John Law publishes "Money and Trade Considered"

After travelling widely on the Continent, Law returns to his native Scotland and publishes "Money and Trade Considered: With a Proposal for Supplying the Nation with Money". He argues that metallic money is unreliable in quality and quantity. Bank notes issued and managed by a public bank would remove the brakes on the economy.

John Law returns to France

His ideas were rejected in Britain but in France he gets the chance to put them into effect. Two years later, Law‘s bank becomes Banque Royale.

The Mississippi Bubble

The Mississippi Company had been set up to exploit the wealth of French colonies, especially in Louisiana. In 1719 it is also given a monopoly of trade with the East Indies and China and a speculative boom in the value of its shares ensues. The boom, combined with the over-issue of notes by the Banque Royale, leads to a drain of precious metals from France to London. Law is dismissed as Minister of Finance, the bank stops payment and the boom collapses. The debacle sets back the development of banking in France by about 100 years.

Contemporary with the Mississippi Bubble a speculative boom takes place in the shares of the South Sea Company, originally set up to break the Spanish monopoly of trade with Central and South America. The sudden collapse of the boom leads to changes in company law which affect the future development of banking.

Barings Bank founded

Royal Giro and Loan Band founded by Frederick the Great

This is Germany‘s first note issuing bank. It later becomes the Bank of Prussia and later still, the Reichsbank.

Benjamin Franklin fails to persuade British parliament to allow use of paper money in America

While in London Franklin tries unsuccessfully to persuade Parliament of the case for a general issue of colonial paper money.

The American Revolution or War of Independence

Adam Smith defends paper money

In his "Wealth of Nations" he draws attention to the benefits of paper money in stimulating business both in Scotland and in the American colonies.

Bank of New York and Bank of Massachusetts both open

Privately-issued tokens become common in Britain

By the end of the 18^th century there is a severe shortage of copper and silver coins in Britain so that many firms have difficulty in obtaining enough currency to pay wages. This leads to a growth in payment in kind, use of foreign coins, and unofficial tokens. The token manufacturers greatly expand the amount of currency available. beträchtlich.

The French Revolution

French Revolutionary and Napoleonic Wars

The pressures of war cause many changes in the financial system of Europe..

US-Coinage-Act

The dollar is introduced as standard.

Spanish dollars are overstamped for circulation in Britain

.The Spanish peso continues to be legal tender in the US until 1857.