-Caveat Lector-

an excerpt from:
Banking - An Illustrated History
Edwin Green�1989
Phaidon Press Limited�1989
Rizzoli International Publications, Inc
300 Park Avenue South
New York, NY 10010
ISBN 0-8474-1072-0
-----
CHAPTER TWO

THE STRUGGLE FOR STABILITY

Banking in the 17th and 18th centuries

Years, decades and even centuries have passed between the first appearance of
a technical development and its adoption on a large, international scale. In
banking history significant breakthroughs were made in the medieval and early
modern period, and in some cases the new techniques and institutions were
widely reported throughout Europe. But their adoption on a more permanent
footing and on a larger scale was none the less delayed until the seventeenth
and eighteenth centuries, an era which gave birth to some of the modern
world's leading financial institutions.

Political and economic conditions in the seventeenth century were not the most
promising setting for durable progress in banking. After a brief truce in the
fighting in the Low Countries in the second decade of the century, the much
larger conflict of the Thirty Years War entangled most of Europe between 1618
and 1648. The price in terms of manpower and war finance fell heavily on the
German territories of the Habsburg empire but this ruination was part of much
wider economic distress in the mid-seventeenth century. By the end of the
century the military ambitions of Louis XIV brought further economic and
monetary turmoil, and it was not until the 1720s that the financial community
was permitted a more stable political platform.

The Europe-wide appetite for war payments in the seventeenth century ensured
that public finance remained the most prominent theme of banking development;
there was indeed a pressing need for institutions which were large enough to
manage such expenditure but secure and impersonal enough to escape the fate of
the private bankers of the previous century. The city-states of Europe were
well ahead of the major nation-states in developing institutional banking
units. In most cases these solutions were intended to bring order to public
debt rather than provide war finance, but they were to be influential examples
for the nation-state banks of the seventeenth and eighteenth centuries.

In the Italian city-states, the tradition of converting public debts into
bank-type operations reached back to the thirteenth century. From the mid-
sixteenth century, however, the Italians were developing banks in which the
State was either a full partner or the guarantor of its funds. For instance,
the Bank of Palermo, founded in 1551, was protected by the guarantee of the
city's senate; its main functions were the collection of taxes and the
management of the State's payments and coinage. A similar enterprise, the
Tavola della Citta di Messina, was launched in Sicily in 1587. Meanwhile the
Casa di San Giorgio at Genoa, which had continued as a formal association of
the State's creditors since the fifteenth century, resumed its operations as a
deposit bank in the 1580s, and it was to continue in that role until its
assets were confiscated by the French in 1800.

This transition to institutional finance was especially successful (if
somewhat prolonged) at Venice, where the Banco della Piazza di Rialto was
authorized by a decree of the Senate in 1584 and opened in 1587. Guaranteed by
the State, the bank took deposits, accepted bills of exchange and made credit
transfers between accounts. The Rialto Bank none the less did not have the
whole-hearted support of the Senate, which in the early seventeenth century
restricted its activities on the grounds that it was making excessive profits
on stateguaranteed bonds. Intervention was taken even further in 1619, when
the Senate founded the Banco del Giro with the task of managing the public
debt and operating accounts for the State's creditors so that; ... in the said
same bank they should be given prompt and immediate satisfaction of their
credits from divers markets, bills of exchange and other dues ... in order
thus to escape the delays and obstacles which ... are very frequently the
case.

The Banco del Giro's main advantage in taking on this role was the State's
guarantee of the interest-bearing bonds issued by the bank to the State's
creditors. These partite were fully transferable and tradable, and they
circulated at the handsome premium Of 20 per cent. When the partite
depreciated rapidly during an economic and military crisis in the early 1630s,
the Senate intervened by buying them back and restoring their value. This type
of confidence-boosting commitment, in complete contrast to the state defaults
of the previous century, led to the transfer of many accounts to the Banco del
Giro in the middle decades of the century. Thereafter the bank consolidated
its position as the agent for the State's creditors, and from 1666 onwards it
also opened accounts for private and business customers depositing cash with
the bank. In this role it survived until the French invasion of Italy in 1797.

Successful and durable as these Italian experiments were, they were produced
by city-states which were no longer at the centre of economic and financial
power.

Their ancient textile industries were increasingly pushed aside by English and
Dutch imports, while the great fairs at Piacenza were displaced by the new
bourses in Antwerp, Amsterdam, Seville and London. In such conditions the
Italian citystates could  not sustain their leadership in finance and banking:
for all the sophistication of their techniques and institutions, they were not
coping with the demands of an expanding nation-state and a growing economy. In
the seventeenth century these demands were increasingly centred on northern
Europe � on London, Paris, the Baltic ports and, above all, Amsterdam.

