HIST113 Lecture 1: Hist 113 Banking
17 Sep 2017
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Early banks were quite simple, they were created as joint shareholding companies, and were meant to take currency and notes, and exchange them for their own paper notes. Early banks were not very profitable, but were initially made to ease the process of currency exchange. First banks were privately owned because they were created by major merchants. Governments chartered banks and provided investors with limited liabilities to make them more appealing, but they also required the banks to have a certain amount of capital on them at all times to back up their notes. This capital was usually gold or silver, as it was a tangible item that had value. Early chartered banks were also very limited in their activities- they were not allowed to issue mortgages, and could not use land holdings as capital. Canadian banks were influenced from both american and european banks, most notably the dollar decimal system from america.
