vii.] INSTITUTE OF BANKERS. 215 



was the popular prejudice that not until 1839 was it 

 rendered legal to charge a higher rate of discount than 

 5 per cent. According to the Code Napoleon, 6 per 

 cent, was the highest legal rate on commercial loans, 

 and 5 per cent, on those of real property. In the 

 United States, again, the rate is fixed by law, and 

 varies in the different States, being, for instance, 8 

 per cent, in Alabama and Texas ; 7 per cent, in New 

 York, South Carolina, Georgia, Michigan, and Wisconsin ; 

 5 per cent, in Louisiana ; and 6 per cent, in most of the 

 other States. It is unnecessary to say that these re- 

 strictions are quite inoperative. It is very remarkable 

 that so many civilized countries still fail to appreciate 

 the simple statement of Locke, that "it is in vain to go 

 about effectually to reduce the price of interest by a law ; 

 and you may as rationally hope to get a fixed rate upon 

 the hire of houses or ships as of money." 



We are generally told in histories of banking, as, for 

 instance, in that by Gilbart, that the first national bank 

 was that of Venice, founded in the year 1157, but it 

 wou]d seem that, as Mr. McLeod has pointed out, this 

 institution was not at first, in any sense, a true bank. 

 The state being deeply involved in debt, its creditors 

 were formed into a corporation and the debts made 

 transferable like our Consols. It was not until 1587 

 that the institution began to take money on deposit. 

 The depositors received a credit on the bank's books 

 equal to the actual weight of the bullion placed there, 

 which the bank undertook to keep intact in its vaults, 

 and to repay to the depositor at any time, or to transfer 

 to any one else. 



The earliest real bank appears to have been that of 



