Oct 08
20
The History Of Banking
Interesting article on the economics, banking, lending – how it all came about…
Petty
showed that wealth is a function not only of how much money is
accumulated, but of the velocity with which the money is moved around.
This led to the realization that money, like information but unlike
material objects, can be made to exist in more than one place at a
single time.
An
early embodiment of this principle, preceding the Bank of England by
more than five hundred years, were Exchequer tallies—notched wooden
sticks issued as receipts for money deposited with the Exchequer for
the use of the king. “As a financial instrument and evidence it was at
once adaptable, light in weight and small in size, easy to understand
and practically incapable of fraud,” explained historian Hilary
Jenkinson in 1911. “By the middle of the twelfth century, there was a
well-organized and well-understood system of tally cutting at the
Exchequer… and the conventions remained unaltered and in continuous
use from that time down to the nineteenth century.”