History of Banking - Late 18th and 19th Centuries

Late 18th and 19th Centuries

In the late eighteenth and nineteenth century, spurred at first by financing required for the Napoleonic wars and then by the expansion of railroads, banks evolved for the first time to operate by way of commerce, that is to accept demand deposits and provide business loans, instead of only functioning for the good of the state. Before 1776 there were only three commercial banks on the landmass known then as America. During this period a large number of comercial banks were established in a number of different countries. This included banks such as the Commercial Bank of Scotland which was founded in 1810 and the Bank of New South Wales which was dated to 1817.

Jews were founders and leaders of many of the important early European banks, as well as significant banks in the United States. Several Jewish bankers became extremely influential, successfully competing with non-Jewish banking houses in the floating of government loans.