A Comparative Chronology of Money

Monetary History from Ancient Times to the Present Day

1750 - 1799

© Roy Davies & Glyn Davies, 1996 & 1999.


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

c. 1750- The Industrial Revolution in Britain
In the mid-eighteenth century, at the start of the Industrial Revolution there are barely a dozen banking houses in England and Wales outside the London area.

p 285

1752 Britain forbids New England colonies from issuing new bills of credit
In addition, Parliament insists that all outstanding issues be promptly redeemed at maturity.

p 462

1759 General Wolfe captures Quebec
During his campaign he complains about being hampered by lack of funds. Similarly inflation is blamed for the lack of funds which led to the defeat of General Braddock in 1755. Consequently the British government decides to increase taxation in America, thus spurring the Revolution.

p 459-460

1760 Wampum factory opened in New Jersey
Demand for wampum as currency, and later ornament, remains strong. In the factory steel drills are used to make the holes that are used for stringing the shells together. This increases output of wampum enormously causing inflation. The factory remains in production for 100 years.

p 39-40,458,640

1762 Barings Bank founded
When Barings goes bankrupt in 1995 it is Britain's oldest merchant bank.

p 346

1764 Britain forbids all its American colonies to issue paper money as legal tender
This punishes the colonies that had been careful not to over-issue paper money as well as those that had been irresponsible. The only exception is for strictly military purposes. "No law ... could be more equitable", wrote Adam Smith, "than the act of parliament so unjustly complained of in the colonies." (p 348 of the Wealth of Nations). Adam Smith was in favour of paper money but against it having the status of legal tender.

p 463

1765 Royal Giro and Loan Bank founded by Frederick the Great
This is Germany's first note issuing bank. It later becomes the Bank of Prussia and later still, the Reichsbank.

p 566

1766 Benjamin Franklin fails to persuade British parliament to allow use of paper money in America
While in London Franklin tries unsuccessfully to persuade Parliament of the case for a general issue of colonial paper money.

p 461-462

1768 Russia's first two public banks established
They are created by Catherine the Great to finance Russia's war with the Ottoman Empire (Turkey).

p 553

1770 London Clearing House created
The clearing house is set up by private bankers. Joint stock banks, country banks, and the Bank of England are not admitted until many years later.

p 321-322

1770 Rhode Island's paper money rendered worthless by hyperinflation
Many of the British colonies in North America have over-issued notes causing inflation but Rhode Island is the worst.

p 461

1771 The first of the German Landschaften created in Silesia
The Landschaften are state cooperatives which grant mortgages, and other credit based on land, for the improvement of agriculture. Other Landschaften are established in the 1770s and 1780s.

p 566

1772 Scotland has a nationwide banking network
By this time 31 banks are operating in Scotland with branches and agencies covering most of the country. Thus Scotland is the first country in the world to establish an almost nationwide system of branch banking.

p 276

1772 Scottish banking crisis
The Ayr Bank, which rashly issued large quantities of notes backed with the wealth, based on land, of its owners, collapses along with 13 private bankers. This confirms the more conservative practices of the older Scottish banks.

p 277-278

1775 First British building society formed
Richard Ketley, an inn proprietor in Birmingham, and a group of his customers and friends form a society for saving money for building and purchasing houses for their own occupation.

p 326

1775-1783 The American Revolution or War of Independence
The American Congress, and individual states. finance their war effort overwhelmingly by printing money. This eventually leads to hyperinflation rendering the continentals worthless - but the Revolution is successful.

p 464-465

1776 Adam Smith defends paper money
In his Wealth of Nations he draws attention to the benefits of paper money in stimulating business both in Scotland and in the American colonies.

p 463

1776-1793 Caisse d'Escompte, France's second public note-issuing bank, founded
This is the first to be established in Paris since the failure of John Law's venture. After 10 successful years it starts to grant too many loans to the government, accompanied by excessive note issues and is forced into liquidation.

p 555

1778 Savings bank established in Hamburg
This is one of the earliest in Europe and gives rise to a handful of similar banks in north Germany by the end of the eighteenth century.

p 333,570

c. 1780-1810 Rapid spread of country banking in England and Wales
By 1810 the total number of licensed and unlicensed banks is probably over 800. In most cases their founders have strong ties with particular industries or trades and the banks meet the need of small workshops, mines etc. for working capital. Without these banks the Industrial Revolution would have been strangled in its infancy.

p 286-291

1780 Bank of Pennsylvania founded
This is the first American bank to be established since the declaration of independence from Britain. It is basically a temporary means of raising funds for the American army which is in a desperate financial situation.

p 469

1782 Bank of North America begins operations
It was granted a charter by Congress the previous year. It fulfils a wide range of banking functions and is a great commercial success.

p 469

1783 Unpaid soldiers prevented from looting the Bank of North America
This stimulates opposition to the bank, as much of the public sympathises with the soldiers, and the legality of the bank is later challenged by Pennsylvania's representatives.

p 471

1783 Act for the abolition of the British Treasury Tallies
The act lays down that the wooden tallies are to be abolished on the death of the last of the Exchequer Chamberlains operating the system.

