From time immemorial there have been money changers.
These were men who, for a premium, calculated the value of currency received by a merchant dealing with foreign countries and exchanged it for domestic money.
Their business was conducted in some public place, such as the market place in Athens, the forum in Rome, or the temple in Jerusalem. There they set up a small table or bench for the convenience of their customers.
In later times, as in the cities of Florence and Venice, which were the chief trading centers of the Middle Ages, such a table or bench had the name banca, the source of “bank,” for these money-changers corresponded’ in some degree with our modern bankers.
Although the principal occupation was changing money, these men sometimes took money from wealthy patrons which, with their own, they lent to others at a profit, a rate of interest that would be considered usury now. But there was always a risk involved in such a loan, the borrower might lose his life, his goods, and his ship through some disaster.
A succession of such misfortunes could cause the failure of the banker, unable to repay his own creditors.
The laws of ancient Rome, though perhaps never exercised, permitted creditors actually to divide the body of a debtor into parts proportionate to their claims.
However, the penalty was less severe in the Middle Ages. The creditors of such a banker or his fellows in the market place merely broke up his table or bench, thus showing that he was no longer in business. This, in Florence, was designated banca rotta, broken bench.
Italian bankers of the sixteenth and seventeenth centuries carried this expression of business failure into England, but the Italian rotta gradually gave way to the Latin word for broken, ruptus, and banca rotta,” altered to banca rupta, became corrupted to our present term, bankrupt.
