Banks



The Central Bank of Sweden, the world's first national bank, dates her origins back to 1656/1668. The Bank of England was founded in 1694. It was assigned the task to control the amount of money on the market; it issued paper money and kept gold and silver reserves as security. In the 1720es, John Law failed in his attempt to set up a national bank in France. Prussia, the Preussische Bank was established in 1765, the Seehandlung, founded in 1772 to enter in overseas trade, state-owned, over time turned into a state bank. The Central Bank of Spain (1856) dates her origin back to 1782. In

The National Bank of France was founded in 1800, of Denmark in 1813, of the Netherlands in 1814, of Finland in 1840, of Portugal in 1846, of Belgium in 1850, of Tuscany in 1857, of Saxony in 1865, of Italy in 1866/1893 (Banca Nazionale nel Regno d'Italia), of Switzerland as late as 1907, of Germany in 1910. Austria had a number of state banks, the first one established in 1816. Charged with the control of money supply, these banks had official character, and limits were set to them competing with private banks.

The early 19th century, with railway constructions and other costly enterprises, saw investments at a scale never seen before. Until far into the 18th century, the financial market focussed mainly on overseas trade; now, expanding domestic industries and the establishment of an infrastructure serving an industrializing society took a larger share of the available credit.

In the 19th century, most countries in Europe still were monarchies; the royal governments often in need of credit in order to pursue political projects. Here, the banks established by the Rothschild family served them, acquiring an immense wealth in the process. The Rothschild family (according to a recent book The Richest Dynasty in History) operated banking houses in Frankfurt, London, Paris, Vienna and Naples. The various branches of the family enterprise cooperated in financial projects. Because of their financial power and political connections, the family was in a position to influence policy, and on repeated occasions has used her influence to the preservation of peace in Europe.

While the aforelisted banks focussed on providing credit to and administrating the funds of royalty and big business, another form of bank appeared - the SAVINGS BANK (in German : Sparkasse). The first was the Parish bank of Ruthwell (Scotland). The purpose was to administrate the savings, petty by comparison, of simple people. Based on the success of such enterprises, later large banks were founded on floating moderately priced shares = Credit Mobilier in Paris 1852, the Creditanstalt in Austria.







EXTERNAL
FILES
European Association for Banking History
History of the Bank of England, from Bank of England
Global History of Currencies : Austria
History of the Central Bank of Sweden, from Riksbank
Article Sveriges Riksbank, from Wikipedia
Scottish Banking History, from Scotbanks
A Short History of British Banking, from RBS
Savings Banks History, from Savings Banks Museum
DOCUMENTS The Rothschild Archive
REFERENCE Frederic Morton, The Rothschilds. Portrait of a Dynasty, NY : Kodansha 1961
Carlo M. Cipolla (ed.), The Fontana Economic History of Europe, Vol.3 : the Industrial Revolution, Glasgow : William Collins & Sons (1973) 1978 [G]



This page is part of World History at KMLA
First posted on October 2nd 2003, last revised on April 17th 2006

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