© 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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