\paperw3360 \margr0\margl0\ATXph16380 \plain \fs20 \f1 \fs22 In the 18th century the unit of account in England was the pound sterling. From the time of \b \cf4 \ATXht13111000 Q
ueen Elizabeth\b0 \cf0 \ATXht0 this had been identified with a fixed quantity of silver. However, the fact that silver bullion was worth more than the face value of silver coinage encouraged people to engage in the illegal practice of melting down coin
s to make a quick profit when selling bullion. There was thus a chronic shortage of coinage for paying wages and buying raw materials. This dearth of money had important social effects. Early in the century Manchester linen drapers and Rochdale clothi
ers who provided raw material and yarn to country manufacturers had to make payment in cloth. Moreover, some enterprising industrialists took to manufacturing their own token coins. However, a greater role was played by currency in other forms. The cr
eation of the National Debt at the end of the 17th century introduced securities bearing more or less fixed rates of interest. Some of these, including exchequer bills, navy bills and lottery tickets, could be used to settle accounts between individuals
. However, in 1720 Britain was hit by a financial crisis arising out of speculation generated by ParliamentÆs approval of the South Sea CompanyÆs proposal to take over the National Debt. When the South Sea Bubble burst, many investors were ruined. Oth
er forms of investment were provided by well-to-do goldsmiths equipped with safes and strong rooms who would give receipts for moneys lodged with them. Such notes passed from hand to hand, subject only to endorsement, thus effectively working as cheques
. By the mid-1700s, several private banks had been established and were growing in number. Some specialised in \ATXnt901 business with the aristocracy, the gentry and well-to-do lawyers\ATXnt0 , to whom they made loans on mortgages or bonds. Others co
ncentrated on loans to members of the Stock Exchange and discounting bills for traders and manufacturers. However, banking was slow to develop in Lancashire and the West Riding of Yorkshire, the most rapidly growing region of manufacture. This was beca
use the needs of local commerce were met by promissory notes and the bills of exchange, drawn by one manufacturer or trader on another.\par
