Loans were made at various dates to the Dutch East India Company. In 1795 a report was issued showing that the city of Amsterdam was largely indebted to the bank, which held as security the obligations of the states of Holland and West Friesland. The debt was paid, but it was too late to revive the bank, and in 1820 "the establishment which for generations had held the leading place in European commerce ceased to exist." (See Chapters on the Theory and History of Banking, by Charles F. Dunbar, p. 105.)
Similar banks had been established in Middelburg, (March 28th, 1616), in Hamburg (1619) and in Rotterdam (February 9th, 1635). Of these the Bank of Hamburg carried on much the largest business and survived the longest. It was not till the 15th of February 1873 that its existence was closed by the act of the German parliament which decreed that Germany should possess a gold standard, and thus removed those conditions of the local medium of exchange - silver coins of very different intrinsic values - whose circulation had provided an ample field for the operations of the bank. The business of the Bank of Hamburg had been conducted in absolute accordance with the regulations under which it was founded.
The exchange banks were established to remedy the inconvenience to which merchants were subject through the uncertain value of the currency of other countries in reference to that of the city where the exchange bank carried on its business. The following quotation from Notes on Banking, written in 1873, explains the method of operation in Hamburg. "In this city, the most vigorous offshoot of the once powerful Hansa, the latest representative of the free commercial cities of medieval Europe, there still remains a representative of those older banks which were once of the highest importance in commercial affairs. Similar institutions greatly aided the prosperity of Venice, Genoa, Amsterdam and Nuremberg. The Bank of Hamburg is now the last survivor of these banks, whose business lay in the assistance of commerce, not by loans, but by the local manufacture, so to speak, of an international coinage. In a city of the highest rank of commercial activity, but greatly circumscribed in territory, continually receiving payments for merchandise in the coin of other countries, a common standard of value was a matter of primary necessity.
The invention of bank money, that is, of a money of account which could be transferred at pleasure from one holder to another, enabled the trade of the place to be carried on without any of those hindrances to business which must have followed on the delay and expense attendant on the verification of various coins differing from each other in weight, intrinsic value, standard of purity of metal, in every point in fact in which coins can differ from each other. By supplying a currency of universal acceptation the Bank of Hamburg greatly contributed to the prosperity of that city." The regulations being strictly carried out, the currency was purely metallic; the "Mark Banco" being merely the representative of an equal value of silver.
For the earliest example of a bank for the receipt of deposits carrying on a business on modern lines, we must turn, as in the case of the exchange banks, to a great commercial city of the middle ages. Private banking in Venice began as an adjunct of the business of the campsores or dealers in foreign moneys. "As early as 1270 it was deemed necessary to require them to give security to the government as the condition of carrying on their business, but it is not shown that they were then receiving deposits. In an act of the 24th of September 1318, however, entitled Bancherii scriptae dent plegiarias consulibus, the receipt of deposits by the campsores is recognized as an existing practice, and provision is made for better security for the depositors." From this act it becomes clear that between 1270 and 1318 the money-changers of Venice were becoming bankers, just as the same class of men became in Amsterdam a couple of centuries later, and as later still the goldsmiths in London.
Of the early banks in Europe, the bank in Venice, the Banco The first public bank in Europe. di Rialto, was established by the acts of the Venetian senate of 1584 and 1587. This appears to have been the first public bank in that city and in Europe. The senate by the act of the 3rd of May 1619 established by the side of the Banco di Rialto a second public bank known as the Banco Giro, or Banco del Giro, which ultimately became the only public bank of the city and was for generations famous throughout Europe as the Bank of Venice. Earlier than this the campsores or dealers in foreign moneys had carried on the business. The Bank of Venice (Banco del Giro) appears to have been called into existence by the natural developments of trade, but some banks have been established by governments and have been of great service to the development of the countries in which they have carried on their business. Of these, the Bank of Sweden (the Riksbank), established in 1656, is the earliest. This bank still exists and has always been the state bank of Sweden. It was founded by a Swede named Palmstruck, who also invented the use of the bank note - perhaps adapted for use in Europe is the better expression to employ, as notes were current in China about A.D. 800. The first bank note was issued by the Riksbank in 1658. An enquête made by the French government in 1729 recognizes the priority of Sweden in this matter, and declares the bank note to be an admirable Swedish invention, designed to facilitate commerce.