development until, in 1401, by the consolidation of the business of a large number of bankers of Barcelona into a public bank under the auspices of the government, the Bank of Barcelona was founded. It was a bank for both deposit and discount and the property of the city was pledged as security for the depositors.
EUROPEAN BANKING
3. Italy.—It is not the purpose to present, in detail, the organization and development of European banks nor to devote much space to the manner in which the business was conducted, but only to mention the principal ones and the circumstances that led to their formation.
Professor MacLeod, in his "Theory and Practice of Banking," states that the first public bank to conduct a banking business in the general acceptance of the term was organized in Italy and called the Banco di A. G. P. et di Pieta. This bank was established in 1575 by the government of Italy and was in business 12 years previous to the acceptance of public deposits by the Bank of Venice. Several other joint-stock public banks were organized shortly afterwards, and their popularity resulted in the discontinuance of the banking business by private bankers for quite a period. It is not known whether or not these public banks survived the Revolution.
The Bank of Venice, which was the first established bank in Europe, was formed in 1157 A. D., but for four centuries it was little more than an organized body managing the public debt of Italy. It became a public bank in 1587, as a result of the large number of failures of private bankers, many of whom were members of the nobility. The commissioners of the public debt invited deposits from merchants, giving in exchange a credit on the bank's books equal to the value of the bullion deposited. Although the bank did no commercial business, some years later its officials used the bullion for other purposes than that of paying its depositors, and several times during the 17th and 18th
