Chapter Nine
THE SECRET SCIENCE The condensed history of fractional-reserve banking; the unbroken record of fraud, booms, busts, and economic chaos; the formation of the Bank of England, the world's first central bank, which became the model for the Federal Reserve System.
The bank of Amsterdam, The Bank of Venice, The Bank of Hamburg, Early Banking in England, The bank of England The Secret Science of Money, From Inflation to bank runs, Booms and Busts Now Guaranteed, In Defense of Gold Standard, Depression and reform,, The Rollar Coaster Continues, The mechanism Spreads Over Other Countries, Summary
THE SECRET SCIENCE The condensed history of fractional-reserve banking; the unbroken record of fraud, booms, busts, and economic chaos; the formation of the Bank of England, the world's first central bank, which became the model for the Federal Reserve System.
Banks of deposit first appeared in early Greece, concurrent with the development of coinage itself. They were known in India at the time of Alexander the Great. They also operated in Egypt as part of the public granary system. They appeared in Damascus in 1200 and in Barcelona in 1401. It was the city-state of Venice, however, which is considered the cradle of banking as we know it today. THE BANK OF VENICE
By the year 1361, there already had been sufficient abuse in banking that the Venetian Senate passed a law forbidding bankers to engage in any other commercial pursuit, thus removing the temptation to use their depositors' funds to finance their own