Between the Bank of Barcelona (barring the "Bank° of Saint George at Genoa, 1407), that is to say between 1401 and the formation of the Bank of Amsterdam, 1607, works of refer ence will be searched in vain for any notice of a public bank in Europe. The significant absence of a bank in any kingdom or principality of the civilized world for an interval of over 200 years, is not even commented upon. The so called Bank of Venice, which is assigned to the year 1157, was not a public bank until 1619, when it was reorganized as the Banco di Rialto which converted it into a public bank of del posit-and-withdrawal. Meanwhile the Bank of Venice was merely a Chamber of Loans (Camera degli Imprestigi) into which patriotic capital was invited to assist the government of Venice. Even had it been a public bank it was not in a position to exercise the proper func tions of a European bank, namely, the agglom eration of private capital, to be distributed in loans helpful to European commerce and enter prise. How could a Venetian bank promote or assist the trade of Spain, France, England, the Netherlands or Germany? It could not, and in fact it did not do anything of the sort. Be tween the dissolution of the Bank of Barce 4ona, rather between the date when its com mercial activities ceased„ about 1522, and the Bank of Amsterdam, 1607, and Hamburg, 1619, an entire century elapsed. What institution of security and commercial credit or convenience filled the void? This interval witnessed the greatest of all commercial events, the discovery, conquest and colonization of America, the abstraction and removal of its enormous treasures in gold and silver, their coinage into money, the opening to plunder and afterward to commerce of India, China and Japan, the consolidation of the German empire, the rise of prices and the progress of the Reformation. Where are the .institutions into whose hands these conquered treasures might be placed, to whom could the impatient European commerce of this period apply for assistance? There seems but one reply.
Charles I, King of Spain and sovereign of America, elected Emperor of Germany as Charles V, in 1519, having been assisted to this elevation by the banking house of the Fuggers of Augsburg, turned over to them the entire banlcing business of his extensive empire. He assigned (farmed) to them the monopoly of quicicsilver (Almaden mines of Spain), the Guadalcanal silver mines and virtual control of many of the mines in America. He transferred to them the vast accounts and balances of the military and episcopal orders. He even granted to them the royal and imperial prerogative of coinage (1534). They conducted the mints of Valencia, Augsburg, Weissenhom (Bavaria), and other places. They even were pnvileged to stamp their names and titles upon the golden florins, for example, Ant. Fugger D. in Weis senhors, 1530-60. For upwards of a century, such of the American treasure as escaped cap ture by the English, Dutch and French cruisers passed through their hands, leaving them a fortune estimated at 60,000,000 florins or ducats, say $150,000,000. They became bishops, barons, dukes, even princes, and their house survives to the present day. Such was the bank of the 16th century.
Beyond the jurisdiction of England, France, the Netherlands and some of the Italian repub lics, the sole assistance which commerce en joyed from the vast stores of the precious metals which flowed into Europe dunng this period came from or through the house of Fuggers. It was not until the reign of Charles II, 1665, some say Charles III, that Spain was enabled to establish a public bank for the con venience of the public: that of San Carlos.
Meanwhile the Inquisition, by burning or ban ishing the Moors and Jews, had so thoroughly destroyed her domesbc industry that it im parted to this liAtle Imown institution but a feeble existence. To American readers it is only known through the pages of Blanqui.
Mention has already been made of the banks of Atnsterdam and Hamburg. Between them came the Bank of Middleberg, 1616, and after them the banlcs of Rotterdam, 1635, and the Swedish Rilcsbank of 1656. All of these insti tutions were of Protestant origin, opposed to the Catholic house of Fugger, which after the Peace of Westphalia in 1648 lost much of its imperial support and influence.
These northern institutions becatne the effective promoters of that enormous expansion* of commerce, industry and the arts, which be stowed upon the 17th century the name of the Hakyon Age. They promoted and supported the English and Dutch East and West India companies, the African Company and the numerous other cosmopolitan enterprises of a marvelous period; and they imparted to the commerce of the British, French, Dutch and Scandinavian ports an impetus which they have ever since retained. Until 1656, when the Riksbank of Sweden issued circulating notes, their functions consisted ahnost solely of re ceiving funds on deposit for safety, and loaning them out upon commercial or governmental bills of exchange, promissory notes or bonds.. Some of them were endowed with special privi leges or monopolies, as the banlcs of Amster dam, England and France (Comptoir des Escomptes). All of them were of great service to commerce, indeed the Bank of Amsterdam went so far, in its secret loans to the Dutch East India Company, that it became insolvent about 1760 and was liquidated in 1819.
Meanwhile a new empire had arisen beyond the Atlantic, whose growing commerce de manded the convenience and assistance of pub lic commercial banks. (In 1652 the province of Massachusetts found it necessary (for it was no mere act of wantonness or of profit-seeking by the colony), to defy the Royal authority by erecting a Mmt and strildng Pine-Tree shillings. The origin of this silver is not known. In 1662 some of the silver smuggled out of Mexico or captured from the Spanish galleons, found its way to the Chesapealce and was coined in Maryland( These events presaged a bank. In 1680 a bank was established for the convenience of planters in South Carolina, which William Paterson, afterward promoter of the Bank of England, now fresh from the Darien colony on the Isthmus of Panama, is said to have investi gated. Five or six years later, 1686, John BlacInvell and his coadjutors united to estab lish a bank of issue in Boston, also in defiance of British authority; and on 3 Feb. 1690, the colony of Massachusetts issued its own bills of credit. It has been suggested that these bills were to pay off the soldiers in the Phips cam paign to Quebec, whereas in fact the notes were issued before the Phips expedition was resolved upon. One of these notes is still in existence. (A copy will be found in Del Mar's 'History of Money in America,' p. 79). On 2 July 1692, the colonial government of Massachusetts made these notes legal tenders for the payment of all debts and obligations, except those which had been contracted in special money's. The amount of the notes outstanding was between L30,000 and f40,000.