Page:International Library of Technology, Volume 89.djvu/19

4 keep in its vaults an amount of coin or bullion equal to all its obligations. It became a great warehouse for bullion for foreigners as well as natives.

5. Sweden.—Conant, in his "History of Modern Banks of Issue," says that the State Bank of Sweden was founded in 1656 and is understood to have first made use of bank bills as credit money not fully covered by coin reserve. The bank became a public institution in 1668, its capital being furnished by the nation. Its administration, however, was under the charge of a commission, which was responsible to the executive department of the government. This bank, although first instituted as one of deposit only, appears afterwards to have carried on a commercial business. It loaned money not only on bullion and other merchandise, but on real estate to the amount of three-fourths of its value. In 1752, these advances had increased to such an extent that the solvency of the bank was threatened. In 1754, an arrangement was entered into whereby debtors to the bank were allowed to pay their obligations in annual instalments of 5 per cent. Its successor, the Bank of Sweden, is now in existence and is the depositary of the public funds.

6. Great Britain.—In 1640, it was the custom of English merchants to deposit their cash in London Tower. At one time, Charles I is said to have seized £120,000, the same being repaid after many protests and long delay. Following this, the banking business was chiefly done by a class of bankers called the goldsmiths. It was the custom of these bankers to collect rents for their customers, receiving money on which they paid interest. They also acted as pawnbrokers and issued what were called goldsmiths' notes, which were small receipts payable on demand. It is understood that the invention and use of bank notes was thus introduced into England. Some years later, commerce came to feel the need of a banking institution that would provide some method of raising money beyond the plan of sending agents to individual merchants. In 1690, Parliament made every effort to raise money to carry on the war with France. Every scheme