A Comparative Chronology of Money

Monetary History from Ancient Times to the Present Day

1830 - 1859

© Roy Davies & Glyn Davies, 1996 & 1999.

Based on the book: A History of Money from Ancient Times to the Present Day by Glyn Davies, rev. ed. Cardiff: University of Wales Press, 1996. 716p. ISBN 0 7083 1351 5. (Page numbers in the 3rd edition published in 2002 may be slightly different).

c. 1800-1860 Five hundred fold depreciation of the cowrie in Uganda
When cowrie shells are first introduced to Uganda at the end of the eighteenth century two are sufficient to purchase a woman. Thereafter the wholesale importation of cowries causes inflation with the result that by 1860 one thousand cowries are needed for such a purchase.

p 35,640

1832 Capital punishment for forging banknotes abolished in Britain
The maximum penalty for forgery is reduced from death to transportation for life (e.g. exile to Australia).

p 307-308

1832 President Jackson vetoes early renewal of the Second Bank's charter
In the presidential election the same year Jackson defeats Henry Clay, a supporter of the Second Bank. The result makes the Bank's demise certain.

p 477

1833-1834 Robert Owen's trade unions issue Labour Notes in Britain
The National Labour Exchange created by Robert Owen and his followers issues paper money in the form of labour notes to the value of one, two or five hours redeemable at designated stores but the experiment comes to an end with the failure of the Grand National Trades Union.

p 322,324

1833 Bank of England notes are made legal tender in England and Wales
The Bank Charter Act does this in order to discourage other banks from requesting that Bank of England notes be exchanged for gold at the hint of trouble. Bills of exchange up to 3 months are removed from the ambit of the usury laws by the same act.

p 309,310

1833 Jackson removes US government deposits from the Second Bank
Instead the deposits are placed in selected State Banks which come to be known as pet banks.

p 477

1834 Houses of Parliament destroyed by burning tallies
After the death of the last Exchequer Chamberlain in 1826 the redundant tallies are stored in the House of Commons. In 1834 to save space and economize on fuel the tallies are thrown into the heating stoves but they burn so fiercely that the fire spreads and destroys the Houses of Parliament.

p 663

1834 The Zollverein of the German States
A customs union is formed as a first step in unifying the currencies, weights and measures of the previously independent 39 German states.

p 443,566-567

1834 US Coinage Act
This makes a slight reduction in the value of silver relative to gold in order to encourage more gold to be brought to the mint. However, it hastens the disappearance of much of the remaining silver in circulation.

p 481

1835 East India Company authorized to issue rupees
Up to this time India has had 25 varieties of indigenous rupees but after the East India Company is authorized to issue its own rupee it comes to be accepted as the standard in India and abroad. At the same time the silver rupee is given legal tender status but gold coins lose that privilege.

p 622

1836 President Jackson issues his Specie Circular
The circular lays down that future purchases of government land must be paid in gold or silver, or their strict equivalent, rather than in local notes or promises to pay. This has the effect of swelling the US government's coffers with specie.

p 479

1836 Number of German savings banks reaches 280
The rate of growth in their numbers increased after the end of the Napoleonic Wars in 1815.

p 570

1837 US States acquire legal power to issue paper money
This reverses attempts to uphold the constitutional denial of the power of the states to emit bills.

p 480

1837 Free Banking movement triumphs in Massachusetts
The free banking movement claims that citizens have a right to set up banks rather than being dependent on a privilege granted by the state. The State of Massachusetts passes an act in accordance with these principles.

p 480

1837 US banking crisis
The uncontrolled, chaotic expansion of banking in the US is slowed, then partly reversed by a financial crisis in which every bank is forced to suspend specie payment of notes. The crisis leads to a depression in the economy which lasts until 1843.

p 480,483-484

1838 Dresden convention fixes the exchange rate between the thaler and gulden
The Prussian thaler is used mainly in northern Germany and the gulden in the south. A fixed rate of 4:7 is adopted.

p 567

1838 Caisse Général du Commerce et de l'Industrie founded
The bank is created to support French industry and commerce but it has only a troubled, ten year existence.

p 559

1840 US establishes an independent Treasury
Its powers are more firmly established by a later act in 1846. Without a central bank the US Treasury has to carry out its own banking operations, relying as far as possible on specie for government payments and receipts.

p 479

1840 Bank of Bombay founded
This is the second of the presidential banks to be established during British rule to supplement the internal money supply of India.

p 622

c. 1840-1844 Currency School versus Banking School
With hundreds of banks issuing notes in Britain in uncoordinated fashion the value of the currency is difficult to control. A controversy arises between the currency school which believes that gold and Bank of England notes are the only real money and the banking school which believes that notes are just one among many forms of money.

p 310-313

1841 The Second Bank of the United States crashes
By this time it is simply a private bank and no longer a national institution. When it ran into difficulties during the 1837 crisis it was still the largest bank in the world, but it finally crashes in 1841.

p 484

1842 Oriental Bank founded in India
This is an exchange bank established for financing external trade and foreign exchange, from which the presidency banks are debarred by their charters.

