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Christian Dinesen

Absent Management in Banking

How Banks Fail and Cause Financial Crisis
Christian Dinesen
Dinesen Associates Ltd., London, UK

ISBN 978-3-030-35823-5 e-ISBN 978-3-030-35824-2

https://doi.org/10.1007/978-3-030-35824-2

© The Editor(s) (if applicable) and The Author(s), under exclusive

license to Springer Nature Switzerland AG 2020

This work is subject to copyright. All rights are solely and exclusively
licensed by the Publisher, whether the whole or part of the material is
concerned, specifically the rights of translation, reprinting, reuse of
illustrations, recitation, broadcasting, reproduction on microfilms or in
any other physical way, and transmission or information storage and
retrieval, electronic adaptation, computer software, or by similar or
dissimilar methodology now known or hereafter developed.

The use of general descriptive names, registered names, trademarks,

service marks, etc. in this publication does not imply, even in the
absence of a specific statement, that such names are exempt from the
relevant protective laws and regulations and therefore free for general
use.

The publisher, the authors and the editors are safe to assume that the
advice and information in this book are believed to be true and accurate
at the date of publication. Neither the publisher nor the authors or the
editors give a warranty, expressed or implied, with respect to the
material contained herein or for any errors or omissions that may have
been made. The publisher remains neutral with regard to jurisdictional
claims in published maps and institutional affiliations.

Cover illustration: © Sean Gladwell / Moment / Getty Images

This Palgrave Macmillan imprint is published by the registered
company Springer Nature Switzerland AG.
The registered company address is: Gewerbestrasse 11, 6330 Cham,
Switzerland
Acknowledgements
My sincere thanks and gratitude go to all those whose valuable material
has formed the platform for this book, including historians, journalists
and business school academics. The latter’s case studies provided both
a rich and innovative source, that I highly recommend.
Dr. Tim Leunig was a constructive supervisor at the London School
of Economics and Political Science (LSE). At the LSE Programme
Manager Tracy Keefe guided me through the return to academia,
Professor Albrecht Ritschl made valuable introductions and Dr. Peter
Cirenza exemplified how to bridge investment banking and academia.
Associate Professor Gianpiero Petriglieri, Organisational Behaviour,
INSEAD encouraged me to write a book.
Niall Ferguson, senior fellow of the Hoover Institution, Stanford, and
the Center for European Studies, Harvard, deserves special thanks for
his suggestion to use business school case studies as a source for the
history of management in banking, in addition to his own work on the
Rothschilds and Siegmund Warburg. His invitation to Harvard Business
School, where I read the first business school case studies and
discussed initial findings, was both seminal and highly motivational.
The staff at the Harvard Business School Library expertly and
emphatically guided me.
Leif Hö egh provided shelter and was an insightful sounding board,
Charles Aldington gave encouragement, John Smith installed confidence
and Torleif Hoppe shared his successful experiences of how and when
to write.
Tula Weis and Lucy Kidwell of Palgrave Macmillan expertly and
enthusiastically guided me through the publishing process.
Most importantly Dr. Emily Mayhew provided deep insight into
writing, inspiration and loving support to make me as good as I can be.
Contents
1 Introduction:​Not Managed at All—How the Idea for This Book
Occurred and What It Is About
2 The Medici and Renaissance Complexity:​How the Challenges of
Renaissance Banking Finally Defeated the First Multinational
Bank
3 Rothschild, the Largest Bank in the World:​How Multinational
Family Ownership Overcame Nearly All Management Complexities
When Others Failed
4 Less Regulation Means Greater Complexity:​How Looser Bank
Regulation Allowed Faster Growth, Greater Complexity and
Contributed to Absent Management in Banking
5 Complexity from Growth:​Territory and Size—How Absent
Management Occurred Through Growth by State, Country and
Sheer Size
6 Complexity from Growth in Lines of Business:​How Absent
Management Occurred When Different Types of Banking Were
Merged
7 The Absence of Incentives to Manage:​How the Wrong Incentives
Resulted in Absent Management
8 Producer Managers:​How Continued Focus on Banking Resulted
in Absent Management
9 Bank Failures Cause Crisis:​How Absent Management in Banks
Can Cause a Crisis
10 Bank Failure:​Triggering Crisis—How Absent Management in
Banks Triggered the 2008 Financial Crisis
11 Bank Failures Cause a Global Crisis:​How the Complexities of
United States Mortgage Securities Devastated Banks and Made the
Banking Crises Global
12 The Cost of Financial Crisis:​How Absent Management in
Banking Became Costly
13 What Has Changed:​How Little Has Changed in Terms of
Complexity, Producer Managers and Absent Management in
Banking
14 Conclusion
Index
© The Author(s) 2020
C. Dinesen, Absent Management in Banking
https://doi.org/10.1007/978-3-030-35824-2_1
1. Introduction: Not Managed at All—
How the Idea for This Book Occurred
and What It Is About
Christian Dinesen1
(1) Dinesen Associates Ltd., London, UK

