THe roots of Modern Banking

Our modern economic and financial heritage begins with the coming of democratic capitalism, aroud the time of Adam Smith(1776).Under this system the does not intervence in economic affairs unnecessarily,removes barries to competition and subsidies ti favored persons ti allow competition to develop freely,and in general,does not prevent or discour age anyone willing to work hard enough-and who also has acces to capital--from becoming acapitalist.

Some 100 years after Adam Smith, England was at thc peak of its
power. Politically, it ruled 25% of the Earth's surface and population. Ihe
British economy was by far the strongest and most dcvdoped in the world.Its traditional competitors were still partly asleep. France was still sorting itself out after a century of political chaos and a war with Prussia that had
gone wrong. Germany was just starting to come togetlner politically but
still a had quite a way to go to catch up with the British in industrial terms.
The rest of Europe was not all that important. There was a potentialb
serious problem, however, from reckless and often irresponsible competi-
tion from America that fancied itself as a rising economic powen Other
wise, the horizon was comparatively free of competitors. British industry
and British finance were very secure in their respective positions of world
leadership in the 1870s.