BANK. 



401 



nation, or the municipal authorities of a place, as in 

 Amsterdam, has the direct management or control 

 of a bank, it is a public one ; and those institutions of 

 this class, the credit of which is connected with that 

 of the government, or which are used as instruments 

 in collecting and distributing the public revenues, or 

 in which the government is a proprietor, are public 

 banks ; and so are also those usually considered to 

 be, which are carried on under a charter from the 

 government ; whereas a private bank is usually un- 

 derstood to be one that is carried on by one or more 

 individuals, without any particular connexion with 

 the government, or any special authority or charter. 

 There is, for instance, in England, but one public 

 bank, namely, the bank of England ; whereas, in the 

 United States, most of the banks are public, and, in 

 some of the states, private banks of circulation are 

 prohibited by law. The general character and the 

 different kinds of these institutions being thus ex- 

 plained, the reader will be enabled the more easily 

 to understand our account of some of the banking in- 

 stitutions of the greatest historical notoriety. 



The Bank of Venice was established as early as 

 1171, during the crusades, and for the purpose of 

 rendering assistance to those expeditions. It was a 

 bank of deposit only, and strictly a public bank, as the 

 government became responsible for the deposits, and 

 the whole capital was, in effect, a public loan, the 

 funds of the bank being made use of by the govern- 

 ment ; and, in the early periods of the operations of 

 this bank, they were not withdrawn, when once de- 

 posited, but the depositor had a credit at the bank 

 to the amount deposited ; and he used the money so 

 deposited by transferring this credit to another person, 

 instead of paying money. Subsequently, however, 

 the deposits were allowed to be withdrawn ; for, 

 though the bank credits answered all the purposes 

 of money at Venice, a specie currency was wanted 

 by persons going abroad, or having payments to make 

 in distant places. This bank continued in operation 

 until the dissolution of the Venetian republic, in 

 1798. 



The Bank of Amsterdam was established in 1609, 

 and owed its origin to the clipped and worn currency, 

 which, being of uncertain and fluctuating value, sub- 

 jected the exchange to a corresponding fluctuation 

 and uncertainty. The object of the institution was, 

 to give a certain and unquestionable value to a bill 

 on Amsterdam ; and, for this purpose, the various 

 coins were received in deposit at the bank at a cer- 

 tain value, according to their weight and fineness, a 

 small deduction of seigniorage being made, equiva- 

 lent to the supposed expense of coinage into money 

 of the proper weight and fineness, ana the depositor 

 was also required to pay a small amount for the pri- 

 vilege of having an account at the bank. As the 

 money received, is not, in fact, recoined, these 

 charges, with a distinct charge for deposits of bullion, 

 and a fee for every new deposit, and five stivers for 

 every transfer, constitute the income of the establish- 

 ment, and, being more than sufficient to defray the 

 expenses, a net revenue accrues to the city, though 

 the acquisition of revenue was not contemplated in 

 forming the institution. A profit has also occasion- 

 ally been made by purchasing tiie current coin when- 

 ever it could be converted .into bank money at an 

 expense less than the agio. The deposits made and 

 credited are denominated bank money, which is at 

 a certain premium or agio above current money, 

 according to the fineness and weight of the current 

 coin ; and since the currency has been well regulated, 

 this agio is steady and inconsiderable, never exceed- 

 ing five per cent. In order to produce the intended 

 enect on the exchange, it was provided, by law, that 

 all payments of 600 guilders and upwards, should be 



made in bunk money ; and payments are made by 

 transfers of credits in the books of the bank, as for- 

 merly at Venice. In one respect, this bank differs 

 from that of Venice, as the deposits are not taken out 

 and used by the government, but remain in the vaults. 

 The direction of this bank is placed in the hands of 

 four burgomasters or aldermen for the time being, 

 who count and receipt for the money on coming into 

 office at the commencement of each year. During 

 the whole period since the establishment of the bank, 

 no peculation, or breach of trust, on the part of these 

 directors, has ever happened. This is a bank merely 

 of deposit and transfer : it neither makes loans nor 

 circulates bills. 



The Bank of Hamburg was established in 1619, 

 ten years after that of Amsterdam, and, like this lat- 

 ter, is a mere bank of deposit and transfer, the de- 

 posits being made in coin or bullion, at a certain fix- 

 ed rate, and liable to be withdrawn by the depositors 

 any one having a credit at the bank may draw on 

 the amount of his credit. The bank has not properly, 

 therefore, any capital of its own, the whole funds being 

 liable to be withdrawn at any moment. The expenses 

 of the institution are defrayed by a charge of a cer- 

 tain rate per page of transfers in the bank book to 

 every depositor. The amount of deposits varies from 

 ten to fifteen million dollars. This bank was plun- 

 dered by Davoust, when he was in possession of 

 Hamburg, in 1813 ; but many of the depositors, an- 

 ticipating this event, had withdrawn their deposits, 

 and remitted them to Copenhagen or England ; and, 

 to those who remitted to England, it proved quite a 

 fortunate event, for, by the subsequent rise of ex- 

 change, they nearly doubled their capital. The 

 depositors who were thus plundered of their pro- 

 perty received a partial indemnity of thirty-six per 

 cent, from the French government, after the resto- 

 ration of the Bourbons. The directors of this bank, 

 five in number, are chosen annually by the whole 

 body of the citizens of Hamburg, having a right to 

 vote for municipal officers. They receive no sa- 

 lary. 



The Bank of England is one of deposit, discount, 

 and circulation. It was chartered in the reign of 

 William and Mary, 1693, seventy or eighty years 

 after those of Amsterdam and Hamburg, by an act 

 which, among other things, secured certain recom- 

 penses and advantages to such persons as should ad- 

 vance the sum of 1,500,000 towards carrying on 

 the war against France. The sum of 1,200,000 

 was subscribed before the expiration of the year, and 

 the subscribers became, under the act, stockholders, 

 to the amount of their respective subscriptions, in 

 the capital stock of a corporation, denominated the 

 Governor and Company of the Bank of England. 

 This charter was granted for eleven years, and the 

 company advanced to the government jgl, 200,000, at 

 an interest of eight per cent. ; and the government 

 made an additional bonus, or allowance to the bank, of 

 4000 annually, for the management of this loan 

 (which, in fact, constituted the capital of the bank,) 

 and for settling the interest and making transfers, &c. 

 among the various stockholders. This nank, like that, 

 of Venice, and unlike those of Amsterdam and Ham- 

 burg, was originally an engine of the government, 

 and not a mere commercial establishment. The 

 management of the institution is in the hands of a 

 governor, lieutenant-governor, and twenty four di- 

 rectors, elected by stockholders who have held 

 500 of stock for six months previous to the elec- 

 tion. A director is required to hold 2000, a deputy 

 governor 3000, end a governor 4000, of the 

 capital stock. Its capital nas been increased, from 

 time to time, so as to stand at different periods as 

 follows : 



Si 



