In the reign of Alexander ,Severus the fiscal laws and system of the empire underwent a radical change, yet the evidences of rt., as re vealed by inscriptions recovered in recent times, are scattered over several centuries; chiefly the 3d, 4th and 5th. The public treasury and Im perial fisc caine to be identical; a change traced to Aurelian. The Lord Treasurer, Sacrarum Largitionum, managed all public funds; while the imperial demesnes and privy purse were committed to the Comes rerum privatarum, both of them being endowed with sacerdotal titles. (Bury, I, 44). The interdiction against the talcinF of interest for money which these changes involved began a new period in the history of banks. The capital of the empire had been transferred to Byzantium (Constanti nople), so that Europe, fortnerly within easy reach, was now far removed from the court. What the government denied, private interest afforded; the Jews braved its displeasure and its penalties by providing a means to relieve the necessities of the poor: a species of poverty banks, or lending houses, first mentioned by Prudentius, as having been established in Italy about A.D. 40D. For a period of two or three centuries during the Dark Ages these establish ments appear to have been the only means of procuring loans of money.
About the 8th century the poverty banks were. taken over by fraternities of monks and confirmed by the Popes as montes fietatis; the right to exact collateral security and to charge interest being affirmed by several pontiffs, es pecially Pius II and Sixtus IV. After the fall of Constantinople in 1204 the monks were superseded in this lucrative business by the Lombard goldsmiths and money changers, whose various names of Bardis, Corsini, etc, neither shielded them from popular aversion, nor prevented them from dnving a lucrative trade. So influential did they become, that in 1311 one of their number, Raoul the goldsmith, was ennobled by his patron, Louis X; the first instance of the sort known to history. In 1313 there was a aLombard)) bank at Delft, and in 1320 another one at (probably) Calais, which latter loaned 5,000 marks (about 16,000 gold dollars) to Edward III of England. The banks of Geneva, 1345, and of Florence, circ. 1350, were probably an evolution from the Lombard goldsmiths, just as the latter were evolved from the montes pietatis and these again from the poverty banlcs of the Jews.
For the first time in 400 years, a circum stance entirely overlooked in works of refer ence, Christian gold coins now began to be struck in Europe outside of Constantinople, where the privilege had ever been jealously guarded by the Basileus. This had much to do with the progress of banks, for it provided a more portable and reliable money than the heterogeneous and often debased and degraded silver coins of the various principalities and kingdoms which had been erected upon the ruins of the empire, The first Christian gold coins of western Europe were the augustals of Frederick II, 1225, followed by the ducats of Portugal, same year, the pavilions and agnels of Louis IX of France, the ducats of Florence and Genoa, 1253, and the sequins or ducats of Venice, 1276. Consult Del Mar,
Confining the term bank to its more modern sense, what may be regarded as one of the earliest, perhaps the earliest, Christian institu tion of this character, was the Bank of Barce lona, 1401. As the operations of this bank had
a bearing upon the affairs of America, they claim especial interest. "In Sin, by the ordinance of Valencia, made by King John, who conquered the kingdom of Aragon, it is ex pressly provided •that reals shall only be coined in Valencia and that the minters shall be supervised by two well-known citizens; so that no fraud shall be committed as to material or weight" (Grimaudet, (Law of Payment,' New York edition, p. 14). The coin referred to is the familiar Spanish real de plata, of eight to the dollar. This coin was lawful money •in the United States down to 1853 and till recently was known to New York tradesmen as a "shill ing' and throughout the Southern States and California, as the "bit.' The coinage super vision ordered by King John (father of Ferdi nand, in whose reign Columbus discovered America), was afterward extended to Barce lona, where it furnished the basis for the ex tensive dealings of its bank in the exchange of full-weighted reals and reals de a oche (dollar pieces of eight reels) for the heterogeneous coins which flowed from all parts of Europe into that great commercial emporium; among them the coinages of Moslem Spain (Granada).
From Barcelona King John's test of the coins, called in England "The Trial of the Pyx," was carried from Spain into the Spanish American mints of Mexico and Peru and adopted by the United States government from the period of its inception. This supervision and testing of the coins is still conducted in the American mints under a commission of civilians appointed by the Secretary of the Treasury. It constitutes the groundwork and basis of honest money and banking.
The Bank of Barcelona alsp received on de posit and disbursed the revenues, or part of them, of the four great ecclesiastico-military orders and kept the accounts of about a dozen other orders of knighthood, like those of Cala trava, Saint James, Golden Fleece, Saint George, etc., some of which were ecclesiastical and some merely chivalrous. The royal treasure, formerly deposited in the castle of Segovia, is believed to have been removed to the Bank of Barcelona, because the Contador General is known to have drawn some of his warrants for public expenses upon that institu doh. In 1480 Isabella, holding coast at Toledo, signed a decree Which greatly affected the bank To support the government of Castile Henry IV had issued certain cedulas or certificates of annuities assigned on the public rents, and these by purchase had become the property of the nobles, who in turn had borrowed money on them from the bank. Isabella's decree, de-< nouncing and annulling these certificates— vir tually an act of repudiation —was entrusted for execution to her confessor, Ferdinand. de Talavera,- who performed his task with such fidelity that it "saved' 30,000,000 maravedis annually to the Crown (Prescott). If the bank survived the depletion of its resources in 1480, it could scarcely have weathered the civil war of 1517-22, during which period of turbulence the bank, despairing of a return to peace and security, appears to have quietly discharged its obligations, wound up its affairs and honorably dissolved.