Christian Dinesen
Email: Christian@dinesen-associates.com

Keywords Banking – Management – History – Incentives – Producer

Manager

The idea for this book came on the back of the losses incurred by large
investment banks in 2008. One investment bank announced a quarterly
loss of $14 billion as part of its full-year 2007 results. This was only one
quarter of the $52 billion United States investment bank Merrill Lynch
was to lose on United States mortgages. It seemed impossible to
manage so badly as to incur a loss of this magnitude. Surely nobody
would do this. If nobody would manage that badly, this pointed to
another possibility. Some banks were simply not managed at all.
This book is about management in banking and particularly about
absent management in banking. Bank customers, shareholders and
regulators have assumed that banks are always managed. Banks have
been assumed to be no different than other large commercial
organisations, such as manufactures and retailers, in having a
management that sets strategy, implements this and holds itself
accountable to its owners and other stakeholders. Like other
commercial organisations, some banks are assumed to be managed
well, others badly, with the quality of management being subject to
change over time.
 But banks are different. They developed with a different approach
to management historically, with banking being the top priority and
much more important than management. For centuries banking was
almost everything that was required. Only a few early banks grew
complex enough to require management. Two of these are the subjects
of the early chapters. Some banks developed by size and complexity
and prospered, at least for a time. When some banks grew very large
and complex, they lacked the historical development of management of
other commercial organisations, such as railways and car
manufacturers. Some banks learned and borrowed management from
other commercial organisations.
Banks are also different in that they found it difficult to develop and
change incentives to reward management as much as banking was
rewarded. After five centuries of banking, many bankers had a way of
doing things. They found it difficult, sometimes impossible, to change
even when the banks themselves changed enormously, in both size and
complexity. And these changes in size and complexity transformed the
need for management. At times, this transformation was ahead of the
development of management and resulted in absent management.
When banks are not managed, this makes them much more likely to
fail. Bank failure has serious consequences. If some banks are not
managed, this has implications for customers who have their money
deposited with the banks or who depend on future bank borrowing for
their lives and businesses. A failing bank can also have serious
consequences for other banks with whom it may do business including
borrowing money. A bank failing can cause suspicion that other banks
may also be in trouble and subject to failure. This is because banks base
their business on trust. For customers to deposit money with a bank
they must trust the bank to be able to pay these deposits back. If one
bank fails, the trusts in the banking system may be undermined. A bank
failing can have serious consequences for a government. If the bank is
so large that its failure threatens the stability of a country’s financial
system, the government may need to rescue the bank. Such a rescue can
be extremely costly to the extent that it affects the government’s
finances. One or several bank failures can require a government to raise
additional funds, through increased borrowing and taxation or reduced
expenditure or all three.
 This book is about absent management in banking, but that is not
meant to imply that there is no management in banking. There is
currently little sympathy for banks amongst the rest of society. This is
unsurprising given the devastation caused by the recent financial crisis
where banks are seen as one or the main culprits. However, there
always have been, and continues to be, many managers in many banks
who ensure that the crucial function of banking makes its indispensable
contribution to modern society. No banks are completely without any
management. This book is about the partial absence of management in
some of the most important banks as well as in some less important
banks. Because banking is based on the trust of its customers and
because banks are increasingly interconnected, any partial absent
management that causes a bank to fail can have serious consequences
for customers, other banks and governments. Any absent management
in a bank can contribute to, and sometimes cause, a financial crisis.
Many questions have been asked regarding how banks failed and
caused the most recent 2008 financial crisis. Few questions have been
asked regarding why some banks did not fail and did not cause the
crisis. There is only one difference between individual banks and that is
the people who have managed them in the past and who manage them
now. Individual banks succeed or fail because of the people who
manage them. Individual banks are in the business lines they are in, the
locations they are in, have the brands and culture they have and so on,
because of the people who ran them in the past and who run them now.
The managers and only the managers have made one bank different
from another. External forces, including economic conditions and
regulation, heavily influence the destiny of banks. At times, this
influence is completely beyond the control of the banks. But it is the
people, and particularly the most senior people in the bank, who decide
to establish a bank in the first place and subsequently decide in which
lines of business, in which countries and how the bank should operate.
Unlike the British soldiers in the First World War who 100 years ago
sang, “We’re here, because we’re here”, and often had little or no choice
in the matter, banks are where they are because of their managers, past
and present. In an interview with the Financial Times in Japan in 2007,
just as problems in the United States mortgage market were beginning
to cause a wider market crisis, the chief executive officer of Citi, one of
the largest banks in the United States and in the world, said: “When the
music stops, in terms of liquidity , things will be complicated. But as long
as the music is playing, you’ve got to get up and dance. We’re still
dancing” (Nakamoto and Wighton 2007). Dancing simply because the
music is playing is not good or bad management. It is absent
management.
So this book is about the banks that were not managed. It is less
about the banks that were well run, did not fail and cause a crisis and
did not need rescuing. These managed banks are, however, now
enduring significantly increased regulation and much reduced
reputations, due to their unmanaged competitors.
All bulls are dangerous; it is just that some bulls are more
dangerous than others. So it is with banks. All banks are complex; it is
just that some banks are more complex than others. And all banks are
dangerous. Even a run on the deposits of a small bank, where
depositors fear for the safety of their savings, has the potential to cause
a wide panic and a banking crisis. However, there are some banks that
are significantly more dangerous than others. These very dangerous
banks are now known as Systemically Important. They used to be
known as ‘too big to fail’, but when they failed, the term was changed.
They nearly all show some instances of absent management. By mid-
2017, banks in the United States had paid fines of over $150 billion
related to the 2008 financial crisis. And banks continue to commit acts
today, resulting in large fines. If a bank continues to incur fines of
hundreds of millions even billions of dollars, pounds, euros and so
forth, it is sometimes not because the bank is badly managed, it is
because it is not managed at all.
Management is one of those activities that is so well known that it is
possibly not necessary to define it. Most of us have worked for or been
subject to an organisation, public or private, with some level of
management. Perhaps the first time we encountered management was
when we first attended school and became aware of a headmistress or
headmaster. Most employees have a manager and so do most managers.
The earliest use of the word appears to relate to the Latin manus or
hand and the French main and coming to us through the French manège
, which in English can mean an area where horses (and riders) are
trained or handled. In other languages, manège is now used to describe
the performance circle in a circus. ‘I will handle this’ is close to ‘I will
manage this’.
In this book, management involves deciding on objectives and a
strategy, on how to achieve these including the risks involved, the
strategy’s implementation and monitoring as well as accountability.
Management requires thinking, planning and delegation. It is very
much about handling or managing people. However, and most
importantly, management is not about producing, and it is not lending,
trading, analysing and all the many other production activities in a
bank. This distinction is central to absent management in banking. It is
often the doing, the lending, trading and so forth that people in banks
want to do. Most bankers want to be producers, not managers. But
when bankers are recognised internally as good, successful and
profitable producers, they are often then promoted to managers. The
cowboy who herds the most cattle becomes the head honcho; the best
saleswoman becomes head of sales or sales manager.
However, bankers often remain producers while they manage and
hardly any become full-time managers. This was how it was from the
very first banks, which were simple, one location operations and just
required a banker or two and no full-time, specialist managers. Most
heads of large banks still meet clients. Some retain an active producing
role, typically in retaining key clients and acquiring new ones. Buying
or merging with other banks mostly involves top management because
it is important. But it is really a type of production because it is nearly
always about growth. Due to the continuing producer role, and its
associated skills, rewards and status, the banker has less time, energy
or interest in management, and at times none at all.
Sometime in the last ten years, the term ‘management’ has been
replaced by ‘leadership’, in business schools, academia, the media and
banks. This is a dangerous, semantic fashion. Leaders lead, and we
remember brave example of leadership as we have just commemorated
the centenary anniversary of the brave officers and sergeants who lead
their men over the top of the First World War trenches. The managers
then were the most senior officers, the generals and the politicians,
democratic or despotic. Much, but not all, of their management was
terrible, ending in long stalemates with catastrophic casualties and
suffering. There was some exceptional management in the First World
War, such as the medical services and supply lines, but much of it was
terrible. However, the management was not absent, and it was not just
leadership, however brave. The tendency to talk about leadership
rather than management is attractive to bankers, some of whom are
military history buffs, but it does a disservice to management and to
war. Only war is war, however much investment bankers and traders
would like to see themselves as being in the trenches. And management
needs thinking and planning and discussion, which can take a long time
and be tedious. In banking, management rarely receives the rewards
and status of a producer winning a battle for a client or a profitable
trade.
During the last ten years, many books were written about the 2008
financial crisis. As this is a history book, there was no particular rush to
write it. By waiting ten years the book would hopefully benefit from the
extensive research being carried out immediately after the latest
financial crisis and also enable more of a historical approach. If
evidence could be found that banks are not managed, the approach
would be to try and answer one of the basic historical questions of how
we got to a situation of absent management in banking.
This book was not a management consultancy presentation in a
former life. There will be no charts. Actually there will be one chart, as
an exception to prove the rule that there will be no charts. But it is a
really good chart.
It is sadly not possible to write any book about banks without some
figures. There were two figures in the first paragraph. However the
figures have been kept to a minimum, and there are no tables of figures,
not even one to prove the rule that there are no tables of figures.
What this book aims to do is to explain why complexity caused
absent management. Without complexity in banking there is no need
for management. So it is important to explain complexity. One of the
approaches to explaining complexity will be to explain the jargon and
abbreviations that hide complexity behind them. And it is important to
avoid using multiple and endless abbreviations that make those not
familiar with these abbreviations feel like uninformed outsiders.
The board of directors of some banks were guilty of absent
management because they did not understand what their bank was
doing. When they complained that it was impossible to foresee the
events that caused their bank to fail, this was all too often a case of not
understanding what the bank was doing in the first place. However
there were nearly always other banks doing similar things whose
management understood what the bank was doing, managed it and
kept the bank from failing. Without understanding there is no
management. So this book will aim to explain complexity. These
explanations may be simplistic to some bankers but given that the
complexities caused some banks to fail, explaining complexity is
necessary.
This book takes several approaches to establishing absent
management in banking, including economic history, management
consultancy and working experience within banking. Economic history
is helpful to establish how management in banks developed, and
developed differently from other commercial organisations, and for
some concepts such as path dependency. Management consultancy
enables the use of business school case studies and consideration of
some management concepts such as producer manager and tools such
as incentives.
Practical experience is of limited value by itself. Enough war stories
have been told about the recent financial crisis but they have not
provided enough insight into how banks fail and cause crises. Practical
experience is too subjective and limited to one person’s impressions
and recollections. Practical experience only adds value when combined
with other approaches, in this book, with economic history and
management consultancy. It is this combination of different approaches
that gave rise to the idea of absent management. Working as a former
management consultant in an investment bank, I should have been able
to tell what was wrong with the management to cause this literally
unbelievable level of losses. Determining what was wrong with the
management and making suggestions for how to improve it was how I
had made my living for ten years before joining an investment bank.
The only possibility I could come up with for not being able to tell what
was wrong with the management, apart from my own inadequacies as a
management consultant, was that perhaps there was no management
at all. Because the results were so bad that it was not possible to
imagine that anyone would manage that badly.
 Once the possibility of absent management occurred, the first
question I wanted to answer was the historical question of how we got
to this position of no management. Economic history had an answer,
but not amongst its traditional sources. Business school case studies
were suggested as a source by the eminent historian, Niall Ferguson. He
believed I could use business school case studies for economic history
because of my management consultancy background.
