Object 32: Goldsmith's ledger, 1671-72
This ledger is part of a set of nine which comprise Britain's oldest surviving banking records. They come from a time before the birth of The Royal Bank of Scotland, or of any British bank as we know it. When this ledger was written, even the foundation of the Bank of England lay a generation in the future. Only the most basic banking services were available, and these were provided by London goldsmiths such as Edward Backwell.
Backwell was a pioneer, taking his business into a whole new area which would eventually lay the foundations of Britain's financial revolution. For Backwell himself, however, the ending was not happy. In 1672 he became part of another 'first', when his business was engulfed by Britain's first banking crisis.
| The city's goldsmiths soon became part of this growing financial network
In the 1660s London was the 4th largest city in the world. Thanks to its status as a hub of global trade, combined with its role as the seat of government, it had developed a relatively sophisticated money market. The city's goldsmiths soon became part of this growing financial network. Their businesses flourished as the development of international trade boosted available supplies of gold. From the early 17th century onwards, many of them branched out into accepting valuables for safekeeping in their vaults. They began to make payments on behalf of clients on the basis of the precious items lodged with them, thus gradually evolving into bankers. By the 1670s there were 44 such 'goldsmith bankers' in London.
Backwell himself started trading in 1654. By the 1660s he had a large clientele, including major corporations, such as the mighty East India Company, and private citizens, among them the famous diarist Samuel Pepys. He also had an extensive tax farming and overseas bullion business, and was a bankers' banker, keeping clearing accounts for other goldsmiths. His surviving ledgers thus throw rare light on the very earliest days of banking in Britain.
Life became tougher for Backwell in 1672. In that year, King Charles II decided to save some money by suspending all repayments on state debts for a year. Many of London's goldsmith-bankers, including Backwell, had large proportions of their assets invested in state funds, and this action effectively ruined them. The resulting crisis sent shockwaves through London society. 'I believe it certain', wrote one commentator, 'that the trade of bankers is totally destroyed by this accident'. Backwell's banking business, which had survived both the Great Plague and the Fire of London, was finished. He died 11 years later, having been formally declared bankrupt the previous year.