I was reading Money A History
edited by Jonathan Williams today for fun. This passage on 17th
century goldsmiths first lending against their gold deposits stood out (my emphasis in bold):
In 1676 an anonymous pamphlet was published on the Mystery of the New Fashioned Goldsmiths or Bankers. The writer deplored the goldsmiths’ move into the ‘unlawful practices’ of lending money at high rates of interest, claiming that they would charge double or treble interest for discounting bills of exchange, according to whether ‘they found The Merchant more or less pinched’. Such men surely could not be trusted, and the writer hoped that ‘people will suddenly come to their wits, and begin to examine why a Goldsmith-banker should be better Security than another man, or fitter to be trusted for ten times more than he is worth…
So the modern advent of paper lending initially received a great deal of backlash. Sound familiar?