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Hamburger Bank
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Hamburger Bank
The Hamburger Bank (lit. 'Bank of Hamburg') was a public credit institution founded in 1619 by the Free City of Hamburg. It issued a fully silver-backed currency known as the Mark Banco, which was used to stabilize trade and protect against debased coinage. It operated independently until 31 December 1875, when it became part of the newly created Reichsbank.
The Hamburg City Council made the decision to create the bank in February 1619, following lengthy negotiations with its civic stakeholders. It was intended to improve monetary stability in the context of the Kipper und Wipper episode of German monetary turmoil, and to simplify trade between merchants; its model was the Bank of Amsterdam which had been founded a decade earlier. The numerous English merchant adventurers, Portuguese Sephardi Jews and Dutch religious refugees living in Hamburg at the time brought their capital and knowledge to the bank, thus contributing to its initial success.
The bank was administered free of charge by two senators, two City elders (Oberalten), two "treasury citizens" (Kammereibürger) and five "bank citizens" (Bancobürger), namely citizens who had an account at the bank. This system of oversight by account holders and civic leaders helped maintain public trust and limited government interference. The bank's premises were in Hamburg City Hall. To open an account at the bank, one had to bring an initial amount of at least 400 Lübeck Marks. In addition, regulations were issued that prohibited bills of exchange and private trade in metallic money, and bills of exchange over 400 Lübeck Marks had to be processed through the Hamburger Bank.
On 20 November 1619, Lehnbanco was founded as a department of the Hamburger Bank. It gave loans against collateral to merchants as well as to the City of Hamburg itself. The Hamburger Bank was also assigned the municipal mint and the municipal grain warehouse, but these still had independently accounting. From 1725 to 1736, the Courantbank was set up as a subdivision of the Hamburger Bank, with the aim to counteract massive currency debasement at the time. Courant is an old word for currency and refers to coins whose precious metal content supports their value.
The Hamburger Bank held a reputation for good governance and integrity. It pursued conservative policies, refused to debase its currency, and prioritized security deposits over lending expansion. These principles are cited as early examples of sound money practices. German economist Paul Jacob Marperger described it as follows:
The world-famous bank, which is better than any bank in the world in terms of purity of its bank money, as it has conserved the old and just [...] Reichstaler and has not tolerated any inferior ones [...] The bank is run by agile and faithful people [...] The order and diligence with which they conduct their operations is admirable, and every day large sums are deposited and withdrawn in a more straightforward manner than with Italian banks. Whoever comes to the bank and asks for example what moneys have been transferred to his account on the previous day will be given clear answers.
— P.J. Marperger, Beschreibung der Banquen (1717), translated by Ulrich Bindseil
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Hamburger Bank
The Hamburger Bank (lit. 'Bank of Hamburg') was a public credit institution founded in 1619 by the Free City of Hamburg. It issued a fully silver-backed currency known as the Mark Banco, which was used to stabilize trade and protect against debased coinage. It operated independently until 31 December 1875, when it became part of the newly created Reichsbank.
The Hamburg City Council made the decision to create the bank in February 1619, following lengthy negotiations with its civic stakeholders. It was intended to improve monetary stability in the context of the Kipper und Wipper episode of German monetary turmoil, and to simplify trade between merchants; its model was the Bank of Amsterdam which had been founded a decade earlier. The numerous English merchant adventurers, Portuguese Sephardi Jews and Dutch religious refugees living in Hamburg at the time brought their capital and knowledge to the bank, thus contributing to its initial success.
The bank was administered free of charge by two senators, two City elders (Oberalten), two "treasury citizens" (Kammereibürger) and five "bank citizens" (Bancobürger), namely citizens who had an account at the bank. This system of oversight by account holders and civic leaders helped maintain public trust and limited government interference. The bank's premises were in Hamburg City Hall. To open an account at the bank, one had to bring an initial amount of at least 400 Lübeck Marks. In addition, regulations were issued that prohibited bills of exchange and private trade in metallic money, and bills of exchange over 400 Lübeck Marks had to be processed through the Hamburger Bank.
On 20 November 1619, Lehnbanco was founded as a department of the Hamburger Bank. It gave loans against collateral to merchants as well as to the City of Hamburg itself. The Hamburger Bank was also assigned the municipal mint and the municipal grain warehouse, but these still had independently accounting. From 1725 to 1736, the Courantbank was set up as a subdivision of the Hamburger Bank, with the aim to counteract massive currency debasement at the time. Courant is an old word for currency and refers to coins whose precious metal content supports their value.
The Hamburger Bank held a reputation for good governance and integrity. It pursued conservative policies, refused to debase its currency, and prioritized security deposits over lending expansion. These principles are cited as early examples of sound money practices. German economist Paul Jacob Marperger described it as follows:
The world-famous bank, which is better than any bank in the world in terms of purity of its bank money, as it has conserved the old and just [...] Reichstaler and has not tolerated any inferior ones [...] The bank is run by agile and faithful people [...] The order and diligence with which they conduct their operations is admirable, and every day large sums are deposited and withdrawn in a more straightforward manner than with Italian banks. Whoever comes to the bank and asks for example what moneys have been transferred to his account on the previous day will be given clear answers.
— P.J. Marperger, Beschreibung der Banquen (1717), translated by Ulrich Bindseil
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