© Roy Davies & Glyn Davies, 1996 & 1999.
Based on the book: A History of Money from Ancient Times to the Present Day by Glyn Davies, rev. ed. Cardiff: University of Wales Press, 1996. 716p. ISBN 0 7083 1351 5. (Page numbers in the 3rd edition published in 2002 may be slightly different).
1749-1751 | Pelham reduces the burden of the British national debt |
---|---|
Henry Pelham, the British prime minister, takes advantage of low market rates
of interest to reduce interest payments on the national debt from 4% to
3½% in 1749 and 3% in 1750, and replaces a whole series of annuities by
a single 3% consolidated stock or consols in 1751.
p 269-270 |
|
c. 1750- | The Industrial Revolution in Britain |
In the mid-eighteenth century, at the start of the Industrial Revolution there
are barely a dozen banking houses in England and Wales outside the London area.
p 285 |
|
1752 | Britain forbids New England colonies from issuing new bills of credit |
In addition, Parliament insists that all outstanding issues be promptly
redeemed at maturity.
p 462 |
|
1759 | General Wolfe captures Quebec |
During his campaign he complains about being hampered by lack of funds.
Similarly inflation is blamed for the lack of funds which led to the defeat of
General Braddock in 1755. Consequently the British government decides to
increase taxation in America, thus spurring the Revolution.
p 459-460 |
|
1760 | Wampum factory opened in New Jersey |
Demand for wampum as currency, and later ornament, remains strong. In the
factory steel drills are used to make the holes that are used for stringing the
shells together. This increases output of wampum enormously causing inflation.
The factory remains in production for 100 years.
p 39-40,458,640 |
|
1762 | Barings Bank founded |
When Barings goes bankrupt in 1995 it is Britain's oldest merchant bank.
p 346 |
|
1764 | Britain forbids all its American colonies to issue paper money as legal tender |
This punishes the colonies that had been careful not to over-issue paper money
as well as those that had been irresponsible. The only exception is for
strictly military purposes. "No law ... could be more equitable", wrote Adam
Smith, "than the act of parliament so unjustly complained of in the colonies."
(p 348 of the Wealth of Nations). Adam Smith was in favour of paper
money but against it having the status of legal tender.
p 463 |
|
1765 | Royal Giro and Loan Bank founded by Frederick the Great |
This is Germany's first note issuing bank. It later becomes the Bank of Prussia
and later still, the Reichsbank.
p 566 |
|
1766 | Benjamin Franklin fails to persuade British parliament to allow use of paper money in America |
While in London Franklin tries unsuccessfully to persuade Parliament of the
case for a general issue of colonial paper money.
p 461-462 |
|
1768 | Russia's first two public banks established |
They are created by Catherine the Great to finance Russia's war with the
Ottoman Empire (Turkey).
p 553 |
|
1770 | London Clearing House created |
The clearing house is set up by private bankers. Joint stock banks, country
banks, and the Bank of England are not admitted until many years later.
p 321-322 |
|
1770 | Rhode Island's paper money rendered worthless by hyperinflation |
Many of the British colonies in North America have over-issued notes causing
inflation but Rhode Island is the worst.
p 461 |
|
1771 | The first of the German Landschaften created in Silesia |
The Landschaften are state cooperatives which grant mortgages, and other credit
based on land, for the improvement of agriculture. Other Landschaften are
established in the 1770s and 1780s.
p 566 |
|
1772 | Scotland has a nationwide banking network |
By this time 31 banks are operating in Scotland with branches and agencies
covering most of the country. Thus Scotland is the first country in the world
to establish an almost nationwide system of branch banking.
p 276 |
|
1772 | Scottish banking crisis |
The Ayr Bank, which rashly issued large quantities of notes backed with the
wealth, based on land, of its owners, collapses along with 13 private bankers.
