HISTORICAL SKETCH OF THE BANKING METHODS OF THE STATE OF NEW YORK, INCLUDING THOSE EMPLOYED BY BANKS, BANKING ASSOCIATIONS, INDIVIDUAL BANKERS, SAVINGS INSTITUTIONS AND OTHER MONEYED CORPORATIONS. BANKING METHODS. ARTICLE I. BANKS, BANKING ASSOCIATIONS AND INDIVIDUAL BANKERS. ONE of the most remarkable of phenomena is the fact that the first bank ever established won a success unequalled in later times. The Bank of Venice had its origin in 1171, from a forced public loan raised to fit out a fleet, and is the first appearance of a public funded debt. Every citizen was obliged to contribute the one-hundredth part of his possessions. The persons assessed were then organized as a chamber of loans for their common protection, and for the receipt of the yearly interest of four per centum. Subsequently, its creditors were permitted to transfer their claims to others, in whole or in part. The government, finding that these transfers were in demand, reduced the rates of interest until no interest was paid. Afterward, it sold cash inscriptions of credits on its books; and while these inscriptions cost gold, they were not convertible into gold. Its issues were government paper, and the business was carried on solely for the benefit of the public treasury. This institution was destroyed by the invasion of the French in 1797. For two hundred years the Bank of Venice stood alone. The magistrates of Barcelona created the Table of Exchange in that city, which was a bank of exchange and deposit. Six years after, the Bank of Genoa came into existence under the title of the Chamber of St. George. It was controlled by eight protectors, elected yearly by the stockholders and other creditors. The Bank of Amsterdam was founded January 31, 1609.3 The commerce of this city involved such a variety of transactions that the 1 Paine's Mass. Paper Currency, 50. 2 Moulton's Science of Money, 66. Goddard's Hist. of Banking Inst., 11. expediency of regulating them became evident, and the magistrates, under the authority of the United Provinces, declared themselves the perpetual cashiers of the inhabitants, and declared that all payments above 600 gilders, and bills of exchange should be made in the bank. Merchants were, therefore, obliged to open accounts with it, and the beneficial effects of this institution in Holland were immediately recognized, and the bank money at once commanded a premium. Before the creation of the Bank of England there were but four large banks in Europe. Its charter was granted by William and Mary, July 27, 1694, for the period of twelve years, determinable on a year's notice; the original capital subscribed by the proprietors was £1,200,000 in consideration of loaning the government the same sum for which they received a yearly interest of eight per centum. The Bank of Scotland dates from 1695; the Bank of Ireland was not established until 1783. BANK OF NORTH AMERICA. The incorporation, in the year 1781, of the Bank of North America, the first duly organized bank in the United States, was chiefly due to the efforts of Robert Morris, a man of distinguished financial ability, and a representative of Pennsylvania in the Continental Congress. The bulk of the circulation for some time previous, consisted of bills of credit, which Congress and several of the States were obliged to issue, in order to obtain supplies for the support of the army. The credit of both Congress and the States having been almost entirely exhausted, the circulating medium became so depreciated in value that it was impossible to secure the necessaries of life for the soldiers. They became sorely dissatisfied, and it was greatly feared that the cause for which our people had suffered must ultimately be abandoned. The substantial aid furnished by this bank to the financial department of the government not only inspired our leaders with confidence, and infused fresh vigor into our troops, but also proved an able auxiliary in the expulsion of the British from our shores and 4 The Charter of the Bank of England contained the following noticeable provisions: PROHIBITION AGAINST TRADING.-"And to the intent that their Majesties' subjects may not be oppressed by the said corporation, by their monopolizing or engrossing any sort of goods, wares or merchandises - Be it further declared and - |