Combining different approaches carries the risk of not satisfying
any of the three approaches. This book may not be academic enough for
some economic historians and perhaps not practical enough for some
management consultants. Some bankers will search in vain for the
names of contemporary senior bankers who they may have worked
with.
This book is about absent management, not the absence of
managers. The bankers have been referred to as the chief executive
officer, senior manager or Board of this or that bank, not by their
names, at least if they are still alive. The reason for this omission of
names is that absent management was the historical result of how
management developed in banks. This development, combined with the
increased complexity of banks, caused instances of absent
management. Absent management is an institutional failure. It is not
about individual bankers, and their names are therefore not in the text.
The names can be found in the sources for those interested. There are
many biographies and media writings about these individuals. Some
individual traders and investors are mentioned by name, but they are
not bank managers.
The sources for this book are deliberately wide-ranging and
hopefully somewhat innovative. Historical biographies on bankers and
banks have interesting application for additional research on bank
management. Examples are an excellent, painstakingly researched book
by Raymond de Roover on the Medici Bank, Niall Ferguson’s
biographies of the Rothschilds and Siegmund Warburg, plus a
multitude of others. Philip Auger has written insightfully, and
entertainingly, about banking in the United Kingdom. Carmen Reinhart
and Kenneth Rogoff remain the leaders on historical banking crises,
with more recent additions particularly from Financial Times
journalists.
 The development of management in banks has received little focus
by economic historians compared to the focus on management in
industry. It is not clear what the reasons are. The economic history
focus on management in the 1960s had waned by the 1980s when
banks had grown into multidivisional and multinational organisations,
and their management should have been of greater interest. So for this
book there was a need to look elsewhere than traditional economic
history for an answer to how we got here. The suggestion of using
business school case studies as sources for this book will hopefully be
seen as having proven useful.
The business school case studies were all produced for educational
purposes and intended as the subjects of class discussions. The case
studies describe a situation in a bank, supported by interviews,
organisational charts and financial information. Many but not all were
from Harvard Business School, the pioneer of the case study
educational method. The authors are mainly business school
academics, although some received assistance from management
consultants and the banks themselves. Interviews were a central part of
the preparation of many of the case studies. Case studies are
specifically stated as not representing best practice. They are not
intended to be either positive or negative in their approach, but to
record a business situation. Consequently, and importantly, the cases
used for this book were selected for their relevance and illustration of
bank management and not for their support or contradiction of absent
management in banking. Nowhere in the case studies was this term or
concept found. This makes the case studies objective as far as this book
is concerned.
Business school case studies were found to be both valid and
powerful as historical sources. Case studies used in this way document
a historical record beyond the educational uses for which they were
originally produced. Of the 25,000+ available case studies from Harvard
Business Publishing, 1700+ relate to banks, finance and insurance with
the first describing a situation in 1970 (Harvard Business Publishing
2019); 68 case studies were used for this book based on their focus on
banks’ management, including issues such as organisation, strategy,
incentives and crises. For any readers of this book interested in further
reading, business school case studies are highly recommended.
 Once a historical approach is adopted business school case studies
are a rich, even entertaining, and certainly highly informative source.
One story that emerges is how banks became increasingly complex to
manage. Reduced regulation since the 1970s, combined with increased
globalisation and multiple mergers and acquisitions, resulted in banks
of such vastly increased size and complexity that absent management
of some of them, some of the time, becomes perhaps not inevitable but
understandable.
If using business school case studies as a source for economic
history involves a degree of novelty, the godfather of management
history, Alfred Chandler, would have been comfortable with this
approach when writing his own case studies on industry such as Du
Pont and General Motors in 1962. Alfred Chandler stands out as the
first leading thinker on the role of management in economic history
terms. His approach to management was partly based on case studies in
the United States in the interwar years. However, his focus does not
include financial companies. Chandler places managers, who he calls
administrators,1 at the centre of his thinking:- “While the enterprise may
have a life of its own, its present health and future growth surely depend
on the individuals who guide its activities….They coordinate, appraise
and plan”. His argument is then developed by making the point that
administration [management] becomes a specialist, full-time job. This
is an important distinction from financial services where senior
managers often retain a production capability, for example, as bank
branch manager spending part of his or her time seeing customers, or
as a trader of equities or bonds or an investment banker. In Chandler’s
examples, the role of managers is solely management. Alfred Sloan of
General Motors, Chandler’s outstanding example of the successful
multidivisional manager, neither made nor sold General Motors cars
(Chandler 1962).
Importantly, Chandler recognises the need for the manager to have
two different time horizons. “At times he must be concerned with the
long-run health of the company, at other times with its smooth and
efficient day-to-day operation.”2 This is a valuable recognition of the role
of the manager and differs from most others in the firm who are solely
concerned with the day-to-day operation. Compared to a purely
professional manager, it is likely to be particularly complex and
challenging for a producer manager to carry out both these tasks and
have two time horizons.
The leading, institutional economic historian and Nobel Laureate
Douglass North determined a helpful link between the organisation and
its purpose and role within society: “organisations as purposive entities
designed by their creators to maximize wealth, income, or other
objectives defined by the opportunities afforded by the institutional
structure of the society” (North 1990). North’s point is particularly
helpful in highlighting the relationship between financial firms and
regulators, the latter setting the parameters of opportunities. According
to North, organisations will do what regulations permit. Sometimes
they will do more, as the billions of dollars of fines imposed on banks
evidence.
North also addresses the design of organisations and links these to
what their creators are aiming for. This would indicate that the
organisation’s structure and development should reflect how
management is incentivised. North provides an interesting definition of
the tasks of management which-“are to devise and discover markets and
techniques, to evaluate products and product techniques and to manage
actively the activity of employees ” (North 1990). The issue of a
management time horizon different from the day-to-day, with
management having a strategic role, appears to be missing from this
definition. He does however also say “short-run efforts at profit
maximisation may result in the pursuit of persistently in-efficient
activities” (North 1990). This would indicate a need for both a short-
and longer-term view to ensure that short-termism does not result in
long-term inefficiency.
Incentives are one of the concepts that will be addressed as part of
explaining absent management. It will be addressed historically from
the organisation of the Medici Branch network in the fifteenth to the
present day. North is particularly succinct on incentives, of which he
says that “Incentives are the underlying determinants of economic
performance” (North 1990). There is a vast literature on incentives, but
for bank management this definition serves well. It accurately reflects
the ‘money culture’ mentioned in several of the case studies and which I
experienced. It is somewhat simplistic but the conclusion from North’s
definition, the case studies and my experience is that in banks people
do what they are paid to do, more or less.
Path dependency is a concept mostly associated with technology. An
earlier definition from some of the academic leaders in the field of
technological path dependence is helpful:- “The claim for path
dependence is that a minor or fleeting advantage or a seemingly
inconsequential lead for some technology, product, or standard can have
important and irreversible influences on the ultimate market allocation
of resources, even in a world characterized by voluntary decisions and
individually maximizing behaviour” (Liebowitz and Margolis 2000). The
classic path-dependent product is the QWERTY keyboard. You may
have one in your hand if you are reading this on a mobile devise.
However, evidencing path dependency in management behaviour is
more challenging than in the more established area of technology
hardware. The establishment of bonus schemes, designed to promote
growth, and thereby an advantage, had important and irreversible
consequences. The consequences were that the incentive schemes
promoted growth but not risk management due to a lack of downside
for the employees. The schemes became irreversible because banks
found it impossible not to pay bonuses, due to the fear of impact on
morale and talent retention. Evidence of behavioural path dependence
is also evidence of an underdevelopment of management. If behaviour
in an organisation, however well-intended initially, becomes
detrimental to the objectives of the business, but is not changed, then
management is not carrying out its functions and may even be absent.
The banks considered will primarily be United States, United
Kingdom and European banks, partly because they play a dominant
role in global finance, and partly because they were central to the
recent financial crisis, epitomised by the collapse of Lehman Brothers
in September 2008. Large, multinational or global banks will be central
to this book for the same two reasons. The first two banks considered
were both multinational but were originally based in Florence (the
Medici) and Frankfurt (the Rothschilds).
This book is aimed at students of banking, finance, management and
crisis. Hopefully, it will also be of interest to everyone who is or were
customers, employees, shareholders or other stakeholders of banks, as
well as those who have suffered the effects of financial crises. That is a
very large group, and it is therefore ambitious to hope that individuals
from such a large group will be interested in a book that may be
categorised under the not universally appealing subject titles of
banking, finance, management, crisis and economic history.
To achieve this ambition, this book will tell the history of absent
management in banking to try and answer the question of how we got
to such a position. This history will start with an early bank, that of the
Medici in Renaissance Italy, and go on to look at the Rothschilds’ long
tenure in the eighteenth, nineteenth and early twentieth centuries.
Regulation plays an important role in the history of banking from
the early days, including for the Medici, then particularly after the Great
Depression in the 1930s. Regulation was fairly unchanged until the
early 1970s from when a loosening allowed banks to grow in size and
complexity. It is this increased size and complexity that makes greater
demands on management. It is also where the first distinct evidence of
a modern absent management emerges. So loosening regulation and
the growth of banks are highly interdependent.
Loosening regulation allowed banks to grow in two main ways, by
territory and by line of business and sometimes both. This growth often
took place through mergers and acquisitions, perhaps the most
challenging and complex activity of any business, due to the unknowns
involved in buying and the complexity of integrating another business.
Whether by territory or line of business, growth made banks larger and
more complex. And the more complex the banks became the greater the
need for management. And given that the speed of growth was
explosive, it became hard and sometimes impossible for management
to keep up with the increased complexity. Sometimes complexity
increased at such a rate that the management was unable to keep up
and this resulted in absent management.
The role and history of incentives and how we got to the much
reviled bankers’ bonuses is important. Incentives were plentiful,
sometimes so plentiful that the recipients became unmanageable
because they had become so rich, so quickly that they were beyond
both incentives and management. Neither the possibility of further
riches nor discontinuing of employment had any effect, so these
individuals became unmanageable . Incentives were also often directed
towards increased production rather than management including the
associated risks. This created a dangerous imbalance that was difficult,
sometimes impossible, to manage.
The dual producer manager role, where the most successful
bankers often end up, supposedly, managing the bank, is central to why
management in banks falls short. Many banks promote the biggest
producers into management positions. However, they are rarely, if ever,
either trained or remunerated for their management. This approach
contributes to absent management.
Following regulation, growth, incentives and producer managers,
the next part of the book then delves into the rich sources of business
school case studies for examples of absent management. The growth of
banks made them harder and sometimes impossible to manage. It also
made them more dangerous. When large, complex banks had no
management, not only could they fail, but they could also cause a crisis.
Absent management was a central cause of many financial crises
including the most recent one.
Once the 2008 financial crisis hit with full force, it was essential for
banks to have management in place. Some did not, and this absent
management caused more failures. There was a need for stronger
banks to rescue weaker banks and for governments to rescue failing
banks to stop the crisis.
Once absent management has been, hopefully, accepted as a reality
and a cause of bank failures and financial crisis, the resulting financial
crisis is a history of the devastating, widespread and lasting costs and
effects. If all bulls are dangerous, the most dangerous bulls are those
very large, complex bulls that are not handled or managed.
The final chapter before the conclusion will summarise what has
changed in the ten years since the most recent financial crisis. Perhaps
more important will be to summarise the absence of change in the last
ten years. History does not repeat itself. It is far too complicated for
that. But “Those who cannot remember the past are condemned to repeat
it” (Santayana 1905).
In the conclusion, most ambitiously, an attempt will be made to
suggest what needs to change for management of banks to become less
absent. This is a necessary development before banks can become less
dangerous and before we can all be protected from unmanaged banks.
 But this is a history book, and we will start at the beginning. And at
the beginning was the Medici.