Amsterdam's economic ascendancy was sudden and almost unchallenged. Antwerp's
pre-eminence had come to an end when the city was captured by the Spanish in
1585. Amsterdam then emerged from relative obscurity to become the leading
international market for shipping, commodities and capital; its maritime and
inland trade spread its influence throughout Europe and into the new
commercial outposts of Asia, Africa and the Americas. This extraordinary
career was not built on weak foundations. Almost from the start of its
ascendancy, Amsterdam and its citizens favoured an institutional and rule-
based approach to business. The Amsterdam Chamber of Assurance, for example,
was established in 1598; the joint-stock United East India Company was
promoted in 1602; the new bourse opened in 16o8; and a grain exchange was
commissioned in 1616. In this style the city's rise to financial preeminence
was strikingly speedy.

Central to this institutional structure was the Amsterdam Wisselbank or
Exchange Bank. The promotion of the Wisselbank was approved by the city
council in 16o6 and it was opened in 1609. Influenced by the model of the
Rialto public bank in Venice, the Wisselbank was authorized to receive
deposits and bills of exchange and to transfer payments between its customers'
accounts; lending was restricted to the City of Amsterdam itself, the Province
of Holland, and the United East India Company. This restriction was eventually
relaxed in 1683, when the Wisselbank was permitted to advance funds to private
customers on the security of gold and silver deposits.

The power and ubiquity of the Wisselbank were based solidly on its home market
of public institutions and the merchants of Amsterdam. Indeed, it was a
requirement that all bills valued at over 600 florins should be paid through
the bank, in effect forcing all the major houses to open accounts there. As a
result the number of accounts multiplied from 730 in 1609 to about 2,000 in
the 1660s and 2,700 by the end of the seventeenth century. Total deposits,
which were guaranteed by the city, averaged about 7 million florins between
1640 and 1685 � equivalent to 8 per cent of the entire wealth of the city �
and doubled to over 16 million florins by 1700 (see Table 2). Although the
Wisselbank did not play such an overt role in public finance as the Banco del
Giro at Venice, direct lending to the City of Amsterdam accounted for as much
as one fifth of the bank's assets. The bank's official responsibility for
coinage and exchange also contributed to its profitability and stability. Not
least, the Wisselbank's reputation for both security and convenience attracted
business from foreign governments as well as international traders. Sir
William Temple, in his Observations upon the United Provinces of 1673,
described how:

Foreigners lodge here what part of their Money they could transport, and knew
no way of securing at home. Nor did those People only lodge Moneys here, who
came over into the Country; but many more who never left their own; Though
they provided for a retreat, or against a Storm, and thought no place so
secure as this, nor from whence they might so easily draw their Money into any
parts of the World.

Amongst those thought to have 'provided for a retreat' in this way were
members of the English Commonwealth Parliament and the Danish court, the
Prince Palatine and the Republic of Venice. The Wisselbank was also used by
the Spanish crown to pay subsidies to Sweden in the 166os. To this extent the
Wisselbank was not only a public bank for Amsterdam and its citizens but also
a secure haven for other European governments and political interests. Its
success continued well into the eighteenth century, even after Amsterdam's
ascendancy was coming to an end, and it survived until 1820.

The Wisselbank's role as a deposit-taking and exchange bank was soon
reproduced in many of the other leading city-states of northern Europe.
Similar banks were founded at Middelburg in the United Provinces in 1616,
Hamburg (1619), Nuremberg (1621), Delft (1621) and Rotterdam (1635). Like the
Wisselbank, the Hamburg version also acted as a magnet for foreign accounts,
even serving as a go-between bank when the United Provinces were at war with
England in the third quarter of the century.

The Wisselbank and its imitators were inextricably linked to the financial and
monetary regimes of their own city-states. Yet they did not attempt, and they
were not required, to carry the full weight of sovereign debt in the same way
that the Fuggers and the Genoese bankers had in the sixteenth century. This
was clearly an area where institutional solutions might offer greater
financial continuity to the nationstates of Europe and, perhaps, greater
security to promoters and investors in banking. When the expenditure of the
major powers again accelerated rapidly in the middle of the seventeenth
century, the management of state debt emerged as a guiding theme of banking
development.

