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PREFACE.

THE public appreciation of the late Mr. Gilbart's works on banking has been testified by their frequent reissues. Of his various publications, the "History and Principles of Banking," and the "Practical Treatise on Banking," have been the most popular, and still rank as standard text-books. In the present volume they are combined, with the double view of preserving the more valuable characteristics of both, and, by lessening the cost, of bringing them within the reach of the

many.

Entrusted by the publishers with the preparation of this combined edition, I have laboured to do them justice, if not intelligently, at least assiduously. In one respect I have been singularly fortunate. Wheresoever, or to whomsoever, I have applied for information-to the Bank of England, the Clearing House, Joint-Stock Banks, Country Banks-to directors, managers, stock-brokers, clerks-I have been received courteously, answered unreservedly (confidential matters of course excepted), and have been afforded the information I sought, rather as if I were conferring a favour on my informants, than as if I were the party benefited and honoured. One honourable

peculiarity, common to all, especially struck me, namely, the ready frankness with which each confessed his inability to enlighten me on matters unconnected with his own department.

Would I were at liberty to give the names of these highly informed and cultivated gentlemen to whom I owe so much, but to whom I must only return, generally, my sincere and grateful thanks. Yet, however pleasurable this would be to my sense of obligation, I doubt its turning to my editorial repute. Their names, like "the King's," would, indeed, be "a tower of strength;" but, on the credit of them, it would naturally be presumed that the following pages were free from errors; an exemption which, from the very nature of the subject matter, not to speak of my own "shortcomings," is impossible.

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They who are familiar with Mr. Gilbart's writings will see at a glance that numerous alterations have been made in the present edition. Almost the entire section on "Banking Calculations" has been expunged, many "tables" omitted, the reports of the joint-stock banks" left out, the excellent advice (which would now be considered "old-fashioned ") contained in the section, “The Duties of Public Companies," much abridged, and forms of letters, guarantee bonds, prospectuses, legal undertakings, &c. &c., ruthlessly excised.

Not one omission of the kind, however, has been made unauthorized by the best authorities-bankers themselves.

En revanche, if, under advice, I have omitted much, I have added not a little; to wit, an account of the panics of 1857 and 1866, a description of the present admirable system pursued at the Clearing House, the existing rules for regulating the Scotch exchanges, and many minutiæ respecting the Bank of England, and the Scotch and Irish banks. Some of these

time a law was made that all foreign bills of exchange should be paid in bank money. This law raised the value of bills on Holland in foreign countries, and compelled every merchant to keep an account at the bank, in order that he might at all times have legal money to pay his foreign bills. The premium (called the Agio) on bank money was regulated by the market price of gold, and was subject to considerable fluctuations. To prevent the gambling to which these fluctuations gave rise, the bank at length determined to sell bank money for currency at five per cent. agio, and to buy it again at four per cent. From this and other sources of profit the bank is supposed to have gained a considerable revenue. It was the entire property of the city. of Amsterdam, and was placed under the direction of four burgomasters, who were changed every year.*

The bank of Amsterdam was the model on which were formed most of the European banks now in existence; but they have varied very considerably from each other, according to the circumstances of the respective countries in which they have been established.

SECTION II.

THE RISE OF BANKING IN ENGLAND.

THE exchanging of money; the lending of money; the borrowing of money; the transmitting of money, are the four principal branches of the business of modern banking, and in most countries they seem to have taken their rise in the order in which they are here named.

MONEY-CHANGING.

For several centuries the only coin current in England was made of silver, and the highest denomination was the silver penny. This coin contained about half as much silver as one of our sixpences. There were also silver half-pence and silver farthings, and frequently the silver pennies were cut into halves and quarters to serve the purpose of half-pence and farthings, until laws were made to prohibit the practice. Copper was not coined in England until the year 1609, and then the small

* Adam Smith's Wealth of Nations, vol. ii. p. 220.

Edition 1812.

granted by the Bank of England," p. 92-are corrected to the present time, and that the further history is continued in the "Practice of Banking."

A summary or abstract of the principal Banking Acts, not detailed in the body of the work, as well as some changes which have occurred since the text has been printed, will be found in the Appendix.

It only remains for me to solicit that indulgence from reader and critic, which no one can more unaffectedly feel that he needs than

THE EDITOR.

And whereas ourself and divers of our royal predecessors have, for some time past, tolerated a promiscuous kind of liberty to all, but especially to some of the mystery and trade of goldsmiths in London and elsewhere, not only to make the said exchanges, but to buy and sell all manner of bullion, and from thence some of them have grown to that licentiousness, that they have for divers years presumed, for their private gain, to sort and weigh all sorts of money current within our realm, to the end to cull out the old and new moneys, which, either by not wearing or by any other accident, are weightier than the rest, which weightiest moneys have not only been molten down for the making of plate, &c., but even traded in and sold to merchant-strangers, &c., who have exported the same, whereby the consumption of coins has been greatly occasioned, as also the raising of the silver even of our own moneys to a rate above what they are truly current for, by reason whereof no silver can be brought up to our mint but to the loss of the bringers, &c.-For the reforming of all which abuses we have, by the advice of our Privy Council, determined to assume our said right, for our own profit and the good of the realm, and for this end we do now appoint Henry Earl of Holland and his deputies, to have the office of our changes, exchanges, and out-changes whatsoever, in England, Wales, and Ireland.-And we do hereby strictly charge and command that no goldsmith nor other person whatsoever, other than the said Earl of Holland, do presume to change, &c."*

As this measure occasioned some dissatisfaction, the king authorized, in the following year, the publication of a pamphlet, entitled "Cambium Regis, or the Office of his Majesty's Exchanger Royal." In this pamphlet it was attempted to be shown :

"That the prerogative of exchange of bullion for coin has always been a flower of the Crown, of which instances are quoted from the time of King Henry I downwards. That King John farmed out that office for no smaller a sum than five thousand marks-that the place or office where the exchange was made in his reign was near St. Paul's Cathedral in London, and gave name to the street still called the Old 'Change—that in succeeding reigns there were several other places for those exchanges besides London-that this method continued to Henry the Eighth's time, who suffered his coin to be so far debased that no regular exchange could be made that the same confusion made way for the London goldsmiths to leave off their proper trade of goldsmithrie, i. e., the working and selling of new gold and silver plate, and manufacture, the sole intents of all their charters, and to turn exchangers of plate and foreign coins for our English coins, although they had no right to buy any gold or silver for any other purpose than for their manufacture aforesaid, neither had any other person but those substituted by the Crown a right to buy the same. The king, therefore, has now resumed this office, not merely to keep up his right so to do, but likewise to prevent those trafficking goldsmiths from culling and sorting all the heavy coin, and selling the same to the mint of Holland, * Anderson's History of Commerce, vol. ii. page 324

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