Banks

annabel · Post by **annabel** » Wed January 26th, 2011, 5:25 pm

Not sure if this is the right place for this but I am reading Cynthia Harrod-Eagles' 'The Devil's Horse', 16 in her Dynasty saga.
December, 1825 brings a 'bubble' in financial speculation - unwise speculations, a run on the banks, disaster for many.
Images of the long queues outside Northern Rock banks in the UK came to mind.
The difference is that then the owners and shareholders also went under, now our government bails them out.
I have two questions:
Does anyone know when the first such run on the banks occurred?
and
when did they become immune to the consequences?

Margaret · Post by **Margaret** » Thu January 27th, 2011, 10:55 am

I don't know when the first run on the banks occurred, but the history of banks is utterly fascinating. I've only scratched the surface learning about banks in the U.S., but it wasn't all that long ago (roughly a century and a half) that almost anyone who wanted to could call themselves a bank and issue paper notes. People traveling from the southern states in the U.S. to the northern states or vice-versa had to pay close attention to the bank notes they were carrying, because the value dropped as they traveled farther from the general area of the issuing bank. Counterfeiting was rife, and they could very easily find that they were carrying counterfeit money which, to anyone with a directory of bank notes (about the size of a modern phone book), might be identifiable as zero in value. There were hundreds of different bank notes, so it was a real project to keep track!

Misfit · Post by **Misfit** » Thu January 27th, 2011, 1:25 pm

I forget the specifics and don't have the time to hunt it down now, but there was quite some scandal about banks and gold during US Grant's presidency.

annabel, the Southsea bubble is also a major part of the story in Karleen Koen's Through a Glass Darkly in you're interested in more.

annabel · Post by **annabel** » Thu January 27th, 2011, 5:32 pm

Interesting, Misfit.

It must have made traveling even more fraught. I imagine lots of people kept small items of gold to be sure of the value.

I never thought I'd find banks fascinating but when you realise the ripples that are cast by their actions you realise that they play a central role in modern society.

Just got a bit further on in The Devil's Horse and learning about joint stock companies - must have been a way of curtailing losses. Have to check on this.
I'll look up Through a Glass Darkly. Thanks.

Misfit · Post by **Misfit** » Thu January 27th, 2011, 6:16 pm

Slightly OT, but we oftentimes forget what an impact some things have on our lives. During the 911 crises when airplanes were shut down, the banks were in quite a pickle as the couriers couldn't get the checks to where they needed to go and money was seriously tied up and one of the reasons the Check 21 act became law and they started moving checks between banks electronically. At least that's how it was explained to me. You can read more on Wik and other sites.

Before Check-21, there was an entire sub-system to transport and handle checks. This sub-industry of transporting checks used airplanes, trains, cabs, delivery services, etc. Large banks had check scanning rooms, and check sorting rooms employing people. This sub-industry that employed many people, disappeared rapidly.

What still has us chuckling at times is even after the banks started moving funds electronically they will still hold a check on you if they darn well feel like it

Michy · Post by **Michy** » Thu January 27th, 2011, 6:46 pm

[quote=""annabel""]
I never thought I'd find banks fascinating but when you realise the ripples that are cast by their actions you realise that they play a central role in modern society.

[/quote] I find the history of banking quite fascinating. For instance, in one of Edward Rutherfurd's books -- I believe it was London -- he describes a scene several centuries ago where the monks in Westminster are administering and managing the Crown's coffers. It's been many years since I've read it, so my memory of the details is murky (I think I've got the characters and setting right, but I could be mistaken

), but one thing I specifically remember is the illustration of how the term "stocks" originated.

annis · Post by **annis** » Sat January 29th, 2011, 12:51 am

1667 is often claimed as the year of the first recorded run on a bank in the history of banking.

This article comes from Banking, Credits And Finance, a history by Thomas Herbert Russell which can be read on line.

The First Run on a Bank
http://chestofbooks.com/finance/banking ... -Bank.html

(This article does come with a list of preliminary ads which you need to scroll past to get to the good stuff)