References
Chandler, Alfred D., Jr. 1962. Strategy and Structure: Chapters in the History of the
Industrial Enterprise. Washington, DC: Beard Books.

Harvard Business Publishing. 2019. https://​hbr.​org/​store/​c ase-studies

Liebowitz, S.J., and S.E. Margolis. 2000. Path Dependence, Lock-In, and History. The
Journal of Law, Economics and Organisation 11 (1): 205–226.

Nakamoto, Michiyo, and David Wighton. 2007. Citigroup Chief Stays Bullish on Buy-
Outs. Financial Times, 9 July 2007.

North, Douglass C. 1990. Institutions-Institutional Change and Economic Performance.

New York: Cambridge University Press.
[Crossref]

Santayana, George. 1905. The Life of Reason.

Footnotes
1 The “administrator” terminology has generally been abandoned except in the
educational sphere, with an MBA being a Master of Business Administration.

2 Ibid.
© The Author(s) 2020
C. Dinesen, Absent Management in Banking
https://doi.org/10.1007/978-3-030-35824-2_2

2. The Medici and Renaissance

Complexity: How the Challenges of
Renaissance Banking Finally Defeated
the First Multinational Bank
Christian Dinesen1
(1) Dinesen Associates Ltd., London, UK

Christian Dinesen
Email: Christian@dinesen-associates.com

Keywords Medici – Renaissance – Complexity – Sovereigns –

Incentives

“No man ever steps in the same river twice, for it’s not the same river and
he’s not the same man,” as Heraclitus had it in the fifth century B.C.
Banking and bankers in the fifteenth century and today are different.
The purpose of taking a historical approach to absent management in
banking is to understand how we got here, not to look for historical
repetition. History is part of the explanation as to why there are
examples of absent management in banking today. Some of the
problems and challenges, for example, sovereign borrowing and
multinational operations, and their resulting complexities are
remarkably similar. Some of the approaches to managing banks,
particularly senior bankers combining banking and management, have
continued from the earliest banks to the present day. The continued
complexities of managing a multiline, multinational bank combined
with the lack of specialist and incentivised management resulted in
absent management. So a historical approach illustrates the continuity
with which banks have been managed, or not managed. There was
absent management in banking in the fourteenth- and fifteenth-century
Florence, including in the Medici Bank. They set the first example, and
many bankers would later want to manage like the Medici had done,
like famously wealthy Renaissance princes.
The fifteenth-century Medici Bank was not quite the beginning of
bank management, but their slightly earlier Italian banking
contemporaries probably were. One of the earliest banking crises was
the collapse of three Florentine banks, the Bardi, Peruzzi and Acciaiuoli.
Extending credit to sovereign rulers, including Edward III of England,1
Robert of Naples2 and the Dukes of Milan and Savoy, required careful
management in the fourteenth century.
The Bardi and Peruzzi banks collapsed in 1345 due to lending
900,000 and 600,000 florins, respectively, to Edward III. The English
king defaulted on the loans that had financed unsuccessful wars. These
early, multinationally active banks collapsed before the Medici rose to
become the largest bank of the time. Their collapses were caused by the
overextension of credit to domestic and foreign sovereigns.
It is difficult to determine whether these early banks’ failure were
caused by poor commercial judgement in their sovereign lending, bad
management or absent management, as there is insufficient
information available. However, the complexities involved were so
intricate that they may have been impossible to understand and
overcome, and therefore caused absent management.
The Plague that killed over one-third and perhaps up to two-thirds
of Europe’s population from 1348 onwards is one reason why there are
few records and little evidence of the present or absent management in
this early banking crisis. And that plague, known as the Black Death,
Black Plague or simply the Plague, and the economic stagnation that
followed, was a factor completely outside the control of even the most
competent bank manager.
The founding of the Medici Bank in Florence can be dated to 1397
when Giovanni di Bicci de’ Medici decided to transfer his headquarters
from Rome, where he had previously managed his own bank. The
Medici Bank lasted for nearly a 100 years until 1494. The ownership
remained in the family, passing from father to son, with Giovanni
succeeded by Cosimo de Medici in 1429, Piero for five short years from
1465 to 1469, Lorenzo (the Magnificent) until 1492 and Piero for the
last three years of the bank’s existence until 1494. It was an eventful
100 years during which the Medici Bank became the largest bank in
Europe and possibly the world. It went from one to ten branches across
Western Europe and amassed and lost a great fortune. It counted the
leading sovereigns of the day, including dukes, kings and popes,
amongst its clients. The wealth accumulated elevated the heads of the
Medici family to the supreme position of de facto rulers of Florence. But
with growth came complexity. And complexity caused an absence of the
previous sophisticated and competent management that had been
fundamental in achieving the initial growth of this first major,
multinational bank.
It is perfectly possible for a bank to fail by making poorly judged
domestic loans. However, lending to foreigners adds complexity. This
complexity can arise from the need to understand conditions in a
country different from the banker’s own. If the foreign lending is done
through a branch in the foreign country, complexity arises from
managing a branch in that country. Both types of complexities can
become so great that it may not be possible to manage them, leading to
absent management. With two sets of complexities, sovereign lending
and multinational operations, often combined, the need for capable
bank management was important during the Renaissance.
Complexity arose from several factors and increased due to the
combination of these factors. A diversity of lines of business, the need
to service multinational clients, primarily the papacy, and an
imbalanced North South European money market caused by the papacy
made the fourteenth- and fifteenth-century banking complex. This was
particularly so for an organisation as ambitious, fast growing and
successful as the Medici Bank.
However, complexity did not arise from the banking products
themselves, which were relatively simple, well-established and
understood. The Medici Bank primarily transacted three types of
banking. One was dealing in bills of exchange, a second type was
lending to individuals of high standing in society and a third was
deposit taking for wealthy individuals.
 Bills of exchange related to and facilitated a commercial transaction
or trade between two places and often across one or more national
borders. Funds were entrusted to the Medici branch in one location,
evidenced by a bill of exchange issued by the bank to the owner of the
funds. This bill could be converted into cash to settle a trade with the
local Medici branch or its representative in another location, often in a
different currency. The amount that would be repaid, in a different
location and currency, was agreed at the outset based on publicly
quoted prices. Typically, the time until the bill was payable was related
to the time it would take to travel between two places, say five days
between Florence and Venice, or 90 days between Florence and
London. At the outset, the bill would be priced in the currency of
origination as well as a price in a different currency in the location
where the goods were to be paid for. The Medici Bank would earn a
profit based on the difference between the two prices. In a well-
functioning banking marketplace such as Renaissance Florence, rates
for other locations, such as Venice or London, were regularly quoted.3
Because rates for other important cities were well known, as was the
time of travel, the products were relatively simple for experienced
bankers, although not without risk. A change in the exchange rates
during the duration of the bill could increase profits of the banker or
cause a loss. So the bank took a risk of currency exchange volatility. And
this was a real risk, given the slowness of travel and the political
volatility of the fifteenth century. Much could happen in the 90 days
during which the bill of exchange was being transported between
Florence and London.
Importantly, medieval banking had to be careful not to commit the
religious sin of usury, the charging of interest for lending money for a
period of time. Practising usury could lead to excommunication by the
Catholic Church. This is one of the most severe Catholic punishments,
involving exclusion from the Church’s sacraments, including burial, as
long as the excommunication lasts. Usury was one of the earliest
examples of banking regulation. Transgressions were closely monitored
by the Catholic Church and political rulers. Bills of exchange overcame
this important restraint because the profit made was based on the
difference in place rather than in time. Making money purely on a
difference in time would have been usury.
 The second Medici Bank product was loans to people of high
standing, high-net-worth individuals in today’s parlance, particularly
sovereigns, kings, queens, popes, princes, dukes and so on. These loans
were highly individual arrangements. The loans themselves were not
complicated nor were the stipulations for repayment. However, the
complexity increased because loans were subject to the religious ban
on usury. The profit from a loan is normally in the form of interest, but
this was illegal and had to be hidden. One example of how to overcome
the ban on usury was to overcharge the sovereigns for the luxurious
commodities often sold to them by bankers, including the Medici, and
paid for with the loan extended to them. This is an early example of
bankers finding a way to work around regulation, now called regulatory
arbitrage.
Sovereign loans also became complex because they entailed
significant risks of not being repaid, due to the sovereign having spent
the money on unproductive wars and luxuries. Often, the only way to
get a loan paid back was to make another. Security provided by the
borrower to the banker for the loans was often difficult to sell due to
few customers being available, for example, for highly valued jewellery.
There was obviously a significant problem of enforcing repayment.
Taking a sovereign to court in the fifteenth century may not have been a
viable option, given the need to maintain good relations with the
largest customer and the power of the sovereign.
In addition, sovereigns presented a significant concentration of risk,
being nearly always the largest borrower in a country. This provided
limited opportunity for spreading the large risk of not being repaid by a
sovereign borrower by lending to other smaller debtors. Other
customers were mostly so small in comparison to the sovereign that
they provided little diversification.
One important objective of lending to sovereigns was to provide
them with the funds to purchase the luxury goods also produced by the
bankers. A second reason to lend to sovereigns was that it was often the
only way to gain access to profitable commodity trades and exports of
goods such as wool or alum. Sovereigns often controlled these
monopolies. Finally, lending to a sovereign was done with the purpose
of being appointed to the profitable positions of tax collectors, another
monopoly controlled by the state and one of the most critical state
functions.
The sale of luxury goods, such as the silk locally produced in
Florence, was an attractive business for the Medici. However, it might
be necessary to lend to sovereigns to provide them with the funds to
buy the luxury goods. This is an early example of consumer finance. Car
manufacturers today lend to their customers to enable then to buy the
car. And car manufacturers have discovered that consumer finance
requires sophisticated financial management and discipline. The profit
can be made on the products, or the finance or perhaps both. However,
if one of the transactions incurs losses, it is critical to ensure that these
losses are covered by making additional profit on the other transaction.
Sovereign lending was often a loss-leader for a bank, using today’s
parlance, because the bankers were unable to charge interest. The
loans were made with awareness of significant risk and at no interest,
but with the aim of making profit on other commercial opportunities
arising from the sovereign loan. Once the first loans had been made,
this could result in a vicious downward spiral. It might be necessary to
extend more credit to achieve repayment of earlier loans, to finance
more wars and luxury expenditure as well as to retain profitable
trading rights or tax collection positions. The simple loan had become
complex. Sometimes the complexities, related to repayment or the
related lines of business or both, became so great that they were
unmanageable. The complexities were beyond the banker’s ability to
manage them and resulted in absent management. These complexities
and the possible related absent management may have contributed to
the fall of the Bardi and Peruzzi banks in 1345.
The third banking activity of the Medici was deposit taking. A few
wealthy individuals with savings sought a return and deposited money
with the Medici Bank. This provided the main source of funding for the
Medici lending business. However, the ban on usury made it impossible
to pay these depositors interest. Fortunately, it was not forbidden to
make gifts in the form of discretionary payments to depositors, as long
as this was not part of a contract. So a sophisticated but informal
system developed whereby depositors were rewarded with
discretionary payments, often taking close notice of what levels of
payments competing banks were rewarding their depositors with.
Importantly, the bank needed to ensure that the return on the lending
was adequate to cover the discretionary payments. This was an early
example of the need for bankers such as the Medici to manage both
their assets, being the loans made, and their liabilities, being the need
to repay deposits plus discretionary payments.
The Medici were primarily bankers but they were involved in other
lines of business. They had two wool factories and one silk factory in
Florence. They traded in alum and luxury goods as a way to profit from
the ban on usury and the resulting nil interest loans made to sovereigns
and others.
The Medici also operated as tax collectors and performed some of
the functions of a ministry of taxation and finance. In the case of Milan,
the local tolls and other taxes were paid directly to the Medici by the tax
collectors. The Church taxes, however, were always collected by the
Church itself.
The papacy was the largest Medici client in the bank’s history. The
Depository of the Apostolic Chamber was an official responsible for
receiving the Catholic Church’s revenues and was usually a banker,
making this banker the fiscal agent for the papacy. During the fifteenth
century, the depository was usually the manager of the Medici Rome
Branch. In the first 23 years of the bank’s existence, papal business
amounted to almost half of the bank’s total profits. However, the
frequent succession of popes, of which there were 15 in the fifteenth
century, meant that other bankers were occasionally appointed. By
1471, the Depository office had become less attractive to the Medici
because Pope Sixtus IV4 was living beyond his means. The Pope
expected the banker appointed as Depository to finance the
shortcoming. This deficit was eventually settled by the papacy
transferring stocks of alum to the Medici. Interest on what were
effectively loans to the papacy would obviously not be acceptable to the
Catholic Church, the institution responsible for the ban on usury. So the
Medici overcharged the papacy for silks and other luxury goods.
None of these additional lines of business to traditional banking
appear to have caused significant complexities or losses on their own.
The complexity arose when these other lines of business were
combined with banking, when lending was made to enable customers
to buy the wool and silk or to obtain the concessions to trade them. An
 Another Random Document on
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The Project Gutenberg eBook of A General
History of the Sabbatarian Churches
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Title: A General History of the Sabbatarian Churches

