The authorities are not agreed as to the origin of the term "bank." Some trace it to the "banc" or bench where the early money changers kept their coins and plied their trade. Others claim that it is derived from "banck," the German name for a joint stock fund, which was converted by the Italians into "banco," meaning a heap or accumulation of money or stock.1 In colonial days in Massachusetts the issue of paper money was referred to as "raising a Banke," the word bank meaning the money rather than the institution which put it in circulation.

The modern banker, as has previously been shown, is primarily a dealer in credit. Originally he dealt in money, his business being to exchange one form of coin for another, both domestic and foreign. Early, however, the Athenian and Roman bankers began to receive deposits of money, to make loans, sometimes based on valuables, and even to transfer money and credits. "Traces of credit by eompensation and by transfer orders are found in Assyria, Phoenicia, and Egypt before the system attained full development in Greece and Rome. The books of the old Sanskrit lawgiver, Manu, are full of regulations governing credit. He speaks of judicial proceedings in which credit instruments were called for, of interest on loans, of bankers, usurers, and even of the renewal of commercial paper."1 Clay tablets in the British Museum taken from the ruins of Babylon show that as far back as the days of Nebuchadnezzar loans of silver at interest were made and loans secured by mortgage on land.

1 MacLeod: Theory of Credit, Bk. I, p. 315.

In Athens and Rome the banking business was brought under official regulation, and an expansion of its functions naturally resulted. As commerce developed the bankers were called upon to make remittances of money from place to place. Out of this grew the use of the foreign bill of exchange. Then in time as the convenience of this service appeared, merchants and others began to .deposit money and bullion with the money changers for safekeeping. So the business of the Argentarii, as the early Roman bankers were called, slowly evolved from that of mere money changing to the receiving of deposits, lending at interest, both their own money and that intrusted to them, dealing in bills of exchange, and other banking operations.

These private bankers of the mediaeval Italian cities were the forerunners of modern banking. Because of the prejudice of the Church at that time against lending money at interest on the ground that it was usury, the Jews had a monopoly of the business in the Dark Ages, and they have been prominent as bankers ever since. Several times they were expelled from the countries of Western Europe, and the business was taken up by merchants of Lombardy and others. These Lombards extended their operations to England, where they advanced large sums of money to the Plantagenet kings upon the security of the customs. When Edward III defaulted on his payments, owing vast sums to the Lombardy bankers, they became bankrupt, ruining many wealthy families of Florence and causing widespread distress in that city.2