A Comparative Chronology of Money

Monetary History from Ancient Times to the Present Day

1600 - 1699

© Roy Davies & Glyn Davies, 1996 & 2002.

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).

1540-1640 The Price Revolution in Europe
Europe, including Britain, experiences a prolonged period of inflation, partly because of the huge influx of gold and silver from the Spanish colonies in America and partly because the increase in population is not matched by an increase in the output of the economy. Compared with many earlier and later inflations this hardly deserves being described as a revolution.

p 211-217

1600 The London East India Company is founded
Imports from India subsequently cause a drain of precious metals from England to India.

p 226-227,236,239

1601 Poor Law introduced in England
The aim is to establish a national pattern for parishes to copy in dealing with the problems of the destitute, which have become more obvious since the dissolution of the monasteries, 1534-1540.

p 215

1602 Dutch East India Company founded
This company provides the financial backing for Dutch competition with England in the Far East for control of the pepper market.

p 548

1609 Bank of Amsterdam is founded
This public bank is established to provide a superior and more controlled service than that available from private bankers. Later its example inspires the establishment of the Bank of England.

p 233,549

1609 (Public) Bank of Barcelona founded
Holland and Britain are not the only countries to adopt the new banking practices which originated in Italy.

p 552

1613 Lord Harington issues copper farthings under licence
As a result of the lack of low denomination coinage in England token coins, mainly of lead, are produced by as many as 3,000 unofficial minters who pay the king nothing. The licence James I issues to Lord Harington stipulates that half the profits are to go to the king.

p 208,209

1615 First balance of trade and balance of payments calculations
The calculations for England by Sir Lionell Cranfield and Mr. Wolstenholme are referred to by Sir Francis Bacon in an essay written in 1616 (though not published until 1661).

p 227

1616 Bank of Middelburg founded
Banking continues to spread in the Netherlands.

p 552

1619 Hamburg Girobank founded
Publicly owned banks increasingly complement older, private banks.

p 552

1619 Tobacco begins to be used as currency in Virginia
Barely a dozen years after its introduction to Virginia tobacco starts being used as currency and this use continues for nearly 200 years.

p 458

1621 Edward Misselden's Circle of Commerce or Balance of Trade is published
Misselden, who is the first to use the term balance of trade in print, argues (like Aylesbury 240 years earlier - in 1381) that bullion outflows do not matter if trade is balanced.

p 227

1621 The Act Against Usury
The maximum legal rate of interest in England is reduced to 8% per annum.

p 221

1621 Bank of Delft founded
Banking continues to spread in the Netherlands.

p 552

1621 Dutch West India Company founded
This company provides the financial backing for Dutch competition with England for a foothold in the New World.

p 548

1621 Bank of Nuremburg founded
The trend continues towards publicly owned banks which complement the older private banks.

p 552

1633-1672 The Rise of the goldsmith-bankers
Some British goldsmiths, by dealing in foreign and domestic coins and by letting their safes be used for deposits of valuables, gradually evolve into bankers.

p 251

1633 The earliest extant English goldsmith's note is issued
Goldsmith's notes come to be used not only as receipts for reclaiming deposits but also as evidence of ability to pay.

p 251

1634-1637 Tulip mania in Holland
The high prices commanded by tulips with unusual patterns and colours encourages the general public to take part in speculative deals. A nationwide mania develops and sends the prices of bulbs soaring but when the bubble bursts they drop to one-twentieth, or less, of levels prevailing a few days earlier.

p 549-551

1634 Ship money taxes increased by Charles I
These taxes, introduced to raise money for the build-up of the English navy, prove extremely unpopular.

p 210-211

1635 Bank of Rotterdam founded
The spread of banking in the Netherlands continues.

p 552

1637 Wampum becomes legal tender in Massachusetts
This is only for sums up to one shilling. Wampum is a type of shell used by the native Americans as currency and adopted by the settlers.

p 40

1640 Charles I forcibly purchases the East India Company's pepper stock
Owing to his disputes with parliament over taxation, which lead ultimately to the English Civil War, Charles I is short of money. He compels the East India Company to sell him its entire stock of pepper on two years' credit and immediately sells it at a loss for ready cash, solving his short-term by adding much more to his medium-term debts.

p 239-240

1640 Seizure of the mint by Charles I
In another move to solve his financial problems Charles I seizes the mint and keeps one third of the bullion for six months.

p 240

c. 1640 Reduction in silver imports causes slump in Chinese economy
China has become dangerously dependent on New World supplies of silver for its currency. Supplies from this source start to dry up with disastrous consequences for the late Ming economy.

p 189

1642-1651 English Civil War
The war is fought because parliament disputes the king's right to levy taxes without its consent. The use of goldsmith's safes as secure places for people's jewels, bullion and coins had increased after the seizure of the mint by Charles I in 1640 and increases again with the outbreak of the Civil War. This accelerates the tendency of some goldsmiths to become bankers and development of that aspect of their business continues after the war is over.

p 250

1643 Massachusetts raises limit on wampum as legal tender
The limit is raised to £2.

p 40

1645 Paris mint is fully mechanised and starts production of milled coins
With the replacement of the ancient technique of hammering coins, minting has become fully mechanised. Improved productivity is not the only advantage. The milled edges prevent clipping and cutting and make counterfeiting more difficult.

