1. The word Bank originated in this way. In the year 1171 the City of Venice was at war with both the eastern and western Empires. The finances were in a state of great disorder; and the Great Council ordered a forced loan of 1 per cent. from every citizen, upon payment of interest at five per cent. Commissioners were appointed to manage the payment of the interest to the fund holders and the transfers of the Stock. Such a loan has several names in Italian, such as Compera, Mutuo, but the most usual is Monte, a joint stock fund. The citizens received Stock certificates in exchange for the sums they paid, bearing interest, which they might sell or transfer to any one else. The original loan was called the Monte Vecchio: afterwards two other similar Loans were contracted which were called the Monte Nuovo and Monte Nuovissimo.

At this period the Germans were masters of a great part of Italy ; and the German word Banck came to be used as well as its Italian equivalent Monte : and was Italianised into Banco; and the loans, or Public Debts, were called indifferently Monti or Banchi.

Thus an English writer Benbrigge in 1646 speaks of the "three Bankes of Venice" meaning the three public loans, or Monti.

So a recent eminent Italian writer, Count Cibrario, says - "Regarding the Theory of Credit which I have said was invented by the Italian cities, it is known that the first Bank (banco) or Public Debt was erected at Venice in 1171. In the

13th century Paper Money is mentioned at Milan: the credit was paid off. A Monte or Public Debt was established at Florence in 133G.

"At Genoa, during the wars of the 14th century, the Bank of St. George was established, formed of the creditors of the State."

So in Florio and Torriano's Italian Dictionary 1G59, it says - "Monte-a standing Bank or Mount of money, as they have in divers cities of Italy, namely in Rome or Genoa."

The Bank of Venice then was in reality the origin of the Funding System; or the system of Public Debts: it did not for many centuries do any of what we call banking business.

2. The meaning of the word Bank was the same in English when it was first introduced.

Thus Bacon says - "Let it be no Bank or common stock, but every man master of his own money."

So Gerard Malynes, a Mercantile writer in 1622, says - "In Italy there are Montes Pietatis, that is to say Mounts or Banks of Charity."

Benbrigge in his "Usura Accommodata" in 1646 says - "For their rescue may be collected Mons Pietatis sive Charitatis or Banke of Piety or Charity, as they of Trent fitly call it. Again for borrowers in trade for their supply as their occasion shall require; may be erected Mons Negotiationis or Banke of Trade".

In the time of Cromwell many proposals were made to erect Banks in London. A merchant writing in 1658 says - "A Bank is a number of sufficient men of estates and credit joined together in Joint Stock, being as it were the general cash keepers, or treasurers of that place where they settled, letting out imaginary money (i.e. Credit) at interest at £2 1/2 or £3 per cent, to tradesmen, or others that agree with them for the same, and making payment thereof by assignation, and passing each man's accouut from one to another with much facility and ease."

So Blackstone says - "At Florence in 1344, Government owed £60,000, and being unable to pay it, formed the principal into an aggregate sum, called metaphorically, a Mount or Bank."

The essential feature of all these "Banks" was that a number of persons placed their money in them and received in exchange for it, Credit, or a Promise to pay: which Credit they might transfer to any one else.

The Bank of England was formed in a similar manner of a company of persons who advanced a sum of money to Government, and received in exchange for it an Annuity. This was the foundation of our regular National Debt: and to the present day the Funds are Legally called "Bank Annuities."