Banking

Question 1

What were bills of exchange?

Answer 1

Agreement to pay an amount of money at a later date

Question 2

types of banking

Answer 2

• banking
• money scriveners
• goldsmith bankers

Question 3

banking

Answer 3

Before banking, goods were traded for cash or bartered for this led to the development of bills of exchange
pay on a future date, but interest was added

Question 4

changes in interest

Answer 4

The legal rate of interest changed throughout the 17th century, staring with 10% from 1571-1624 and then changing to 8% in 1624 and finally 6% in 1651.

Question 5

effects of changes in interest

Answer 5

The new rate of interest made credit more attractive and banks and brokers were needed to provide it. Because of the increase in demand for credit brokers established networks of contacts in London that could provide money.

Question 6

money scriveners

Answer 6

lend money, or arranged the lending of money for others, they may also invest money at interest of clients.
first firm; established in London in 1636, flourished in the 1650s

Question 7

goldsmith bankers

Answer 7

a goldsmith’s job was to forge items out of gold and silver for sale therefore they had secure private vaults for storage of precious metals
They would lend money they stored with interest

Question 8

how did the civil war affect goldsmith bankers and money scriveners

Answer 8

as a result of the civil war royalist landowners turned to London for loans to protect their assets as their land had been confiscated.

Charles seized gold merchants deposited in the royal mint in 1640 making storing valuables with goldsmiths a safer option