Kankakee Valley Post, Volume 1, Number 10, DeMotte, Jasper County, 29 September 1932 — BANKING HOUSES IN HISTORY OF WORLD [ARTICLE]

BANKING HOUSES IN HISTORY OF WORLD

In Existence as Early as Year 600 B. C. The earliest banks, if such they can be called, date back many centuries before the Christian era, and were generally conducted by governments in an attempt to prevent plunder of the money they had issued. The early places of business were usually the temples. The cuneiform writings disclose, however, that as early of 600 B. C. private banks were known in Babylonia. The firm of Egibi & Son of Babylon is the first private banking house of which record survives, its name perhaps setting the precedent for the nepotism that has ever since characterized the business. But to a banker named Caicus, at Alexandria, in 260 B. C-, must go the credit for offering what appears to be the first banking service really deserving of the name. He paid interest on deposits, permitted withdrawals upon demand, and kept his bank open for business every hour of the day and night! Despite its auspicious start, banking gradually came into public disfavor, and that disfavor culminated in a prohibition of interest during the reign of Alexander Severus of Rome, at the time when that country was dominant in world affairs. The fecundity of money came to be regarded as a monstrous thing, and in the course of time the Jews were the only people willing to brave storm of criticism that met every attempt to establish banks. They organized what were known as poverty banks, or lending houses, and by the

Fifth century of our era these makeshift banks were the only lending institutions in Italy. The effect of the long interdiction of interest by pope and emperor was a virtual paralysis of trade. All commercial enterprise waned, and poverty seized the land. The period is still known as the Dark ages. The abhorrence of interest, however, gradually declined, and during the Eighth century the monks took over the poverty banks from the Jews. This covert recognition of banking by the church did much to restore it to its former good estate, and it gained rapidly in prestige during the next two centuries, when the popes confirmed formally the right to charge interest and to demand adequate collateral on loans.--Clifford B. Reeves, in the American Mercury.