=169. Description of the rise of discount and deposit banking in England.=—The history of banking is too large a topic to be considered here in detail. The early banks were marked by a number of individual peculiarities, and occupied often a public position as agents of the government; these points need not detain us. The development of ordinary commercial banking can be illustrated by the business of the London goldsmiths in the seventeenth century. The goldsmiths were required by the character of their stock to keep strong-boxes (“safes”), which served the purpose of a modern safe-deposit vault; and they united dealings in gold and silver coin with their original business. They were naturally the persons to whom a man would apply who wanted the means of keeping cash and other valuables more securely than was possible on his person or at his office or home; and thus they received in time considerable deposits from merchants and others. Probably they made some charge at first for the accommodation, but soon they were encouraging deposits by paying some interest, and by undertaking to perform services such as collection and remittance for their customers. They could afford to do this by reason of the fact that they did not let the cash lie idle in their vaults, but lent it to the government and to business men; they had become banks of discount and deposit. A tract published in 1676, entitled “The Mystery of the New fashioned Goldsmiths or Bankers,” gives this account of their operations. “Having thus got Money into their hands, they presumed upon some to come as fast as others was paid away, and upon that confidence of a running Cash (as they call it) they begun to accommodate men with moneys for Weeks and Moneths, upon extraordinary gratuities, and supply all necessitous Merchants that overtraded their Stock, with present Money for their Bills of Exchange, discounting sometimes double, perhaps treble interest for the time, as they found the Merchant more or less pinched.”