The notion of an official 'state bank' was already in circulation at the end
of the sixteenth century. In 1576, in answer to Spain's serious debt problems
and as a counter to the supremacy of the Genoese bankers, the Flemish merchant
Peter van Oudegherste had outlined a plan for a Spanish state bank. The same
idea was canvassed by Spanish bankers in 1583. A proposal to form a 'Banque de
France' was presented to Henri IV of France as early as 1608. The first plan
to reach fruition, however, was the foundation of the Riksbank, or Bank of
Sweden, in 1668. The Riksbank's activities were modelled on the deposit and
exchange role of the Wisselbank, with the important difference that its
principal customer was an ambitious and expanding nation-state rather than a
city corporation. Sweden was also the setting for an important experiment in
bank currency. Johan Palmstruch, founder of the Bank of Stockholm in 1656,
devised a paper currency to take the place of copper coins. Printed notes,
Kreditivsedlar, were first circulated in 1661. They were effectively the
earliest banknotes to appear on the European scene � predated only by the
paper currency circulating during the Chinese Ming dynasty (1368-1694) which
in turn was claimed to have originated in seventh century China. The issue of
Palmstruch's notes subsequently ran out of control and the experiment was
suspended in 1664.

It was not until the foundation of the Bank of England in 1694 that the
potential scope of a state bank became obvious. This enterprise, like so many
of its forerunners in the city-states and nation-states of Europe, owed its
birth and early upbringing to a long-running accumulation of government debt.

Throughout the seventeenth century, including the period of the Civil War and
Commonwealth, the English government was in almost continual debt.
Traditionally the deficit was financed by the unedifying blend of selling
land, confiscation, and the dishonouring of debts. The government also
borrowed heavily from City of London merchants. The goldsmiths were an
especially significant source of funds, and although this group had been
accepting deposits of cash as well as valuables since the early years of the
century, the turmoil of the Civil War made their safe-custody and payments
services increasingly popular amongst the merchants of London. (These
operations were subsequently a factor in the growth of private banking in
England.) During the Commonwealth, Edward Backwell, Robert Vyner, Isaac
Meynell and other goldsmiths were active in discounting and issuing bills of
exchange (including official payments). Backwell, described by Samuel Pepys as
'the great money man' and often claimed to be 'the father of English banking',
also acted as a contractor to the government by taking deposits from other
goldsmiths and lending on to the Treasury. Then, after the Restoration, the
goldsmith-bankers were tied more closely to financial policy, and their co-
operation was an important factor in the creation of a new form of English
public debt in the 1660s. The introduction of 'orders in payment' in 1665 made
it possible for government departments to issue assignable 'promises to pay'
to its creditors. The London goldsmiths accepted the orders on a large scale,
swelling their asset-holdings in the late 1660s.

Sovereign debt remained a high-risk operation for these private entrepreneurs,
however, and Backwell and the other leading goldsmith-bankers were undone by a
panic in the City in 1671. The government, unable to honour over �2 million
worth of orders, placed its 'Stop of the Exchequer' on any orders not
repayable from certain future revenue. This suspension of payments froze �l.3
million owing to the goldsmiths, many of whom were ruined, and Backwell
himself could only struggle on in a small way for another ten years.

The Crown's heavy-handed response in 1671 in effect ended the goldsmiths' role
in the fragile recovery of English public finance. Yet the State's
indebtedness continued to deepen, especially when the new government of
William III and Mary embarked on war with France in 1689. A more permanent,
institutional form of borrowing was badly needed if public confidence in the
government's debt was to be restored. The breakthrough, when it came, was by
an unusual route. William Paterson, a Scots entrepreneur, was one of a group
of 'projectors' who in the 1680s and 1690s were bombarding English investors
with schemes for new joint-stock enterprises, and an ambitious proposal of his
in 1694 won the support of Charles Montagu, the Chancellor of the Exchequer.
In return for a loan to the government Of �1.2 million at 8 per cent, the
subscribers were allowed to form a corporation under the title of 'The
Governor and Company of the Bank of England', with a minimum life of twelve
years. The Bank would have joint-stock status, with ownership in the hands of
private shareholders. The original loan, launched in June 1694, was fully
subscribed within twelve days and the 1,272 original subscribers were granted
their charter in July. The initial loan and additional borrowings through the
Bank enabled the Treasury to sustain the finance of the French war until the
Treaty of Rijswick in 1697.

