ment of their joint concern, and thus formed the basis of what was afterwards called the Bank of Venice. The bank was therefore an incorporation of public creditors, to whom privileges were given by the State as some compensation for the withholding of their funds. The public debt was made transferable in the books of the bank, in the same manner as the National Debt of Great Britain is transferable at the present time; and it was also made obligatory upon the merchants to get their contracts and draw their bills in bank money, instead of the current money of the city. The Bank of Venice, which was always essentially a bank of deposit, and not of issue, existed for more than six centuries, or until the subversion of the Republic in 1797. It became the parent of several other celebrated banking establishments, such as those of Barcelona, of Genoa-which, for a considerable time, held the island of Corsica in pawn-of Hamburg, and of Amsterdam.

Italian merchants, well acquainted with the art of banking, as practised in Venice, settled in London in considerable numbers towards the latter part of the twelfth century, and, probably, got into early connexion with the previouslyestablished money-lenders-the goldsmiths and

the Jews. The business was then very profitable, but also exceedingly dangerous, the lending of money not having yet been made legal-this only took place in 1546—and passing by the ugly name of usury. A curious and no less terrible incident in these banking transactions of former times is mentioned in Arnold's "Chronicle." The old historian quaintly records that in the year 1278 "all the goldsmiths of London, with all those that kept the Change, and many other men of the City, were arrested and taken for buying of plates of silver, and for change of great money for small money, which were indicted by the wards of the City; and on the Monday next after the Epiphany, the justices sitting at the Guildhall to make deliverance, that is to say, Sir Stephen of Pencestre, Sir John of Cobham, and other with that these last [pleased] to associate to them, and there were prejudged and drawn and hanged three English Christian men, and two hundred four score and twelve English Jews." It seems the shrewd Lombards escaped being "drawn and hanged" together with their Christian and Jewish brethren, which was due in all probability to the high favour which they enjoyed at Court and among the nobility. Henry IV. borrowed very largely from the

"Longobards"-by which term must be understood merchants of the four Republics of Genoa, Lucca, Florence, and Venice—so also did several of his predecessors and successors. It is stated in the eighth volume of the "Foedera" that in the year 1404 the "Society of the Genoese" lent the sum of one thousand marks, and the merchants of Florence five hundred marks, to the Crown, with the understanding "to pay themselves out of the customs which shall from time to time become due by their ships importing merchandize to London, Southampton, and Sandwich; as also out of the duties on wool, leather, cloth, and other merchandize which the said ships shall export from the said three ports into foreign parts." In the following year the like sums were advanced to the King by the two Lombard societies, on the same security for repayment. It is curious that in none of those loans is there any mention of the word interesse, nor of any term denoting usury or interest on money. There is little doubt, however, that the Lombard bankers were well paid some way or other; they, at any rate, enjoyed a desirable immunity from being drawn and hanged like ordinary "English Christian men."

During the whole of the Middle Ages the

trade in money was chiefly in the hands of a number of persons called the Royal Exchangers. There were severe laws against exporting English coin; and the exchanging of the money of the realm for foreign coin or bullion was held to be an especial Royal prerogative, a "flower of the Crown." An important official, the King's Exchanger, was alone entitled to pass the current coins of the realm to merchant strangers for those of their respective countries, and to supply foreign money to those who were going abroad, whether aliens or natives. The house in which this business was transacted was commonly called the Exchange. In the reign of King John the place of the Exchange in London was in the street now called the Old Change, near St. Paul's. In the reign of Henry VII. the office of "Royal Exchanger" fell into disuse; but it was re-established in 1627 by Charles I., who asserted in a proclamation on the subject that no person of whatever quality, trade, or profession, had a right to meddle with the exchange of moneys without a special licence from the Crown. At the same time the King appointed the Earl of Holland to the sole office of "Changer, Exchanger, and Outchanger," which appointment gave rise to a vast amount of dissatisfaction,

particularly in the city of London. Thereupon a pamphlet was published the next year by the King's authority-" Cambium Regius, or the Office of His Majesty's Exchanger Royal"— defending the King's prerogative, which, it was stated, had been exercised without dispute from the time of Henry I. until the reign of Henry VIII., when it ceased on account of the coin becoming so debased that no exchange could be made. A further reason was given in the fact that "for above thirty years past it has been the usual practice of those exchanging goldsmiths to make their servants run every morning from shop to shop to buy up all weighty coins for the mints of Holland and the East Countries, whereby the King's mint had stood still."

The gradual development of the trade of "goldsmitherie" into the banking business is here indicated. It is still further sketched in a rare pamphlet of the date of 1676, entitled "The Mystery of the New-fashioned Goldsmiths, or Bankers, Discovered." The pamphlet says that the London merchants were generally accustomed to deposit their money in the Tower, in the care of the Master of the Mint. Charles I. took advantage of this circumstance by seizing, shortly before the meeting of the Long Parliament,