Author: Tamar Davis

Release date: September 11, 2021 [eBook #66265]

Language: English

Original publication: United States: Lindsay and Blakiston

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by The Internet Archive/American Libraries.)

*** START OF THE PROJECT GUTENBERG EBOOK A GENERAL

HISTORY OF THE SABBATARIAN CHURCHES ***
 Transcriber's Note:
Obvious printer errors have
been corrected.
Hyphenation has been
rationalised.
In Chapter I, Section III (A
Sketch Of The History Of
The Abyssinian Church)
"Hinglar" and "Kinglar" may
refer to the same individual.

A HISTORY
OF THE

SABBATARIAN CHURCHES.

A GENERAL HISTORY OF
THE SABBATARIAN CHURCHES:
EMBRACING ACCOUNTS OF THE

ARMENIAN, EAST INDIAN, AND ABYSSINIAN

EPISCOPACIES
IN ASIA AND AFRICA,

THE WALDENSES, SEMI-JUDAISERS, AND

SABBATARIAN ANABAPTISTS
OF EUROPE;

WITH THE

SEVENTH-DAY BAPTIST DENOMINATION

 IN THE UNITED STATES.

BY
MRS. TAMAR DAVIS.

"The dragon was wroth with the woman, and went to make war
with the remnant of her seed, which keep the commandments
of God, and have the testimony of Jesus Christ."—Rev. xii. 17.

PHILADELPHIA:
LINDSAY AND BLAKISTON.
1851.
Entered, according to Act of Congress, in the year 1851,
BY LINDSAY AND BLAKISTON,
In the Clerk's Office of the District Court, for the Eastern District of
Pennsylvania.

C. SHERMAN, PRINTER.
 PREFACE.
At the present time, when the Sabbath controversy is engaging so
much of the public attention, and when Sabbath Conventions and
Sabbath Unions are being chronicled almost monthly, I consider it
unnecessary to offer any apology for the introduction of the
following work to the public notice. My reader need not fear a
repetition or recapitulation of the arguments generally employed in
favour of the sabbatical institution, as it refers either to the first or
the last day of the week; neither will his attention be wearied by
prolix and verbose details. It has been my aim to collect, collate, and
condense facts, as much as appeared consistent with perspicuity. I
have not taken any new stand with regard to the Sabbath question.
The Seventh-day Baptists have, from the first, contended that the
Sabbath was changed, not by Christ or his Apostles, but by
ecclesiastical synods and councils. This could only be proved
convincingly by reference to the practice of those churches who
were removed by distance or otherwise beyond the pale of such
authority. That the Armenian, East Indian, and Abyssinian
Episcopacies were so removed, and that they absolutely refused to
succumb to the authority of the Latin or Greek prelates, sustaining in
consequence the most cruel and desolating wars, is an undeniable
historical fact; no less so the truth that during all this time they have
been living witnesses against Anti-Christ, as the observers of the
ancient Sabbath, which practice they learned from the Apostles, or
their immediate successors.
With respect to the History of the Seventh-day Baptist
denomination, I am not unaware of the imperfections that may be
detected in it. But I must excuse my own defects by a just complaint
of the blindness and insufficiency of my guides; and may also
observe that, with reference to nearly every portion of the work, I
have been the pioneer in the field of research.
 The Author.
April, 1851.
 TABLE OF CONTENTS.
PAGE

