A Comparative Chronology of Money

Monetary History from Ancient Times to the Present Day

1700 - 1749

© 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).

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

1700 Collapse of the Darien Company ruins Scotland's trade hopes
The Scottish company was intended to set up a colonial entrepot at Darien in Panama. The impact of its failure on Scotland's attempts to develop its overseas trade proves a powerful motivating factor in the Act of Union with England in 1707.

p 274

1704 Promissory Notes Act
This confirms the legality in England of goldsmith's notes as negotiable, i.e. payable to the bearer rather than to a named person.

p 251

1705 John Law publishes Money and Trade Considered
After travelling widely on the Continent, Law returns to his native Scotland and publishes Money and Trade Considered: With a Proposal for Supplying the Nation with Money. He argues that metallic money is unreliable in quality and quantity. Bank notes issued and managed by a public bank would remove the brakes on the economy. He is probably the world's first Keynesian; but compare Sir William Petty, 1682.

p 553

1707 Act of Union of England and Scotland
Among the provisions of the act is a stipulation that the United Kingdom should have a uniform coinage - a single currency symbolising and cementing a united kingdom. During the 3 years of recoinage in Scotland the shortfall in currency is made up by the issue of notes by the Bank of Scotland.

p 274-275

1708 Britain sets American colonies' exchange rate for Spanish dollar
The British parliament specifies that 6 shillings should be the maximum rate any of the colonies should use for the Spanish peso or dollar which is widely used as currency by the colonists. However the Act has little effect.

p 459-460

1713 John Law returns to France
His ideas were rejected in Britain but in France he gets the chance to put them into effect.

p 553

1715 Duke of Orleans becomes Regent of France
French public finance is in a parlous state after the wars and extravagance of Louis XIV. State promissory notes fall to a quarter of their nominal value within a year. In desperation the Duke turns to John Law.

p 554

1715 North Carolina makes 17 different forms of money legal tender
All the British colonies in North America tend to suffer from a dearth of the official British coinage. Consequently they use a variety of substitutes including wampum, copied from the native inhabitants, tobacco and other natural commodities, and Spanish and Portuguese coins. The importance of these substitutes varies according to location.

p 38,457

1716 John Law creates France's first public bank
To economize on the use of precious metals Law establishes a note-issuing bank, Law & Co. or the Banque Generale. In contrast to the state's short-term paper Law's banknotes appreciate in value.

p 554

1718 French Regent reorganizes Law's bank
Law's bank becomes the Banque Royale and is given a new charter placing the lucrative note-issuing business more directly under the control of the Regent.

p 554

1719-1720 The Mississippi Bubble
The Mississippi Company had been set up to exploit the wealth of French colonies, especially in Louisiana. In 1719 it is also given a monopoly of trade with the East Indies and China and a speculative boom in the value of its shares ensues. The boom, combined with the over-issue of notes by the Banque Royale, leads to a drain of precious metals from France to London. Law's enemies persuade the Regent to dismiss him from his post as Minister of Finance, the bank stops payment and the boom collapses. The debacle sets back the development of banking in France by about 100 years.

p 264,268,278,554-555

1719-1720 The South Sea Bubble
Contemporary with the Mississippi Bubble a speculative boom takes place in the shares of the South Sea Company, originally set up to break the Spanish monopoly of trade with Central and South America, after it proposes to take over the National Debt. Numerous other companies are set up to take advantage of the speculative mania. The sudden collapse of the boom leads to changes in company law which affect the future development of banking in both Britain and America.

p 264-266

1722 Unsuccessful attempt to alleviate Ireland's chronic shortage of low-value coins
The lack of small money in Ireland has grown to such an extent that manufacturers are obliged to pay their employees in cards signed upon the back, to be exchanged afterwards for money. In August 1722 minting of copper halfpence and farthings for Ireland begins by William Wood in Bristol but ceases after protesters in Ireland demand that the country should have its own mint. Consequently the Irish poor are left to suffer for many years from their own promissory cards.

p 246-247

1722 Royal Prussian Seehandlung founded
The first German state bank is created for the purpose of stimulating foreign trade.

p 566

1723 First issue of notes by the Pennsylvania Land Bank
These are secured by mortgages on the property of the bank owners.

p 461

1727 The Royal Bank of Scotland is founded
The Royal Bank introduces a "cash-credit" system allowing certain applicants for loans to withdraw cash as required, interest being paid only on the amount withdrawn. This is copied by other banks in Scotland and then in England and is the origin of the overdraft.

p 275-276

1727 Tobacco notes become legal tender in Virginia
Certificates attesting to the quality and quantity of tobacco deposited in public warehouses circulate more conveniently than the actual leaf, already used as money for over a century, and these notes are made legal tender.

p 458

1729 Benjamin Franklin's Modest Enquiry into the Nature and Necessity of a Paper Currency
Following the publication of this work Franklin is awarded the contract for printing the Pennsylvania Land Bank's third issue of notes.

p 461

1741 British Parliament decides that the Boston Land Bank is illegal
The Land Bank or Manufactory Scheme is ruled to contravene the Bubble Act of 1720 which is retrospectively extended to cover the colonies.

p 462

1749-1751 Pelham reduces the burden of the British national debt
Henry Pelham, the British prime minister, takes advantage of low market rates of interest to reduce interest payments on the national debt from 4% to 3½% in 1749 and 3% in 1750, and replaces a whole series of annuities by a single 3% consolidated stock or consols in 1751.

p 269-270

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Roy Davies - Last updated 25 May 2005.