Goldsmiths are considered to be the forerunners of modern banks because they:
A)had safes to keep gold secure.
B)issued gold coins.
C)created money by lending out gold reserves.
D)created legal tender.
E)verified the quality of money.

Question

Quizplus · Accepted Answer

Goldsmiths created money by lending out their gold reserves, which is one of the main functions of modern banks. They did not issue legal tender, verify the quality of money, or have safes to keep gold secure as their primary function. While they did handle gold coins, it was not their primary function as a banker.

Goldsmiths Are Considered to Be the Forerunners of Modern Banks