Preliminary Observations, 13
CHAPTER I.
SABBATARIAN CHURCHES IN ASIA AND AFRICA.
The Armenian Church, 18
Sabbatarianism of this Church, 30
Ancient Christians of India, 33
Their Sabbatarian Character, 39
The Ethiopic Church, 40
Its Sabbatarian Character, 54
CHAPTER II.
SEVENTH-DAY BAPTISTS IN EUROPE.
Waldenses, Albigenses, etc., 62
Their Doctrinal Sentiments, 69
Testimonies to their Sabbatarian Character, 70
Their Persecutions, 84
Further Accounts of their Sabbatarianism, 88
Semi-Judaisers—their Origin, 95
Their Sabbatarianism, 97
Their Churches in Russia, Poland, 99
Sabbatarians of Holland, 103
Sabbatarians of England, 107
The Natton Church, 114
The Cripplegate Church, 118
The Mill-Yard Church, 122
CHAPTER III.
 SEVENTH-DAY BAPTISTS IN THE UNITED STATES.
General History, 130
Churches in Rhode Island, 145
Churches in Connecticut, 162
Churches in New Jersey, 166
Central Association, 174
Western Association, 190
Southwestern Association, 198
Northwestern Association, 202
CHAPTER IV.
SEVENTH-DAY BAPTISTS IN THE UNITED STATES,
CONTINUED.
Keithian Seventh-day Baptists, 211
German Seventh-day Baptists,—General
History, 215
German Seventh-day Baptists,—Particular
History, 233
 PRELIMINARY OBSERVATIONS.
The word Sabbatarian, whether bestowed by their enemies as a
term of opprobrium upon those who observed the seventh day of
the week as the Sabbath, or whether assumed by themselves, is,
nevertheless, peculiarly appropriate, and very distinguishing of this
particular tenet in their system of religious faith. Neither do we
hesitate to employ it in a very extensive sense, as comprehending all
those religious communities, whatever may be their names, modes
of worship, or forms of ecclesiastical discipline, who refrain from
secular employments upon the last day of the week, and observe
the same as holy time. There cannot, therefore, be any impropriety
in considering the Abyssinian and Armenian Churches as sabbatarian
organizations, although the former has become greatly corrupted in
worship and doctrine, and exhibits few traces of the purity and
simplicity of primitive Christianity.
We claim for sabbatarian institutions a very high antiquity, and a
multitude of the most illustrious exemplars; from that grand sabbath
proclaimed over the new-born world by the Eternal Father, and
observed by angelic and seraphic intelligences, to its second
ordainment amid the smoke and thunders of Sinai, and its
subsequent observance by kings, priests, sages, and witnesses for
the truth through so many ages, to Him, the Great High Priest of the
Covenant, who sanctified the law and made it honourable. It is
incontestable that our adorable Lord and his Apostles observed the
seventh day of the week, and it was not until a long time
subsequent to the close of their earthly pilgrimages that the
reverence due to this holy time was transferred, in any Christian
community, to the Dominical day.
The first Christian church established in the world was founded at
Jerusalem under the immediate superintendence of the Apostles.
This church, which was the model of all those that were founded in
the first century, was undoubtedly sabbatarian. In the second and
third centuries, according to the testimony of Mosheim, it was very
generally observed. During the fourth and in the commencement of
the fifth centuries, it was almost universally solemnized, if the
veracity of Socrates, the ecclesiastical historian, may be depended
upon.
We have every reason to believe, however, that from the first, or,
indeed, at a very early period, a superstitious veneration was paid in
some places to the first day of the week. It is certain that, before
the close of the first century, the original purity and simplicity of
Christianity had become greatly defaced and deplorably corrupted by
the introduction into its doctrines of the monstrous tenets of a
preposterous philosophy, and into its ceremonies of a multitude of
heathen rites. Identical with this was the appointment of various
festivals to be observed on particular days. These days were those
on which the martyrs had laid down their lives for the truth, the day
on which the Saviour had been crucified, and that also on which he
rose from the dead. We have no reason to suppose that the
observation of the first day dates back any earlier than that of
Friday, or those anniversary festivals which were introduced to
commemorate the descent of the Holy Ghost upon the Apostles, and
the feast of Easter. All were the fruits of as dark, fabulous, and
superstitious times, as have ever been since the resurrection of
Christ. It seems to have been the policy of the rulers of the church
at this period, to assimilate Christianity in its rites and festivals to the
manners of Paganism, and in its doctrines to the tenets of a corrupt
yet seducing philosophy. For such a course of conduct various
reasons may be assigned. In the first place they were pleasing to the
multitude, who were more delighted with the pageantry and
circumstance of external ceremonies, and the frequency of holidays,
than with the valuable attainments of rational and consistent piety,
or with a sober and steady course of life.
In the second place, we have reason to believe that the bishops
augmented the number of the religious ceremonies and festivals in
the Christian worship, by way of accommodating it to the prejudices
and infirmities of both Jews and heathens, in order to facilitate their
conversion. These people were accustomed to a round of pompous
and magnificent ceremonies in their religious service; and, as they
deemed these rites an essential part of religion, it was natural for
them to regard with indifference, or even with contempt, any service
whose forms were divested of all specious and captivating
appearances. As their religion allowed to them a multitude of
festivals, the bishops supposed, and not without reason, that they
persisted in their idolatry on account of the ease, pleasure, and
sensual gratifications thereby enjoyed, consequently the rulers of the
church adopted certain external ceremonies, and appointed
festivities, in order to allure the senses of the vulgar, and to make
them more disposed to embrace Christianity. The effect of this
course of conduct was most pernicious. It effaced the beautiful
simplicity of Christianity, and corrupted its natural purity in order to
extend its influence; thus making it lose that practical excellence for
which no popular esteem could ever afford compensation. It may be
allowable, it may even be commendable, to accommodate
ecclesiastical as well as civil institutions, in certain cases, to the
infirmities of mankind, and to make some concessions, some
prudent instances of compliance to their invincible prejudices, but all
these should be of such a nature as not to derogate from the
majesty of the divine law, or to substitute for the ordinances of God
the observances and institutions of fallible men.
The multiplication of festivals and holidays would naturally bring
the Sabbath into neglect, but what contributed more than anything
else to destroy its influence over the minds of men, was the almost
universal abhorrence in which the Jews were held. We are informed
that multitudes of Christians, in the time of Adrian, abandoned all
the rites and institutions of their religion that bore any resemblance
to the Jewish ritual, for fear of being confounded with that people,
who had become obnoxious to the prince, and were suffering the
extremity of his vengeance. "Let us have nothing in common with
that odious brood, the Jews," says Constantine, when issuing his
edict for the observation of the Dominical day. Subsequently, the
sabbath was condemned for the same reasons by synods and
councils; popes and kings rose up in judgment against it. Perhaps
they feared also that its observation would remind the people of that
sacred volume, which the prelates chose, for their own convenience,
to keep from the world, and in which their condemnation, as
followers of the most detestable vices, would be so strongly marked.
Moreover they were determined, in the plenitude of their arrogance,
to give laws in both a temporal and spiritual sense; to govern the
consciences as they ruled the actions of mankind. Nor was this all,
some of these prelates actually aspired to stand, at least in the eyes
of the multitude, in the place of God,—to divert the adoration, which
should be paid to him, to themselves, or to the relics they had
blessed, and the saints they had canonized. Would not the
observation of the sabbath have tended to recall the minds of men
to the Maker of all things, as the only true and proper object for
religious adoration; to the fact that he alone was the moral governor
of the universe; his laws the standard of perfection; himself of
infallibility? History presents numerous examples of kings and
tyrants, who have assumed the attributes of Deity, and demanded
the homage of mankind; but, perhaps, a more impious imitation of
his power, a more blasphemous assumption of his prerogatives, were
never exhibited than in the conduct of these hierarchs. Did God
appoint one mediator between himself and man,—behold the saints
they canonized; did he bestow the Scriptures as his revealed will
upon the world,—behold the canons of the church in which their
authority is superseded; and did he institute and command the
observation of the seventh day as a day of rest,—they substitute an
other in its place. The Sabbath is reprobated as a Jewish institution:
it is a wonder that we hear nothing of a Jewish religion, as
Christianity certainly originated with that people; of a Jewish Saviour,
since the Redeemer was of the offspring of David; and of Jewish
apostles, as not one of the twelve were of the Gentile race. We must
go to the Jews for the Bible, in which is contained the knowledge of
God, and the hope of the world; we must go to the Jews for
examples of godliness in the long, dark ages before the Christian
era; why not go to them for a sabbath likewise? The spiritual pride
that opposes such a measure will not stand in the great and burning
day.
 CHAPTER I.
SABBATARIAN CHURCHES IN ASIA AND AFRICA.
SECTION I.
HISTORY OF THE ARMENIAN CHURCH.
The religious and political history of Armenia has, from the earliest
ages, been pregnant with great events; but, obedient to necessity; I
condense within a few pages what might fill as many volumes, and
content myself with giving an outline of the subject that some future
historian may amplify and adorn. In countries where there exists a
union between the church and the state, and the prelatic dignity is
supported by royal authority, the revolutions of the former are
intimately connected with the convulsions of the latter,—the
temporal with the spiritual affairs. But the archiepiscopal see of
Armenia appears to have preserved its ancient form of discipline and
doctrine in the most remarkable manner, notwithstanding the
changes of the royal and ducal dynasties in the state, and its
alternate subjection to Saracenic and Persian dominion.
The propagation of the gospel throughout Armenia is ascribed by
ancient historians to St. Bartholomew, who is said to be identical
with Nathaniel,—that Israelite indeed. In Albanopolis, a city of this
country, we are informed that the apostle suffered martyrdom; but
his blood only watered the seed of divine truth, and caused a more
glorious harvest of proselytes from the Zendavesta to the gospel,—
from the adoration of the host of heaven to the spiritual worship of
their Maker, "the King immortal, eternal, and invisible."
Notwithstanding the penal edicts of the sovereign, and the
opposition of the Magian priesthood, Christianity flourished like a
tree planted by the rivers of water, and the rising generations of
Armenia reposed under its salutary shade. Few religious sects have
been extirpated by persecution. Religion shines brightest in the night
of adversity; it is quenched and extinguished in the sunshine of
courts. Zeal and intrepidity are always stimulated by the presence of
an enemy. The Christians of Armenia received the crown of
martyrdom, rejoicing that they were accounted worthy to suffer for
their attachment to the cross. At last, however, the eloquence of a
priest, named Gregory, succeeded in converting the monarch and his
principal nobility, who received the rite of baptism, and entered into
the communion of the church. In consequence of this, Leontius,
bishop of Cappadocia, consecrated Gregory bishop of the Armenians,
and their church became annexed to the episcopal jurisdiction of the
Antiochan prelate.
This circumstance, so fortunate in a temporal sense, proved highly
destructive to its spiritual repose. No longer assaulted, it became the
parent of schism; and one Eustathius, an obscure priest, has given
his name to history, by the success that attended his efforts to
create an excitement and faction in the church. The convention of a
Council at Gangra might condemn and excommunicate, but could
not suppress this faction, which poured forth legions of missionaries,
and for a long time disturbed the repose of the Eastern prelates. The
doctrines of Eustathius were neither heretical, nor his conduct in
introducing them truly reprehensible, although from their nature
highly offensive to the spiritual dignitaries, who, to judge from their
