| 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 |
|
