Some Pre-1800 French and German Central Bank Charters and Regulations

Abstract

In some recent studies, the question of the origins of central banking has been revisited, suggesting that beyond Swedish and British central banking, also a number of earlier European continental institutions would have played an important role. However, it has often been difficult to access the charters and regulations of these early central banks – in particular in English. This paper contributes to closing this gap by introducing and providing translations of some charters and regulations of six pre-1800 central banks in France and Germany, namely of the Nurnberg bank project of 1498, the Hamburger Bank of 1619, the Leipzig Bank of 1698, the Banque Generale of John Law of 1716, the Prussian Royal Bank of 1766, and the Caisse d’Escompte of 1776. In addition, the 1652 outline and motivation of the Stockholm Banco by Johan Palmstruch, which was written in German, is included as a key link between the continental and Swedish central banking history. The six early public banks were of heterogeneous success and duration, and qualify to a different degree as central bank. The texts in any case provide important insights into the genealogy, objectives and design of early central banks, providing further evidence of the role of institutions located in what would emerge in 1999 as the euro area. The Hamburger Bank balance sheet of 1619 can also be regarded as the oldest origin of today’s Eurosystem balance sheet, as it was transferred in 1875/1876 via the Prussian Bank into the Reichsbank, which itself made it, via the monetary disruptions of 1923/24 and 1945/48, eventually into the Bundesbank and therefore Eurosystem balance sheet. An overview table maps the articles of the early central banks’ charters and regulations into key central banking topics. To illustrate the universality of these topics over time, some key ECB legal provisions are also mapped into this table. The texts also provide evidence of the reliance of central banking on public legislation, and of the distinction between on one side the statutes and charters of the banks, from their more operational aspects which tend to be framed by separate rules and regulation. Finally, the texts provide evidence of the policy objectives of early central banks, including in particular monetary ones. To put the texts into context, the objectives, balance sheet structure, achievements and ending of each central bank are briefly summarized.