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CHAPTER 3 U.S. Banking from the Colonial Period to 1865

When they were created, courts in the several colonies that eventually became the United States adopted judicial precedents of English common law. U.S. constitutional and statutory law, however, is based on a fundamentally different concept of government. Under the English constitutional model, kings (and later parliaments) hold absolute authority, tempered by common-law principles of interpretation and a rather muddled early Anglo-Saxon concept of voting rights whereby the people (through representatives) elect kings as the need arises.

European feudal law, with its foundations in the civil codes of ancient Rome (adopted in France and through Charlemagne’s Holy Roman Empire), was introduced into English law when William the Conqueror invaded the British Isles and seized control in 1066. While he sought to ensure his own family’s succession to the British throne, William also embraced the Anglo-Saxon approach of electing officials as the means by which he could free himself from obligations owed under feudal law to the Norman lords who helped him conquer England. The interplay created by this bifurcated thinking generated constitutional debates in England that make for an entertaining and wonderful history, but one far too long and complex to repeat here.

The principle of rule by vote of the people of England was finally and firmly established when William III became king at the conclusion of the Glorious Revolution in ...