The new Bank of England was not simply a loan agency for the government. It
was also prepared to redeem Exchequer orders in payment and it agreed that its
own 'sealed bills' or promissory notes could be issued by the Treasury to the
government's creditors. It handled the payment of the army in Flanders,
entered the foreign exchange and bullion market, opened accounts for private
customers (including the goldsmith-bankers of London), and accepted and paid
the bills of exchange of its customers. The issue of banknotes, though not
mentioned in the original legislation, almost immediately became a distinctive
feature of the new company.

Within five years of its foundation, the Bank's notes in circulation were
worth over �1.3 million and by 1720 the total approached �2.5 million. The
size and flexibility of the note-issue was unique for a single banking
institution.

The breadth of the Bank of England's operations owed much to the efficiency of
its management. From the outset the Governor and the Court of twenty-five
Directors were merchants with the highest level of reputation and experience.
Sir John Houblon, for example, who was the first Governor, came from a
merchant family specializing in trade with France and the Mediterranean, and
like seven of the other founding directors he was from a Huguenot background.
Their success in the Bank's first years won them the renewal of the
corporation's charter and, in 1708, the privilege of being the only banking
unit permitted to have more than six partners. These rewards gave to the Bank
an unchallenged position at the centre of English finance � a supremacy which
had the backing of government and of legislation. In return the English
government leaned heavily on the Bank in the early decades of the eighteenth
century. Between 1710 and 1714 the bank was commissioned to receive the
proceeds of government lotteries, and in 1717 it was given the management of
the 'consolidated' fund of long-term government debt. After the speculative
mania of the South Sea Bubble, leading to the collapse in stock of the
government-sponsored South Sea Company in 1720, it also played an essential
'rescue' role by buying �4.2 million of the collapsed South Sea stock. In this
guise the Bank was a key factor in the stabilization of public borrowing in
the remainder of the eighteenth century.

The formation of the Bank of Sweden and, more especially, the foundation of
the Bank of England had shown that institutional banks could survive the heavy
demands of leading nation-states. Serious efforts were made to follow their
example elsewhere in Europe. In France, at Louis XIV's death in 1715, the
State's indebtedness had reached nearly 3,000 million livres, dwarfing its
annual revenues of only 80 million livres. A systematic attempt to rein in the
debt was made by John Law, a Scottish exile advising the French regency. Law
keenly favoured institutional solutions � the Ferme Generale to collect
indirect taxes, the old-established Compagnie des Indes, reorganized as a
state monopoly for overseas trade, and the Banque Generale. The Banque, which
was founded as a private company in 1716, became a state monopoly under the
title of the Banque Royale two years later.

For the moment it appeared that Law had succeeded in building a unified
financial structure. However, one serious weakness remained. The Banque had
been issuing very large numbers of banknotes in an effort to revive the French
economy. Nearly a billion livres were issued in notes in 1719 and by October
1720 2.7 billion livres in notes issued by the Banque were in circulation.
This massive expansion of credit contributed to a sudden inflation and a rush
by investors to convert their holdings of government debt into shares in the
Compagnie des Indes. Paris was by now sharing the speculative mania which
engulfed London, Amsterdam and even Switzerland. In the spring Of 1720
investors throughout Europe were pouring funds into the English South Sea
Company but, when the 'Bubble' burst in August, French as well as English
stock prices were flattened. Holdings in the Compagnie des Indes became
practically worthless and on 1 November the notes of the Banque ceased to be
legal tender. Law was forced out of the country (he died in poverty in Venice
in 1729) and his Compagnie and Banque were both dissolved. Investments and
savings throughout France vanished as the government repudiated or converted
most of the outstanding debts, leaving behind an inheritance of hostility and
suspicion towards the centralization of banking and finance. Private banking
firms survived in this climate but the notion of institutional banking
withered. It was not until the formation of the Banque de France in 18oo that
Law's ambitions for a unified financial system wore to be fulfilled.

Elsewhere on the international financial scene, the development of state
banking institutions was patchy. In Germany Frederick the Great of Prussia
authorized a noteissuing bank, the Konigliche Giro- und Lehnbanco, in '1765
but its growth was restricted by Frederick's reluctance to deposit his own
treasury funds with the bank. Consequently the note-issue remained small and
was eventually suspended in 1806. In contrast, the Anspach-Bayreuth Bank
(established in 1780, the forerunner of the Bayerische Vereinsbank) acted as a
royal treasury as well as a credit institution. It survived the complex
transfer of Anspach-Bayreuth from Prussian to Bavarian sovereignty in 1805 to
become one of the leading banking operations in southern Germany.