p 622

1843 Chartered Bank founded in India
This is another exchange bank for financing external trade and foreign exchange.

p 622

1843 Bank of Madras founded
This is the third of the presidential banks to be established during British rule to supplement the internal money supply of India.

p 622

1844 Bank Charter Act passed in Britain
This Act combines most of the rules demanded by the currency school with just a few of the discretionary powers demanded by the banking school for commercial banks, but these powers are mostly grabbed by the Bank of England.

p 313-315

1846 Royal Giro and Loan Bank becomes the Bank of Prussia
It was founded in 1765 by Frederick the Great and was Germany's first note-issuing bank. Later, in 1875, it becomes the Reichsbank.

p 566

1846 Germany's first rural credit co-operatives are founded
Friedrich Wilhelm Raiffeisen starts the movement.

p 570

1846 Minimum legal banknote size in France still too high for most purposes
Up until 1846 the minimum legal denomination is 250 francs, or more than a month's wages for the average worker. In the following years it is gradually reduced.

p 557

1847-1848 Numerous local banks fail in France
Only in Paris has the Bank of France enjoyed a monopoly of note issues since its foundation. The rest of the country is largely dependent on the note issues and bill discounting of local banks, many of which are weak.

p 556

1847 The Woolwich, Britain's first permanent building society, is registered
Previous building societies were temporary associations which terminated when all members had purchased houses. The Woolwich, which was actually founded a few years before its official registration, is the first permanent building society and thereafter permanent societies quickly become the norm.

p 327

1847 Railway Mania in Britain reaches a peak
This increases the need for liquidity and strengthens feelings that the 1844 Bank Charter Act is far too restrictive. One of the reasons that railways are attractive to investors is that before limited liability becomes more generally permitted, shareholders are liable for the debts of their companies without limit, except in cases where the company has a royal charter or, as in the case of many railway companies, is specifically authorized by act of parliament.

p 317-317

1848 Bank of France is given a nationwide monopoly of note issues
The national bank is given a monopoly of note issuing to fill the gap left by the failure of numerous local banks. The Bank of France also begins to develop a large network of branches in different parts of the country.

p 556

1848 Schaaffenhausen is reconstituted as Germany's first joint-stock bank
The banking house of Schaaffenhausen in Cologne runs into difficulties and is reconstituted as a joint-stock company with the help of the Prussian state which acts in order to save the bank's industrial customers from the consequences of its failure.

p 568

1848 Gold Rush in California
The discovery of gold in California leads in the following decade to a massive increase in the production of gold coins by the mint with the result that in practice the US moves away from bimetallism towards a gold standard.

p 481

1850-1914 Huge amounts of capital are exported from Britain
Huge amounts of British capital are invested abroad, especially after 1890, in the United States, parts of the British Empire, and Argentina. The total reaches billions of pounds. Britain's later economic problems may be partly due to the neglect of British industry by the banks during this period.

p 348-352

1850 Number of German savings banks reaches 1,200
The pace of savings bank formation has accelerated since the mid-1830s.

p 570

1850 Germany's first industrial credit co-operatives are founded
Herman Schultz-Delitzsch inspires the movement.

p 570

1850 National Bank of Belgium founded
Later, in 1882, the National Bank of Belgium serves as a model for the Bank of Japan.

p 582

1851 Gold discovered in Australia
Along with the discovery in California 3 years earlier this leads to a huge expansion in the world's supplies of gold for money.

p 482

1852-1872 New French banks support economic development
The Crédit Mobilier, founded in 1852, is the first effective major French bank to be established specifically for providing funds for industry and infrastructure. It is followed by many other new banks in the next two decades. Despite the failure of the Crédit Mobilier in 1867 these banks channel savings into essential investments in transport, communications, agriculture and industry.

p 559

1853 Association for the Prevention of Counterfeiting founded in the USA
During the 1850s many thousands of different types of banknotes, both genuine and counterfeit, are in circulation causing considerable problems for bankers and traders.

p 481

1853 US Subsidiary Coinage Act
The silver content of half-dollars, quarters and dimes is reduced by about 7% making it no longer worthwhile to sell them to silver metal dealers. Therefore the new coins remain in circulation.

p 481

1856 The Mercantile Bank becomes the first note-issuing bank in Singapore and Malaya
This London-registered bank expands from its Indian base to Malaya and Singapore.

p 626

1857 The Münzverein, German coinage union
Different German states use different currencies, e.g. the thaler in the north and the gulden in the south. The Münzverein is a step towards the wider acceptance of different currencies.

p 566-567

1857 US removes legal tender status from all foreign coins
By this time coins are merely the small change of commerce.

p 468,481

1857 World-wide banking crisis starts in the US
In the month of October 1,415 US banks are forced to suspend specie payments. Because of huge European, especially British, investment in the US the effects are felt on the other side of the Atlantic. In Germany many of the new idustrial banks founded in the early 1850s fail. However recovery from the crisis is rapid.

p 484-485,568

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Roy Davies - Last updated 25 May 2005.