city, received foreign coin, and the worn coin of the count rv 

 real intrinsic value, deducting only a small per oentage which wu 

 necessary for defraying the expense of coinage, and the charges of 

 management. The credit given in the bank books for coin thus 

 received, wu called bank-money, to distinguish it from the current 

 money of the place. The regulation* of the country directed that all 

 bill* drawn upon or negotiated at Amsterdam, of the value of 600 

 guilders (about 55i) and upward*, must be paid in bank-money. Every 

 merchant wu consequently obliged to keep an account with the bank, 

 in order to make his ordinary payments. 



The Bank of Amiterdam professed to lend out no part of its deposits, 

 and to possess coin or bullion to the full value of the credits givm in 

 its books. The necessary expenses and profit* of the establi.- 

 were provided for by means of certain fee*, payable by the merchants 

 upon opening accounts, and upon mlring transfer*, and from small 

 fine* for irregularities. In 1679, the French armies advanced to 

 Utrecht, and a panic at Amsterdam took place ; the depositors in great 

 numbers demanded their money, when it wa* repaid with such ease, 

 that every one was satisfied as to the solvency of the establishment. 



In 1775, the treasure in it* keeping wu estimated to have been 

 33 millions of florins. In December, 1790, they declared that they 

 should retain ten per cent, of all deposits, and would return none of 

 less amount than 2500 florin*. In 17U4, on the invasion of the French, 

 the bank wu obliged to declare themselves to have lent to the states 

 of Holland and West FriesUnd, and the West India Company, more 

 than 10,500,000 florins. Bank money, which previously bore an agio 

 of 5 per cent., fell immediately to 16 per cent, below the current 

 money. Thus fell an institution which had obtained, and it wu of 

 course thought had deserved, boundless credit. 



The Bank of Hamburg was established in 1(119, on the model of that 

 of Amsterdam originally. It is purely a deposit bank, for the t > 

 of sums from the account of one to the account of another of those 

 who deal with it No deposits, however, are received in coin. l>ut ouly 

 in bullion. Down to 1845, the bank charged four-ninths, or nearly one- 

 half per cent., for the care and custody of the deposits ; but since that 

 date, its charge is one mille for expanses. It advances money on 

 jewels, up to three-fourths of their value. The city is responsible for 

 all deposits, which may be sold by auction if they remain one year and 

 six months without any interest paid ; if the value be not claimed 

 within three years, the property in the deposit* is lost, and passes to 

 the poor of the city. 



Next in point of date among these establishments we find the Bank 

 of England, which was opened in 1694. As we propose to devote a 

 separate section to the description of the principles and practice of this 

 bank, we shall not further notice it in this place. 



The Bank of Vienna, established in 1708 as s bank of deposit and 

 circulation, subsequently (1798) became a bank of issue. Thi 

 tution has now in a great measure lost its commercial oharact 

 has become an engine of the government for managing the public debt 

 and finances. 



The notes of the Bank of Vienna, which had become the sole cir- 

 culating medium in Austria, having fallen to a considerable discount 

 by reason of their excessive quantity, a new bank, called the Austrian 

 National Bank, wu established in 1816, with the two-fold object of 

 diminishing the paper currency, and of performing the ordinary 

 banking functions. 



The Banks of Berlin and Breslau were erected in 1765, under the 

 sanction of the state. These are banks of deposit ami i- i;c. .-UK! liki - 

 wise discount bills of exchange. 



During the reign of the Empress Catherine, three different Imnks 

 were established at St. Petersburg; these were, the Loan Bank, tin- 

 Assignation Bank, and the Loon Bank for the nobility and towns. The 

 first, which wu established in 1772, makes advance* u|n .l.'i-.Hita of 

 bullion and jewels, and allows interest upon all sums dejxwited for at 

 least a year. The operations of thin bank, as a Monte de 1'ic'te', are 

 carried on for the profit of the Foundling Hospital in St. Petersburg. 

 The Assignation Bank, opened in St. Petersburg in 1708, and in Moscow 

 in 1770, issues the government paper-moncy, and i in all respects an 

 imperial establishment. The Loon Bank for the nobility and town* 

 advance* money on real security. It is likewise a discount-bank, and 

 acts u an insurance company. The Aid Bank, established in 1797, 

 advances money to relieve estates from mortgages, and to provide for 

 their improvement. The punctual payment of interest upon its 

 advances Is enforced by taking their estates from the possession of 

 defaulter* until the debt is discharged. 