p 663

1784 Bank of New York and Bank of Massachusetts both open
The Bank of New York is the oldest existing US bank (at the time of writing in 1996)

p 469

1785 Bank of America's Congressional charter is revoked
However the bank subsequently acquires a new charter from the state government of Delaware.

p 471

1786-1787 Shay's Rebellion in Massachusetts
Captain Shay leads a rebel force of debtors, disaffected farmers and ex-soldiers to try and secure debt relief, issues of paper money, and other reforms. The rebellion is put down.

p 466

1786 US Confederation Congress passes the Mint Act
The intention is to meet a currency shortage - but only a few tons of copper coins are minted.

p 467

1787-1817 Privately-issued tokens become common in Britain
By the end of the 18th century there is a severe shortage of copper and silver coins in Britain so that many firms have difficulty in obtaining enough currency to pay wages. This leads to a growth in payments in kind, use of foreign coins, and unofficial tokens. The token manufactures greatly expand the amount of currency available.

p 292-296

1789 The French Revolution
The revolutionary government seizes church lands and using them as security issues assignats, bonds carry 5% interest. However the interest is soon abandoned and the assignats become simply inconvertible, state-issued paper money notes.

p 555

1789 US Constitution gives Congress power over money creation
The States are not allowed to coin money, issue bills of credit or make anything except gold and silver legal tender.

p 466

1790 Schaaffenhausen founded in Cologne
Later this private bank becomes Germany's first joint-stock bank in 1848.

p 566

1791 Bank of the United States receives a 21 year charter
Because of opposition to the bank and fears that it would contravene the Constitution, Washington is going to use his veto but is persuaded not to by Alexander Hamilton.

p 472

1792-1815 French Revolutionary and Napoleonic Wars
The pressures of war cause many changes in the financial systems of both France and Britain.

p 297-298,556

1792 US Coinage Act
The Dollar is adopted as the unit of account, based on a bimetallic standard, subdivided into 100 cents. Foreign coins are supposed to lose their status as legal tender within 3 years of the US coins coming into circulation.

p 467-468

1793-1801 Britain sends more than £15 million to its allies
This is to support them in the war against France.

p 297

1793 The Bank Indemnity Act
This act gives the directors of the Bank of England legal immunity for loans to the government. This enables the British government to borrow much larger sums for the war against France.

p 297-298

1793 Friendly Societies Act
Societies for encouraging saving by the poor are made exempt from the provisions of the Bubble Act. The importance of the protection given by the Friendly Societies Act increases after the passage of the Anti-Combination Acts of 1799 and 1800 which are intended to prevent the development of subversive movements in Britain inspired by the French Revolution.

p 322-323

1794 US Mint Starts Operations
The Mint in Philadelphia is the first purpose-built structure authorized by the United States.

p 467

1795 Hyperinflation in France
The total nominal value of the assignats in circulation reaches 20 billion livres. Riots in Paris pave the way for the rise of Napoleon.

p 556

1796 Caisse des Comptes Courants founded
This short-lived bank is absorbed by the Bank of France in 1800.

p 555

1796 France replaces the assignats by a gold-based currency
This has the effect of drawing bullion back from Britain.

p 298

1797 Matthew Boulton given contract for minting copper coins
Because tokens had become common the British government decides that the free market could probably supply copper currency better than the Royal Mint. The initial contract is for 50 tons of two-penny and one-penny pieces. Boulton's partnership with James Watt results in the use of steam-powered machinery for producing 4,200 tons of copper coins eventually.

p 293-294

1797 Bank of England notes are made inconvertible
The provisions of the Bank Restriction Act are initially expected to be of very short duration but it is 24 years before convertibility is restored.

p 298

1797 Spanish dollars are overstamped for circulation in Britain
As a result of a desperate shortage of silver coins the Bank of England issues altered foreign coins from its reserves. Half a million pounds worth of Spanish dollars issued by King Charles IV are overstamped with a small engraving of George III. However the issue fails because overstamping is also applied unofficially to the plentiful supplies of light or base Spanish dollars.

p 294

1797 US extends legal tender status to Spanish dollars indefinitely
Because of a slight over-valuation of silver little gold is brought to the Mint. Also users hold on to the new silver coins preferring to pass on the older, duller Spanish ones. Consequently there is a shortage of both US gold and silver coins.

p 468

1797 Caisse d'Escompte founded
This bank is absorbed by the Bank of France in 1803.

p 555

1798 The Rothschilds expand into Britain
The Rothschilds banking house originated in medieval Frankfurt on Main. In 1798 Nathan Rothschild is sent to Manchester to deal in the cotton industry. His banking operations grow rapidly during the Napoleonic Wars, making full use of his family's international network of couriers.

p 347

1799 William Pitt introduces income tax
This new tax raises considerable sums. During the war the British prime minister also increases revenue by broadening the range of indirect taxes as much as possible.

p 298

c. 1799 Use of tokens, foreign coins etc. in Britain probably exceeds that of official coins
By the turn of the century the total supply and velocity of circulation of tokens, foreign coins, and other substitutes probably exceeds that of official coins of the realm. Some of the chief engravers at the Royal Mint make a good profit from selling new designs (not the official ones) to the token manufacturers.

p 293

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Roy Davies - Last updated 25 May 2005.