Spanish efforts to create a national bank were less successful. The Bank of St
Charles was established in 1782, partly in support of Spain's role in the
American War of Independence. Promoted by the French entrepreneur Francois
Cabarrus, this experiment failed in 1808 when the bank could not redeem the
Spanish crown's large floating debt.

In America itself, the position was complicated both by the inborn distrust of
centralization and the lack of a standard currency. Under the Constitution Of
1789, however, the management of the currency was finally placed in the hands
of the United States Treasury, while the foundation of the Bank of the United
States two years later provided for the issue of dollar notes, the discount of
bills and the management of government debts. Although the Bank's charter was
not renewed in 1811, its brief career set a precedent for a national banking
institution over and above the individual States of the union.

The institutional approach to banking was not always in support of public
debt. An important exception to the general pattern was the Scottish banking
tradition. In 1695, immediately after the foundation of the Bank of England,
the Edinburgh-based Bank of Scotland was promoted as a jointstock corporation.
It was a national bank in the sense that its proprietors were required to be
naturalized Scots, but it differed from other public banks by being forbidden
to lend to the State. It was designed mainly for Scottish business and private
customers, and this principle was maintained after the Anglo-Scottish Act of
Union in 1707. A rival group of investors launched a similar jointstock
company, the Royal Bank of Scotland, in 1727. Like the Bank of Scotland, the
Royal Bank issued its own notes but its system of 'cash credits' (devised in
1728) was a vital step in the development of the modern bank overdraft. In the
absence of the monopoly legislation which ruled in England, a further joint-
stock concern began banking in 1746. This company, the British Linen Company
of Edinburgh, was based upon an earlier trading and industrial enterprise, but
its entry into banking in 1746 added competition as well as stability to the
Scottish banking scene.

Even before the foundation of the Bank of England in 1694 (and the consequent
creation of a more secure financial background for businesses and private
individuals), there was a recognizable tradition of private banking in
England. The goldsmith-bankers of London had provided safe custody and
accepted customers' deposits since the early seventeenth century. Customers
could use 'drawn notes' to authorize their goldsmith-bankers to make payments
from their accounts to third parties. The goldsmiths' own notes, carrying the
now familiar terminology of 'I promise to pay', emerged as a form of banking
currency in the London market. It was mainly the smaller firms, those not
embroiled in government finance, who survived the 1670S crisis (see P. 37),
and the unknown author of The Mystery of the New Fashioned Goldsmiths (1676)
describes them providing a variety of cashiering and exchange services. Many
of the longest-surviving London banks descended from this group � notably
Hoare's Bank (founded at the 'Golden Bottle' in Cheapside in 1673), Coutts
(originally established by John Campbell in 1692), and Child and Co (who began
banking in 1673 and are now part of the Royal Bank of Scotland). Over the next
century these firms and their contemporaries gradually dropped their goldsmith
associations and became banking specialists. By 1770 there were no less than
fifty private banks in London and at the end of the century the total had
increased to seventy. Some, like Martins (founded in 1712) and Glyns (1753),
were based primarily in the City of London money market, where they could
specialize in discounting and exchange. Others, like Coutts, Childs, and
Drummonds (founded in 1717) installed themselves in the West End to serve the
aristocracy and the politicians and officeholders of Westminster.

The goldsmiths had a significant and sometimes glamorous role in the history
of private banking. Equally if not more important, however, was the
'scrivener' tradition in English banking. Since the sixteenth century
scriveners had supplied a range of law services from handwriting and searches
of title to mortgage-broking and conveyancing. In the Elizabethan period they
were also receiving cash-deposits from provincial merchants, and by the
seventeenth century these 'money-scriveners' were using their expertise in
property to handle large and complex financial transactions. By the third
quarter of the century they had become a powerful influence on banking
development.

The firm of Clayton and Morris, scriveners of Old Jewry, was especially
prominent between its formation in 1658 and the 1690s. The business was
substantial. By the end of the firm's three-year account in 1677, for
instance, deposits exceeded �1.8 million. This was probably a larger scale of
operation than the business of the largest goldsmith-bankers who had been so
damaged by the Stop of the Exchequer in 1671. There is also evidence that it
was the scrivener-bankers rather than the goldsmiths who were in the van of
banking techniques in seventeenth-century England. The earliest surviving
cheque, dated 16 February 1659, was drawn on an account with 'Mr Morris & Mr
Clayton'. Distantly descended from early Italian examples of negotiable
payments (see p. 16), this form of cheque was a direct development of written
authorizations used in the English scrivener banks earlier in the 1650s. By
the 1660s Clayton and Morris were also issuing 'promise to pay' banknotes in
the same style as those of the London goldsmiths.

