Annual Report 1995 - St. Louis Fed

Payments Evolution and Central Banking
A Time Line


Pre-history	In ancient times, payments were made through bartering, as in trading chickens for a cow.
1000 B.C.	To speed up and organize the payments process, ancient societies created commodities- items widely recognized as valuable that could be exchanged for goods and services. Coins became the most popular commodity.
13th Century	For expensive transactions over long distances- which wouldn't accommodate coins- the Chinese created paper money.
1609	The Bank of Amsterdam, considered the first public bank, was established to meet the expanding needs of Dutch merchants involved in international trade. The bank proved to be the forerunner of commercial banking.
1656	Sweden establishes the Stockholms Banco, recognized as a pioneering effort in central banking. The bank's managers were appointed by the government, and the Swedish Crown retained half its revenue.
1791	The first U.S. central bank was chartered to meet the demands of a growing national economy. But political pressures killed the Bank of the United States in 1811, when Congress defeated an extension of the bank's 20-year charter.
19th and Early 20th Centuries	Much of the nation experienced banking panics as banks were unable to meet the public's financial needs, and no entity existed to protect sound banks during a financial crisis.
1913	Congress passed the Federal Reserve Act, which established a central bank charged with regulating bank money and credit, supervising and regulating member banks and ensuring the integrity and efficiency of the nation's payments system.