This confirms the more conservative practices of the older Scottish banks.
p 277-278 |
|
1775 | First British building society formed |
Richard Ketley, an inn proprietor in Birmingham, and a group of his customers
and friends form a society for saving money for building and purchasing houses
for their own occupation.
p 326 |
|
1775-1783 | The American Revolution or War of Independence |
The American Congress, and individual states. finance their war effort
overwhelmingly by printing money. This eventually leads to hyperinflation
rendering the continentals worthless - but the Revolution is successful.
p 464-465 |
|
1776 | Adam Smith defends paper money |
In his Wealth of Nations he draws attention to the benefits of paper
money in stimulating business both in Scotland and in the American colonies.
p 463 |
|
1776-1793 | Caisse d'Escompte, France's second public note-issuing bank, founded |
This is the first to be established in Paris since the failure of John Law's
venture. After 10 successful years it starts to grant too many loans to the
government, accompanied by excessive note issues and is forced into
liquidation.
p 555 |
|
1778 | Savings bank established in Hamburg |
This is one of the earliest in Europe and gives rise to a handful of similar
banks in north Germany by the end of the eighteenth century.
p 333,570 |
|
c. 1780-1810 | Rapid spread of country banking in England and Wales |
By 1810 the total number of licensed and unlicensed banks is probably over 800.
In most cases their founders have strong ties with particular industries or
trades and the banks meet the need of small workshops, mines etc. for working
capital. Without these banks the Industrial Revolution would have been
strangled in its infancy.
p 286-291 |
|
1780 | Bank of Pennsylvania founded |
This is the first American bank to be established since the declaration of
independence from Britain. It is basically a temporary means of raising funds
for the American army which is in a desperate financial situation.
p 469 |
|
1782 | Bank of North America begins operations |
It was granted a charter by Congress the previous year. It fulfils a wide range
of banking functions and is a great commercial success.
p 469 |
|
1783 | Unpaid soldiers prevented from looting the Bank of North America |
This stimulates opposition to the bank, as much of the public sympathises with
the soldiers, and the legality of the bank is later challenged by
Pennsylvania's representatives.
p 471 |
|
1783 | Act for the abolition of the British Treasury Tallies |
The act lays down that the wooden tallies are to be abolished on the death of
the last of the Exchequer Chamberlains operating the system.
p 663 |
|
1784 | Bank of New York and Bank of Massachusetts both open |
The Bank of New York is the oldest existing US bank (at the time of writing in
1996)
p 469 |
|
1785 | Bank of America's Congressional charter is revoked |
However the bank subsequently acquires a new charter from the state government
of Delaware.
p 471 |
|
1786-1787 | Shay's Rebellion in Massachusetts |
Captain Shay leads a rebel force of debtors, disaffected farmers and
ex-soldiers to try and secure debt relief, issues of paper money, and other
reforms. The rebellion is put down.
p 466 |
|
1786 | US Confederation Congress passes the Mint Act |
The intention is to meet a currency shortage - but only a few tons of copper
coins are minted.
p 467 |
|
1787-1817 | Privately-issued tokens become common in Britain |
By the end of the 18th century there is a severe shortage of copper and silver
coins in Britain so that many firms have difficulty in obtaining enough
currency to pay wages. This leads to a growth in payments in kind, use of
foreign coins, and unofficial tokens. The token manufactures greatly expand the
amount of currency available.
p 292-296 |
|
1789 | The French Revolution |
The revolutionary government seizes church lands and using them as security
issues assignats, bonds carry 5% interest. However the interest is soon
abandoned and the assignats become simply inconvertible, state-issued paper
money notes.
p 555 |
|
1789 | US Constitution gives Congress power over money creation |
The States are not allowed to coin money, issue bills of credit or make
anything except gold and silver legal tender.
p 466 |
|
1790 | Schaaffenhausen founded in Cologne |
Later this private bank becomes Germany's first joint-stock bank in 1848.
p 566 |
|
1791 | Bank of the United States receives a 21 year charter |
Because of opposition to the bank and fears that it would contravene the
Constitution, Washington is going to use his veto but is persuaded not to by
Alexander Hamilton.