The firm of Clayton and Morris was not a permanent feature of the banking
scene: the business could not long survive the death of Sir Robert Clayton in
1707. Nevertheless, as Frank Melton has recently shown, the scrivener-bankers
had developed a network of deposits and mortgages which carried banking
techniques and routines outside London. At first provincial customers, mainly
landowners and cattle merchants, depended heavily upon their London banks for
deposits and loans. Before the middle decades of the eighteenth century they
had little choice; for, although Smith and Co of Nottingham (established in
1659) and the Gurneys of Norwich could handle bills of exchange and other
payments, they were very early and exceptional cases. Then from the middle of
the eighteenth century a new breed of 'country banks' gave England and Wales
the beginnings of a local banking system.

Like the scriveners, many country bankers entered the business through another
professional or business route. Some were merchants, manufacturers and
especially brewers who diversified into banking in order to sharpen up their
own methods of payments and receipts. In 1765, for example, the ironmaster
Samuel Lloyd and John Taylor, a button manufacturer, established a banking
firm in Birmingham (the ancestor of Lloyds Bank). Others, such as tax
receivers and the officials of canal companies and turnpikes, moved into
banking to deploy the funds entrusted to them � a perfectly legal operation at
that time, in which receivers and officials had the advantage of close contact
with the London market. In addition to scriveners, law attorneys were also
well placed to hold money for clients and eventually to act as lending
bankers.

>From this mixture of origins the country banks emerged as a distinctive
feature of the provincial scene in England and Wales. Numbering no more than a
dozen in the early eighteenth century, they proliferated in the second half of
the century to a total of 334 by 1797 and over 600 by 181o. Those in rural
areas usually limited their operations to receiving deposits and sending their
customers' bills to London banks (or agents). Those in the growing industrial
territories were more active in lending � either through advances or by
discounting bills; they also needed the help of London agents at times of
heavy demand. In most cases the country banks issued their own notes as a form
of local banking currency, although the industrial areas of Lancashire and the
West Riding of Yorkshire relied more upon bills and promissory notes for the
settlement of debts.

In Scotland also, the appearance of the first major banking institutions had
created a more fruitful climate for provincial banking. In the middle decades
of the eighteenth century private banks were formed in Glasgow, Aberdeen,
Dundee and Perth, despite the opposition of the joint-stock banks in
Edinburgh. A variation on the same theme was the Ayr Bank Of 1769, a joint-
stock concern which vigorously extended a network of branches in the principal
cities of Scotland. Within three years, however, the Ayr Bank's lending was
completely out of control and it failed in June 1772. Although in Edinburgh as
many as thirteen private bankers failed in the aftermath of this collapse, the
Scottish provincial banks survived and flourished, and by 1810 Scotland was
served by twenty-five such banks in addition to the three public banks of
Edinburgh.

The development of provincial banking in the eighteenth century was not
confined to the British Isles. Across the Atlantic, a provincial banking
tradition began to emerge after the American War of Independence. The States
of the union chartered their own banks while private banking firms issued
their own 'scrip money' notes for local circulation. The Bank of North
America, although chartered by the United States Congress, was essentially a
regional bank when it opened for business in 1782. Yet none of the overseas
examples were on the same scale or in the same numbers as the British country
banks. Towards the end of the eighteenth century England, Wales and Scotland
were still the only cases where deposit banking was a familiar part of the
community in small rural centres as well as in major towns and cities.

The banking and financial institutions of seventeenth century Europe had
introduced more system and more continuity into the ever-troublesome
management of public debt. As the eighteenth century reached its close,
however, banking business was facing a different order of need. The
revolutionary wars in America and France were again raising the stakes of
international conflict; the enlargement of the European empires was stretching
the boundaries of the international economy; and the steady spread of
industrialization and mechanization was introducing entirely new patterns of
demand for financial support. Banking, fast though it had developed in the
seventeenth and eighteenth centuries, could only meet these needs by adapting
its structure and techniques. To the still small banking industry, the
challenge was to serve a market which was larger and wealthier per capita,
more industrial in character, more international in its outlook and, not
least, better informed.

pps 31-53

Aloha, He'Ping,
Om, Shalom, Salaam.
Em Hotep, Peace Be,
Omnia Bona Bonis,
All My Relations.
Adieu, Adios, Aloha.
Amen.
Roads End
Kris

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