habits of life, found more solace in wine and female intercourse than
in religious exercises, and who were more solicitous to acquire
wealth and preferments to enrich their physical heirs, than solicitous
about the welfare of their spiritual progeny. Producing the example
and judgment of Paul, Eustathius boldly condemned the marriages
of the priests, under any circumstances, as productive of evil; but
denounced second and third marriages as abominable, and worthy
of excommunication. The use of wine,—in short, all sensual delights,
—he prohibited, as equally reprehensible in those who were set as
exemplars and rulers of the flock of Christ. Eustathius was
succeeded by Erius, a priest, and semi-Arian, who not only protested
against the multiplied marriages of the priests, but declared that the
bishops were not distinguished from the presbyters by any divine
right, and that, according to the Holy Scriptures, their authority and
offices were identical. This tenet, of which the immediate
consequences would have been to reduce within certain limits the
power of the prelates, raised a storm of opposition from that quarter,
although it was highly agreeable to many good Christians, to whom
their tyranny and arrogance had become insupportable. Erius also
condemned fasts, stated feasts, prayers for the dead, and the
celebration of Easter; but he urged a purer morality and a stricter
observance of the Sabbath. He had many followers, whose numbers
were greatly augmented by one Paul of Samosota, from whom they
were called Paulicians. Notwithstanding the opposition of the
prelates, who invoked the secular arm to prevent the defection of
their spiritual subjects, the tenets of this sect struck deep root in
Armenia and many of the eastern provinces, and finally the great
body of Christians in the former country, withdrew from the
Episcopal communion, and publicly espoused the sentiments of the
Paulicians. These were accused of breaking loose from the
brotherhood of the Christian world, and they were denounced by the
bishops as the most odious of mankind. Whatever might have been
the denunciations of their adversaries, posterity, after a candid
examination of their tenets, must concede that they were principally
distinguished for an adherence to the strict letter of the sacred text,
and for the primitive simplicity of their forms of worship. Their
ecclesiastical institutions exhibited the most liberal principle of
reason. The austerity of the cloister was relaxed, and gradually
forgotten. The standard of piety was changed from absurd penances
to purity of life and morals. Houses of charity were endowed for the
support and education of orphans and foundlings, and the religious
teachers were obliged to depend for temporal support upon the
voluntary subscriptions of their brethren and the labour of their own
hands. To these churches, famous throughout the East no less for
the purity of their worship than their exemption from ecclesiastical
tyranny, myriads of fugitives resorted from all the provinces of the
Eastern empire, and the narrow bigotry of the emperors was
punished by the emigration of their most useful subjects, who
transported into a foreign realm the arts of both peace and war.
Among the mountains of Armenia, and beyond the precincts of the
Roman power, they seemed to have found a new world, where they
might breathe the air of religious freedom. The emperors, ignorant
of the rights of conscience, and incapable of pity or esteem for the
heretics who durst dispute the infallibility of holy councils, and
refused to acquiesce in their imperial decisions, vainly sought, by
various methods, to excite against them the indignation of their
sovereign and the vengeance of persecution.
During this time the Paulicians had increased in a wonderful
manner. The desire of gaining souls for God, and subjects for the
church, has, in all ages, fired the zeal and animated the activity of
the Christian priesthood. It must not be supposed that the Paulicians
were less arduous in the prosecution of their spiritual enterprises.
Assuming the character of travelling merchants, or in the habits of
pilgrims, a character to this day sacred throughout the East, they
joined the Indian caravans, or pursued without fear the footsteps of
the roving Tartar. The hordes encamped on the verdant banks of the
Selinga, or in the valleys of the Imaus, heard, with feelings of
mysterious reverence, the story of the incarnation; and illiterate
shepherds and sanguinary warriors forsook their flocks and deserted
their camps to listen to the simple eloquence of an Armenian pilgrim.
Perhaps the exposition of a metaphysical creed was no more
comprehensible to the one than were lessons of humanity and
repose to the other; but both were susceptible of the baser passions
of hope and fear, and both could understand the effect that their
rejection or adoption of the gospel would exercise, according to the
popular belief, upon their destiny in a future world. The mysterious
rites of Christianity were administered to multitudes, among whom a
great Khan and his warriors were said to be included.[1] In other
regions the Paulicians were no less successful. Unwonted crowds
resorted to the banks of Abana and Pharpar, whose limpid waters
seemed particularly appropriate for the administration of the
baptismal rite. The bishops of Syria, Pontus, and Cappadocia,
complained of the defection of their spiritual flocks. Their murmurs,
a principle of policy, above all an implacable hatred against
everything bearing the semblance of freedom, induced the Grecian
emperors to commence, and continue for nearly two centuries, the
most terrible persecutions against the Paulicians. During these
frightful convulsions, Armenia was ravaged from border to border
with fire and sword; its monarchy—then held by a younger branch of
the family of the Parthian kings—extinguished; its cities demolished,
and its inhabitants either massacred by the hands of their enemies,
driven into exile, or sold into servitude. Great numbers fled for safety
and protection to the Saracens, by whom they were hospitably
entertained, and who permitted them to build a city for their
residence, which was called Tibrica. This afforded them an
opportunity for returning, with interest, the miseries that they had
suffered at the hands of the Greeks; for, entering into a league with
the Saracens, and choosing for their leader a chief named Carbeas,
they prosecuted against the Greeks a war which continued during
the century, and in which the slaughter on both sides was
prodigious.[2] During these convulsions several companies of the
Paulicians passed into Bulgaria, Thrace, and the neighbouring
provinces, where their opinions became the source of new
dissensions. After the Council of Basil had commenced its
deliberations, these sectaries removed into Italy, where they became
amalgamated with the Albigenses and Waldenses.
Armenia, reduced from an independent kingdom to a ducal
sovereignty, maintained a real independence, though in nominal
servitude. The Roman emperors, in the decline of their greatness,
were content with the name of homage and the shadow of
allegiance. A robe of rare texture and curious workmanship, formed
of the hair or wool by which the mother-of-pearl, a shell-fish of the
Mediterranean, attaches itself to the rock, was their annual imperial
gift that purchased the nominal fealty of the Armenian satraps. But
the Church, notwithstanding this political vassalage, preserved its
independence. The Armenian priests, in consequence of their
ignorance of the Greek tongue, were unable to assist at the Council
of Chalcedon, but the doctrines of Eutyches, to which they still
adhere, were propagated among them, perhaps, with a slight
modification, by Julian of Halicarnassus. From the earliest ages they
have devoutly hated the error and idolatry of the Greeks. Like the
primitive Christians, they have ever exhibited an unconquerable
repugnance to the use or abuse of images, which, in the eighth and
ninth centuries, spread like a leprosy through nearly all Christendom,
and supplanted all traces of genuine piety in the visible church by
the grossest superstition. They are decidedly adverse to the
adoration of relics, the worship of the Virgin, or the observation of
the feasts and festivals of the Church. They regarded the Greeks as
idolaters;—the Greeks accused them of Judaism, heresy, and
atheism, and to these accusations, with the feelings they
engendered, may be ascribed the unrelenting animosity and
persecution that they waged against each other, and which
terminated only when the Grecian empire ceased to exist.
Armenia has, in all ages, been the theatre of hostile operations.
Times without number her cities have been plundered, her harvests
consumed, and her flocks slaughtered, to gratify the cupidity or to
satiate the hunger of armies, who, in the character of allies, were
marching through her territories. The empire of the East has, in
many instances, been contested upon her fields; and, though
generally in servitude, seldom has she been permitted to enjoy the
tranquillity of that state. Yet subsequent to the firm establishment of
the Saracen dominion in Asia, they enjoyed a long period of
prosperity and repose. When the Saracenic empire became
supplanted by that of the Tartars, the consequences to the Eastern
Christians were most deplorable.
These ruthless conquerors destroyed, wherever they went, the fair
fruits that had arisen from the labours of the missionaries, extirpated
the religion of Jesus from several cities and provinces where it had
flourished, and substituted the Mohammedan superstition in its
place. The Armenian churches, in particular, experienced the most
deplorable evils from the ruthless and vindictive spirit of Timur Bec,
or Tamerlane, the Tartar chief. This implacable warrior, having
overrun a great part of northern and western Asia, exerted all his
influence and authority to compel the Christians to apostatize from
their faith. To the stern dictates of unlimited power he united the
compulsory violence of persecution, and treated the disciples of
Christ with the most unrelenting severity; subjecting such as
magnanimously adhered to their religion, to the most cruel forms of
death, or to the horrors of unmitigated slavery. Under the successors
of Timur they were subjected to many vicissitudes, being alternately
protected and oppressed, according as the caprice of the reigning
sovereign seemed to dictate. Nevertheless, under the rod of
oppression their zeal was intrepid and fervent, nor could the
sunshine of prosperity warm in their hearts an undue love of the
world, and render them careless or indifferent to the interests of
Christianity. In numberless instances they preferred the crown of
martyrdom to the turban of Mohammed, and have sacrificed the
dearest of temporal interests,—fame, wealth, and preferments, to a
scrupulous adherence to the Christian profession, and a strict regard
for its duties. Once only within the last thirteen centuries has
Armenia aspired to the rank of an independent kingdom, and even
then her Christian kings, who arose and fell, in the thirteenth
century, on the confines of Cilicia, were the creatures and vassals of
the Turkish sultans of Iconium. About the commencement of the
seventeenth century their state experienced a considerable change
in consequence of the incursions of Shah Abbas, the great king of
Persia.
This prince, justly apprehensive from the victorious approach of
the Turks, ravaged that part of Armenia which lay contiguous to his
dominions, and ordered the inhabitants to retire into Persia. It will
be perceived that these devastations were not intended to evince
hostility against the Armenians, but to retard and embarrass the
advance of the Turks. Encouraged by the monarch, the most opulent
of the Armenians removed to Ispahan, where the Emperor
appropriated a beautiful suburb for their residence, and permitted
them to enjoy every civil and religious privilege, under the
jurisdiction of their own bishop or patriarch. During the
administration of this magnanimous prince these happy exiles
partook the sweets of liberty and abundance, but his death was the
signal for the triumph of their enemies. A storm of persecution
succeeded, in which the constancy of multitudes was shaken;
indeed, so general was the apostacy, that for a time it appeared
probable that this branch of the Armenian Church would be lost.
These apprehensions proved to be groundless. To the abatement of
the rage of their enemies succeeded the restoration of their political
rights. Their churches, in Ispahan and other Persian cities, that had
been demolished, were rebuilt, and their schools, which had been
shut, were re-opened. It is said that, at present, many of the most
luxurious seats in Persia are occupied by opulent Armenians. In
Bagdad and Damascus they vend the magnificent silks of Oriental
manufacture, and preside over the creation of those exquisite fabrics
that are the admiration of the world. In all these cities they have
meeting-houses, with burial-grounds attached, in which flowers of
rare beauty and exquisite odours are cultivated. In these burial-
gardens, were it not for the presence of monumental marble, one
would forget the contiguity of death and decay. The splendid palms,
