How Banks Developed from Gold smith Established

Commercial banking began in England with the goldsmiths. who developed the practice of storing people’s gold and valuables for safekeeping. At first, such establishments were simply like baggage checkrooms or warehouses. Depositors left gold for safe  keeping and were given a receipt. Later they presented their receipt, paid a small fee for the safekeeping. and got back their gold.

The goldsmiths soon found it more convenient not to worry about.returning exactly the same piece of gold that each customer had left. Customers were. quite willing to accept any gold as long as it was equivalent in value to what they had deposited, This anonymity was important for it freed goddammit to rend the gold.

If the Goldsmith Bank were here today, its demand deposits would be part of the money supply; they would be -bank money. – However, the bank money just offsets the amount of ordinary money (go!t{or currency) placed in the bank’s safe and withdrawn from active circulation. No money creation has taken place. The process would be of no more interest than if the public decided to convert nickels into <limes. A 100 has a effect on the  no effect .

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