6 Conservative.
IIAXKS AX1) HANMCINR.
( Written for TilK CONPBHVATIVK by John W.
Steinhnrt , cnshior of the Otoc County Na-
tionnl Bank of Nebra lta City ) .
The word "bank" is supposed to be
derived from the Italian word "bunco"
for "bench , " the Lombard Jews having
benches in the market place where they
exchanged money and bills. When a
banker failed , his bench was broken by
the people and he was called bankrupt.
A banker , says Gilbart , "is a dealer in
capital , or more properly , a dealer in
money. " He is an intermediate party
between the borrower and the lender.
The difference between the rate received
by the banker for the use of money
loaned by him and the rate he has to pay
for it is his profit. In saying a dealer in
"money" a broad definition is given to
money. It does not mean what is act
ually called money , that is , what is is
sued by the government , or the banks ,
but the money also that is made from
day to day serving the purpose for
which it was created and then passing
away. It is created by the banker in
his drafts and bills of exchange , the
shipper , the manufacturer and the mer
chants by their sight drafts , acceptances
and checks ; thus my meaning is to include
everything that does the work of money ,
be it coin , banknote , draft , bill of ex
change or checks. All of which except
coin are titles to property.
Banks must have an origin. They are
not creatures of instantaneous growth ,
neither schemes of the rich to oppress
the poor , as was largely preached in our
past campaign. They are surely born of
necessity and it may be interesting to go
backward and trace the process from its
early crude beginning to its present
almost perfect condition.
The middle ages wore commercially
dead. Feudalism was the only form of
government , the isolated group was its
main feature and carried out to its ful
lest extent , little intercourse was al
lowed or desired. Such a condition
would not call forth any plans for the
exchange of products. Gradually as the
system died away , gradually did the
freer exchange of products occur first
between landed estates , then neighbor
ing towns and cities , later on between
different countries.
At this time the Jews were the ostra
cised people. They had no standing
with any nation in Europe and it was
but natural with rho hands of all against
them , that they should look to them
selves for help and support , and band
themselves together for survival against
the universal fight against them.
The force of circumstances made
them also the first money loaners. The
Christian church forbade the taking of
interest on a loan of money. The Jew
ish scripture forbade the taking of in
terest from a Jew , but did not forbid
taking interest from a Gentile , so in a
short time there grow up an extensive
system of money loaning by the Jew to
: ho Gentile , and thus we trace to the
Tew the beginning of the modern sys
tem of credit , and banking. The course
) f business at this time was from the
East to the West , from Italy to Gorman
owns , to Holland and England. Mer
chants found it much safer to send their
payments by letter of credit than by the
Tansmission of actual money. The first
letter of credit was merely a request for
myment from one friend to another ,
[ finally , with increased business , regular
systems wore inaugurated as early as
A. D. 808. Lombard Jews settled in
Lombard street , London , where many
jankers still have their place of busi-
icss.
The orusado was the cause of a great
development of business of the East
with the West. The crusader found
the Saracen was not the brute he imag
ined. He found much to learn. He
purchased of his goods and products
and in turn sold him the products of the
West ; this interchange made great de
velopments in the system of commercial
credits. With the cutting off of the
: rade of the East and the discovery of
the Now Worldwe find business drifting
into Spain , Holland and finally England.
The earliest public bank in Europe-
was that founded in Venice in 1171.
When first founded it was merely a
transfer office. The state was forced to
make a levy on its citizens , every citi
zen contributing a hundredth part of
Iris possessions and receiving interest at
5 per cent thereon. This transfer office
attended to the recording of said loans ,
assigning and paying interest on the
same. Gradually , however , it drifted
into the business of receiving the coins
of the government and issuing certifi
cates or receipts for the same , the } ' pass
ing at par and ofttimes at a premium.
This bank continued in existence until
the invasion of France in 1797. Flor
ence , Italy , was prominent in banking
as early as the twelfth century , at one
time having over SO private bankers , but
not a public bank.
The first public bank in Holland was
organi'/ed in Amsterdam in 1G07. At
this time Holland had the trade supre
macy of the world. All kinds of coin
wore in circulation and the merchants
were greatly handicapped , as also under
great tribute to the money changer ; so
the Bank of Amsterdam was organized
by the city to correct this evil. Al
merchants wore obliged to keep ai
account with the banks. It received
coins from the depositors giving
them credit at their bullion value. It
kept the coins in their vaults issuing
depositors' certificates of deposit , whicl
certificates passed current.
A peculiar feature of this bank was
that it kept all money received , being
merely a bank of deposit ; such a thing
as loaning its funds not occurring to
them.
The dates of the starting of state am
government banks are almost a mile
tone along the road of time , marking
he steady and sure advance of civiliz-
ition. First in the East , Venice , 1171 ;
Geneva , 1845 ; Barcelona , 1401 ; Genoa ,
407 ; Amsterdam , 1007 ; Hamburg , 1(519 ( ;
Rotterdam , Ii3o ( ; Stockholm , 1088 ;
Bank of England , 1094 ; Scotland , 1G95 ;
Copenhagen , 1730 ; Berlin , 1705 ; United
States , 1780 ; St. Petersburg , 1780 ; Iro-
and , 1783 ; Franco , 1800.
How they mark progress in com-
nerce and civilization ! England took
ts place in line in 1(594. ( Previous to
hat time , banking was carried on by
, ho Jews and goldsmiths. The gold
smiths carried on business on nmch
nero liberal lines than the Jews , and
their now business was severely attacked
by their competitors. The following
massage will show the feeling towards
hem.
"The goldsmiths received the money ,
loaned the same at low rates of inter
est and made serious inroads in the bus
iness of the Jews. They issued promis
sory notes , payable on demand , or at
certain dates , and they passed current
in trade , they working up to the present
system of banknotes.
"Tho goldsmiths deposited their sur
plus funds in the mint at the Royal
Tower until Charles I seized the
vmount , some 30,000. This act almost
wiped them out , but later on they again
gathered strength , depositing their
funds this time with the Royal Ex
chequer , and in 1(572 , Charles II being
in want of money , seized the deposits ,
some 1(500,000 and never , until much
later , repaying any of the amount , the
amount that was paid being the first of
the present debt of England. This last
"forced" loan put an end to the gold
smiths' banking. " *
At this time Holland was the commer
cial nation of the world , and England
was planning in many ways to wrest
the supremacy from her. Many argu
ments were advanced for a bank , show
ing how Holland prospered under one ,
and how England was handicapped.
This agitation was continued for years.
To Win. Paterson , a Scotchman , edu
cated for the ministry , must bo given
the credit for the plan of the Bank
of England. It was founded in 1G94 ;
at , this time England was in sore
financial straits ; was much distres
sed for money ; was paying interest
at from 20 to 40 per cent and Paterson
conceived the idea of loaning the gov
ernment 1,200,000. Thus the Bank of
England was organized ; for England's
need of money , as we will see later on ,
was the prime factor in the organiza
tion of the national bank system. Eng
land paid the bank 8 per cent on the
1,200,000 and 4,000 a year as reim
bursement of the expense of handling
the debt , the payment in all being 100-
000. Such was the start of the Bank of
England , today the most extensive
* Seu page 21 "Bank of England. "
