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The Practicals Take A Hand (Part I)

Growth becomes a fact of life and bankers, on their own, invent central banking

Posted in 2007-08 Financial Crisis, History of economics, Uncategorized Tagged with: , , , , , , , , ,

Bankers who were Adam Smith’ contemporaries noted the political economist’s relative lack of curiosity about their business. They remembered the South Sea Bubble of 1720. They connected it with the experience of the Ayr Bank in 1772, as well as the other bank crises of 1745, 1763. They knew, too, that the British banking system was changing rapidly in the years after Wealth of Nations appeared, producing one innovation after another. The use of personal checks grew rapidly in replacing bank notes. Many more country banks were established in cities outside of London. A new institution, the London Clearing House,