p 472 |
|
1792-1815 | French Revolutionary and Napoleonic Wars |
The pressures of war cause many changes in the financial systems of both France
and Britain.
p 297-298,556 |
|
1792 | US Coinage Act |
The Dollar is adopted as the unit of account, based on a bimetallic standard,
subdivided into 100 cents. Foreign coins are supposed to lose their status as
legal tender within 3 years of the US coins coming into circulation.
p 467-468 |
|
1793-1801 | Britain sends more than £15 million to its allies |
This is to support them in the war against France.
p 297 |
|
1793 | The Bank Indemnity Act |
This act gives the directors of the Bank of England legal immunity for loans to
the government. This enables the British government to borrow much larger sums
for the war against France.
p 297-298 |
|
1793 | Friendly Societies Act |
Societies for encouraging saving by the poor are made exempt from the
provisions of the Bubble Act. The importance of the protection given by the
Friendly Societies Act increases after the passage of the Anti-Combination Acts
of 1799 and 1800 which are intended to prevent the development of subversive
movements in Britain inspired by the French Revolution.
p 322-323 |
|
1794 | US Mint Starts Operations |
The Mint in Philadelphia is the first purpose-built structure authorized by the
United States.
p 467 |
|
1795 | Hyperinflation in France |
The total nominal value of the assignats in circulation reaches 20 billion
livres. Riots in Paris pave the way for the rise of Napoleon.
p 556 |
|
1796 | Caisse des Comptes Courants founded |
This short-lived bank is absorbed by the Bank of France in 1800.
p 555 |
|
1796 | France replaces the assignats by a gold-based currency |
This has the effect of drawing bullion back from Britain.
p 298 |
|
1797 | Matthew Boulton given contract for minting copper coins |
Because tokens had become common the British government decides that the free
market could probably supply copper currency better than the Royal Mint. The
initial contract is for 50 tons of two-penny and one-penny pieces. Boulton's
partnership with James Watt results in the use of steam-powered machinery for
producing 4,200 tons of copper coins eventually.
p 293-294 |
|
1797 | Bank of England notes are made inconvertible |
The provisions of the Bank Restriction Act are initially expected to be of very
short duration but it is 24 years before convertibility is restored.
p 298 |
|
1797 | Spanish dollars are overstamped for circulation in Britain |
As a result of a desperate shortage of silver coins the Bank of England issues
altered foreign coins from its reserves. Half a million pounds worth of Spanish
dollars issued by King Charles IV are overstamped with a small engraving of
George III. However the issue fails because overstamping is also applied
unofficially to the plentiful supplies of light or base Spanish dollars.
p 294 |
|
1797 | US extends legal tender status to Spanish dollars indefinitely |
Because of a slight over-valuation of silver little gold is brought to the
Mint. Also users hold on to the new silver coins preferring to pass on the
older, duller Spanish ones. Consequently there is a shortage of both US gold
and silver coins.
p 468 |
|
1797 | Caisse d'Escompte founded |
This bank is absorbed by the Bank of France in 1803.
p 555 |
|
1798 | The Rothschilds expand into Britain |
The Rothschilds banking house originated in medieval Frankfurt on Main. In 1798
Nathan Rothschild is sent to Manchester to deal in the cotton industry. His
banking operations grow rapidly during the Napoleonic Wars, making full use of
his family's international network of couriers.
p 347 |
|
1799 | William Pitt introduces income tax |
This new tax raises considerable sums. During the war the British prime
minister also increases revenue by broadening the range of indirect taxes as
much as possible.
p 298 |
|
c. 1799 | Use of tokens, foreign coins etc. in Britain probably exceeds that of official coins |
By the turn of the century the total supply and velocity of circulation of
tokens, foreign coins, and other substitutes probably exceeds that of official
coins of the realm. Some of the chief engravers at the Royal Mint make a good
profit from selling new designs (not the official ones) to the token
manufacturers.
p 293 |
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