the glorious rose-trees, and the living song of birds, are anything but
inspiring of melancholy thoughts.
The Bible was translated at a very early period into the Armenian
language, but, in 1690, the call for the Scriptures became so great
that the manuscript copies were not sufficient to supply the demand.
To remedy this evil, it was decided by a council of Armenian bishops,
assembled in 1692, to perpetuate and multiply that Holy Book, by
the art of printing, of which they had heard in Europe. They first
applied to France, but the Catholic church objected to printing and
distributing the Bible. It was accomplished, however, through the
agency of some Armenian merchants, who had settled, for purposes
of commerce, at London, Venice, Amsterdam, and many other
European cities. This Bible agrees in a wonderful manner with the
English version of the Scriptures, to which it is not inferior in
correctness of diction and beauty of typography. The religion of
Armenia has derived few advantages from the power or learning of
its votaries, but with the Bible in their native tongue, and being
permitted to read and exercise their private judgment in its
interpretation, it is not so very surprising that their church has
remained uncontaminated by Grecian, Roman, and Mohammedan
corruptions. It must not be supposed that the Roman pontiffs, ever
zealous to enlarge the bounds of their jurisdiction, were mindless of
engaging the Christians of the East to submit to their supremacy. On
the contrary, this was for a considerable time the chief purpose that
excited their ambitious views, and employed their labours and
assiduities. But these attempts were unavailing, nor could any union
between the churches ever be effected.
The residence of the Armenian patriarch is at Ekmiasin,—three
leagues from Erivan. Forty-seven archbishops, of whom each may
claim the obedience of four or five suffragans, are consecrated by
his hand. Many of these, however, are only titular prelates, who
dignify by their presence the simplicity of his court. Their
performance of the liturgy is succeeded by their cultivation of the
ground; and, unlike the prelates of Europe, the austerity of their life
and the plainness of their appearance increases in just proportion to
the elevation of their rank. Throughout the fourscore thousand
villages of his spiritual empire, the patriarch receives the tribute of a
small but voluntary tax from each individual above the age of sixteen
years. But this income is not expended on luxurious living, being
employed to supply the incessant demands of charity and tribute.
The Indian caravan, laden with its precious commodities, usually
halts in the vicinity of Erivan, which, through the influence of the
wealth thus distributed, has become a splendid and beautiful city,
adorned with fountains, groves, and splendid churches.
Besides the churches in Armenia proper, there are congregations
of the same faith and forms of worship in Barbary, Egypt, Poland,
Greece, and Turkey. They have churches also in nearly all the
Oriental cities, between which a continual intercourse and
communication is carried on by the travelling merchants or pedlars
of that sect, who are distributed all over the East. Decidedly
intelligent, and frequently adepts in Oriental literature, they are
always found at the courts of the Eastern princes, where they act in
the capacity of interpreters. Armenian ladies are generally chosen to
fill the station of favourite, or companion, to the Sultanas.
The Armenian Christians are eminently qualified for the office of
extending the knowledge of the gospel throughout the East; and the
time is not far distant when they will prove the most efficient body
of missionaries in the world. Indeed, without the name, in a
multitude of instances, they have assumed their character and acted
their part. It is true that they are unacquainted with the European
habit of supporting expensive missions in foreign countries, but like
the Waldenses, they travel as venders of merchandise, and embrace
all opportunities to impart instruction.
They carried the knowledge of the gospel into China, when that
country was inaccessible to Europeans; and long before the English
obtained a footing in India, they had erected churches in all the
principal cities of that empire, in which the worship of God was
maintained upon every ensuing Sabbath. They are familiar with the
Oriental languages, and acquainted with the habits of the people,
who consequently feel no dread of their foreign character, but regard
them from the first as brothers and friends. The first version of the
Scriptures into the Chinese language was made by an Armenian,
named Joannes Lassar, whose knowledge of Oriental literature was
really surprising, and who was no less eminent for genuine and
enlightened piety.
Their ecclesiastical establishment in Hindostan is very respectable.
The bishop visits Calcutta, but he is not resident there. They have
churches in Calcutta, in Madras, and in Bombay, which contain
together about two thousand communicants. There are also
churches in the interior. Of these they have one at Dacca, another at
Syndbad, and a third at Chinsurah, that are large and flourishing. In
these churches the greatest simplicity prevails, and everything
accords with the apostolic character of the worshippers. No
magnificent altar, blazing with gold and gems, no gorgeous
candelabra, no exquisite creations of painting or statuary, no
imposing ceremonies; neither genuflexions nor lustrations; neither
instrumental harmonies, nor services performed with pompous
parade and in an unknown tongue. The cross is the only ornament
of their churches, accompanied with the Bible and the liturgy.
From these prayers and texts are read by the officiating priest,
succeeded by an appropriate discourse, and the whole closes with
singing a psalm much in the style and manner of an anthem.
Baptism, among the Armenians, is administered by immersion in
rivers, or running streams, if such are convenient; when otherwise,
in a room, called the baptistery, which is always contiguous to the
church. They regard the sacrament as a memorial of the Saviour's
passion,—nothing more,—and administer it in both kinds to the laity.
They reject the observation of saints' days, or the festivals of Christ,
but declare that God, in his word, ordained the seventh day as a day
of rest, which they religiously observe.
The Armenians are not ignorant of the nature of experimental
religion. Many individuals among them have exhibited examples of
genuine and enlightened piety, and have expired in the triumphs of
faith. Their moral character, as might be supposed, far exceeds that
of any other Eastern people. The women are modest, dignified, and
observant of their conjugal relations; the men are intelligent and
affable. Their general character is that of a wealthy, industrious, and
enterprising people. Their companionship is courted all over the
East.
They occupy posts of honour and profit, they monopolize
commerce, and hold the highest rank as artisans and
manufacturists. Is not the hand of God in this thing? Are they not
designed, at some future period, to work wonders in the moral
renovation of mankind? For that purpose, probably, the everlasting
arm has been beneath and around them for so many ages, and they
have been preserved from the arts and allurements of the tempter.
For that purpose, probably, they have been led into the cities and
palaces of the Eastern countries.
 Where are the seven churches of Asia, to whom was penned the
mystic visions of the Apocalypse? Where are the splendid cities in
which they rose and flourished? Gone, gone, with the glory of
Babylon and the triumphs of Rome. Where is the church of Laodicea,
in whose gorgeous cathedral the lordly prelates met to give laws to
the Christian world and to anathematize Sabbath-keepers? Echo
might answer, "Where?" since it is only remembered because
consecrated by the historic muse. But the Sabbath they execrated
still exists; is still honoured and hallowed by large and flourishing
churches, whose members are scattered over all parts of Asia.
Churches, who have never bowed to Baal, who have remained
uncorrupted by Rome, uncontaminated by Mohammedism; who
amidst the darkness of idolatry kept the lamp of Christianity
replenished and burning; and in whose moral firmament the rays of
the Star of Bethlehem have never been obscured. That the members
of these churches possess natural facilities for the propagation of
Christianity throughout the East, that a foreigner could scarcely
acquire by long years spent in toil and study, must be evident to
every discerning mind. But they are ignorant of the art of printing;
and although three editions of their Bible have been issued at
Amsterdam, and another at Venice, the supply has by no means
equalled the demand among themselves for that holy book. What
they require are facilities for printing. A mission, with printers and
printing-presses, established in the heart of that country, would
prove of incalculable advantage;—not to teach them Christianity:
they are acquainted with its doctrines already;—but to print their
Bible, and other religious books, for distribution; to enrich their
travelling merchants, who are in continual motion from Canton to
Constantinople, with the precious wares of truth and wisdom; to
inspire their zeal, awaken their energies, and secure their
engagement in the glorious enterprise. Would it not be interesting to
open a communication with these ancient churches, whose
foundation on the Rock cannot be doubted, since they have
withstood the wreck and ruin of eighteen centuries, neither
extinguished by wars and desolations, nor contaminated by the false
prophet or the beast? Would it not be delightful to hold intercourse
with that venerable patriarch,—the successor of a line of prelates
extending back to the Apostle, that Israelite indeed, in whom was
found no guile? Surely that place is hallowed. Within sight of
Ekmiasin is Mount Ararat, where the world's gray fathers came forth
to witness the bow of the covenant, and whence the Sun of
Righteousness shall yet arise to the benighted nations with healing
in his wings.
The Armenians, though ignorant of the art of printing, have an
abundant store of literature. In the monastery of Ekmiasin, and in
some other places, the accumulated lore of ages has been preserved
in huge piles of manuscripts, that would abundantly reward the
labours of the scholar and the antiquarian. They are not ignorant of
the belles-lettres, and they have produced some pleasing poets and
rhetoricians.[3]
There are other ancient sects in the East who are represented as
being observant of the ancient Sabbath. Of these we might instance
several branches of the Nestorian fraternities, the Hemerobaptists,
or Christians of St. John, and the Jusidians. How far this may be the
case, I have no data for determining. Some authors have also
ascribed the observation of the Sabbath to the Greek Church; but
this, I believe, can only be understood in a partial and limited sense.
Many have been guilty of the incongruity of including in the term
"the Greek Church" all the Christians of the East. Strictly speaking,
that term was, and is, only applicable to those countries in which the
spiritual authority of the Constantinopolitan prelate predominated.
 SECTION II.
A SKETCH OF THE HISTORY OF THE ANCIENT CHRISTIANS OF
INDIA.
The introduction, rise, progress, declension, and extirpation of
Christianity in India, is, with some partial exceptions, wrapped in
profound obscurity, yet many historians of abundant information and
unimpeachable veracity are unanimous in supposing that India
received the gospel probably before Great Britain.
Rev. C. Buchanan says, "There have lately been discovered
Sanscrit writings containing testimony of Christ. They relate to a
prince who reigned about the period of the Christian era, and whose
history, though mixed with fable, contains particulars which
correspond, in a surprising degree, with the advent, birth, miracles,
death, and resurrection of our Saviour." The same testimony is given
by Sir William Jones, whose acquaintance with Oriental literature has
never been surpassed. Another learned historian declares, "That it
may be proved by the Syriac records, that in the fourth century
Christianity was flourishing in the provinces of Chorasin and
Mavaralhara; and from a variety of learned testimony, that the
gospel was introduced by the Apostle Thomas himself into India and
China, within thirty years subsequent to the ascension of our
Saviour." La Croze in the clearest manner proves the antiquity of
Christianity in those countries. In the epitome of the Syrian canons,
St. Thomas is styled the Apostle of the Hindoos. He is uniformly
styled, in the Syrian Chronicles, the first bishop of the East. Ebed
Jesus says, "India and all the regions around received the priesthood
from him." Amru, the Syriac historian, traces both Thomas and
Bartholomew through Arabia and Persia into India and China. Many
of the Syrian writers quoted by Asseman agree in stating that a few
of the twelve, and many of the seventy disciples went far and wide
preaching the gospel through Northern Asia.
The Bishop of Calcutta, Dr. Wilson, says, "That the Christians of
the Malabar Coast are the remnants of the ancient church of India,