p 241-242

1652-1684 John Hull's unofficial mint operates in Massachusetts
The mint coins threepences, sixpences and pine-tree shillings all of which contain about three-quarters of the silver in their newly minted English equivalents but about as much as most of the old, worn coins in circulation.

p 459

1656 Bank of Sweden founded
Its charter authorizes it to accept deposits, grant loans and mortgages, and issue bills of credit.

p 552

1659 The ealiest extant British cheque is issued
This is an order to the London goldsmiths Morris and Clayton to pay a Mr Delboe £ 400.

p 250-251

c. 1660 Goldsmiths' receipts become banknotes
Because goldsmiths' notes are accepted as evidence of ability to pay they are a convenient alternative to handling coins or bullion. The realisation by goldsmiths that borrowers would find them just as convenient as depositors marks the start of the use of banknotes in England.

p 251

1661 Bank of Sweden issues notes
It becomes the first chartered bank in Europe to do so.

p 552

1661 Wampum ceases to be legal tender in New England
However it continues to be used as currency in other parts of America for another 200 years.

p 40

1663 First British Guineas produced
This is a new milled coin, initially worth £1, using gold from west Africa, hence the name guinea.

p 242,244

1664 Construction of the New York citadel paid for in wampum
Stuyvesant arranges a loan worth over 5,000 Dutch gilders in wampum to pay the wages of workers constructing the citadel.

p 40,458

1666 Act for the Encouragement of Coinage
English mint charges are abolished and replaced by import duties on wine, beer, cider, spirits and vinegar.

p 243

1668 Pepys refers to banknotes in his diary
In his entry for 29 February he mentions sending his father a note for £600 issued by a goldsmith.

p 251

1672 First state issues of copper coinage in England
There had been occasional licensed issues by private minters since 1613. The attractive new, milled coinage with the image of Britannia, tends to disappear from circulation, in accordance with Gresham's law, though not as quickly as the new silver coins do, while the existing badly worn, unattractive hammered coins and tokens continue to be used.

p 243

1672 Charles II introduces the Stop of the Exchequer
The goldsmiths refuse to lend more money to the king who has already borrowed huge sums and therefore he prohibits most payments from the exchequer, initially for a year and later indefinitely. In the late 1670s and the 1680s several of his largest creditors go bankrupt.

p 251-254

1681 First public note-issuing bank founded in Massachusetts
In this context the term bank means simply a batch of bills of credit issued for a temporary period. This example is followed subsequently in other British colonies in North America.

p 461

1682 Sir William Petty's Quantulumcunque concerning Money published
Petty, a founder of Britain's Royal Society, argues that banking will provide a major stimulus to the English economy and world trade.

p 238

1688 The Glorious Revolution in England
William of Orange and his wife Mary are made jointly sovereign by parliament after James II flees to France. Political and economic power is in the process of shifting from the monarch to the moneyed classes and thus the financial and constitutional revolutions are closely and causally intertwined.

p 244, 254, 280-281

1689-1697 War of the League of Augsburg against Louis XIV of France
The English government has difficulty in raising enough money for the prosecution of the war by taxation and borrowing from the goldsmiths.

p 256,258

1690 The Massachusetts Bay Colony issues official paper money
These notes are used to pay soldiers returning from an expedition to Quebec. They can be used to pay taxes and are accepted as legal tender. Other colonies subsequently copy the example of Massachusetts.

p 460-461

1693 The English Parliament passes the Tontine Act
This act, based on the ideas of the Italian adviser to the French court, Lorenzo Tonti, marks the beginning of the English national debt. The tontine is a scheme for raising money on a long-term basis by weighting rewards in favour of the longest lasting contributors.

p 263

1694 Bank of England is founded
The main purpose of the Act founding the Bank is to raise money for the War of the League of Augsburg by taxation and by the novel device of a permanent loan on which interest would be paid but the principal would not be repaid.

p 238,258-262

1695 Bank of Scotland is founded
The first joint-stock bank in Europe solely dependent on private capital and wholly unconnected with the state.

p 238,272-273

1696 The Million or Lottery Act
The English government attempts to raise £1 million by issuing 100,000 shares of £10 at 10% with the possibility of sharing a total of £40,000 to be put up each year as lottery prizes. The target is not reached and the money is used as subscriptions to the capital of the Million Bank which becomes an investment fund for government securities.

p 260,263-264

1696 The Great Recoinage
England's silver coins, many of which are worn or clipped, are replaced by new, full-weight silver coins.

p 244-246

1696 The Ingrafting of the Tallies
Following the failure of the attempt to create a National Land Bank, which damages confidence in financial institutions, and a shortage of cash caused by the Great Recoinage, there is a collapse in the value of government tallies. The Bank of England helps the government out by taking up most of the tallies which are ingrafted into the Bank's capital stock. In return the Treasury agrees to pay 8% interest on the tallies.

p 261

1698 Coins form less than half the English money supply
Davenant, a contemporary writer, estimates that the total value of coins in circulation is less than that of tallies, bills, banknotes etc. Increasingly the power of money creation is passing from the King, in charge of the mint, to the London money market and provincial banks. Political and constitutional power is also affected by this transfer of financial power.

p 278-281

1699-1727 Sir Isaac Newton is Master of the Mint
During Newton's period in charge the emphasis of the mint's work changes from coining silver to coining gold.

p 247

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Roy Davies - Last updated 25 May 2005.