232 



B A X K. 



Bank. issued. The batik, however, gave credits and receipts 

 V- ' also upon deposits of gold and silver bullion, at the 

 rate of five pi r cent, lew than the mint price of such 

 bullion, v hich was restored again to the owner, if 

 he called for it within six months, upon paying one- 

 fourth per cent., if the deposit was in silver, or one- 

 balf per cent, if in gold. But if the term of x 

 months wis allowed to expire, the bank retained the 

 bullion at the price stated in its book;. 



The advantage of making deposits in this bank is 

 twofold. First, The credit enables the merchant to 

 pay his bills of exchange. Second, The receipt gives 

 him an opportunity of selling his bullion at an ad- 

 vance of price, if the market shall fluctuate in his fa- 

 vour. Although none can draw out bullion without 

 producing a receipt, and re-assigning bank-money 

 equal to the price at which the bullion had been re- 

 ceived, yet it is not absolutely necessary that both 

 credit and receipt should always remain in the hands 

 of the same person ; as he who has the receipt will 

 find bank-money to buy at the ordinary market price, 

 to enable him to relieve the bullion ; and the owner 

 of credit will, at all times, find receipts in abun- 

 dance. But to prevent any extraordinary rise in the 

 price of bank-money or receipts, which speculation, 

 or other causes, might sometimes induce, the bank 

 adopted the resolution of selling bank-money for the 

 current coin, at an agio of five per cent ; and if buy- 

 ing it, at the rate of four per cent. 



It is generally understood, that the Bank of Am- 

 sterdam keeps in its repositories the full value in mo- 

 ney or bullion of all the receipts it has issued ; but it 

 is not absolutely necessary to do so, as many of these 

 receipts have expired. But that there is value in the 

 hank equal to all the demands that can be made upon 

 it, there is little doubt ; for the city is guarantee 

 that th ; s should be the case, and the directors, who 

 are annually changed, compare the treasure with the 

 Looks, and would therefore detect any acts of fraud 

 or imposition. 



The four reigning burgomasters are invested with 

 the direction of the bank ; and the city of Amster- 

 dam derives a considerable revenue from it, which 

 arises from the following sources : For all depo- 

 sits, a fourth or half per cent, must be paid from 

 every person who opens an account, a fee of ten guil- 

 ders is exacted ; and for every additional account, 

 three guilders three stivers for every transfer, two 

 stivers, or six stivers if the transfer is less than 800 

 guilders. If any person shall overdraw his account, 

 he is fined three per cent, on the amount ; and his 

 order is set aside. There is also a considerable pro- 

 fit from the sale of foreign coin or bullion, which is 

 always kept till it can be sold to advantage, and like- 

 wise, by selling bank-money at five per cent, agio, 

 and purchasing it at ibur per cent. From these va- 

 rious resources, the Bank of Amsterdam became rich 

 and prosperous; and it was supposed to retain in its 

 repositories more gold and silver than any other es- 

 tablishment of the kind in Europe. 

 Bank of Previous to th< were only four 



England, considerable banks in Europe ; but on the 27th July 

 A.D. 16S4. f t }, at year, a charter was granted by William and 

 Mary, for establishing the Bank of England, 



which, for opulence and extent of circulation, is now 

 the ; in the world. William Paterson, a na- 



tive of Duinlries-shire, in Scotland, was the projector 

 of this bank, and, it is said, he took the Bank of 

 St George, in Genoa, for his model. Michael God- 

 frey, a gentleman ol great consideration in the city 

 of London, assisted Paterson to arrange the esta- 

 blishment. The charter was granted for the t 

 of twelve years ; and the corporation was determi- 

 nable on a year's notice. A governor, deputy- 

 governor, and twenty-four directors are annually 

 elected from the proprietors, for managing the af- 

 fairs of the company, but not above two-thirds of 

 the directors of the preceding year can be chosen. 

 A governor must be possessed of 4000 stock, and 

 a director of 2000, before he is eligible ; and it is 

 requisite, that an elector should hold 500 stock to 

 entitle him to vote at general courts. 



The original capital subscribed by the proprietors 

 was 1,200,000 sterling, which was lodged in the 

 exchequer at the rate of 8 per cent, interest ; and 

 government allowed 4-000 additional in n?.me of 

 house expenses, so that the bank received 100,000 

 annually. In 1697 the bank was allowed to ingraft 

 1,001,171 : 10 : sterling on its capital stock. 

 This enlargement was intended as a support to pub- 

 lic credit, for tallies had been at from forty to sixty 

 per cent, discount, and bank notes at twenty per cent, 

 which was occasioned by the bank discontinuing to 

 pay its notes during the great recoinage of the silver 

 at that time going on. In terms of the act of the 

 7th Anne, cap. 7. the bank advanced 400,000 on 

 the original annuity of 100,000, and there had been 

 paid into the exchequer, in all, 1,600,000. In 

 pursuance of the same act, the bank cancelled Ex- 

 chequer bills to the amount of 1,775,027 : 17 : 10^ 

 at 6 per cent, interest, and was allowed to double its 

 capital. In 1708 the advances to government amount- 

 ed to 3,375,027 : 17 : 10*, and the capital of the 

 bank was now 4,402,343. By a call of 15 per 

 cent, in 1709, there was paid in and made stock the 

 sum of 656,204 : 1 : 9d ; and by another of 10 

 per cent, in 1710, 501,418 : 12 : 11. In conse- 

 quence of these two calls, the bank capital amounted 

 to 5,559,995 : 14 : 8. By the 3d of George I. c. 8. 

 the bank cancelled 2,000,000 of exchequer bills, 

 which made the advance to government 5,375,027 

 17 : 10*. By the Sth of George I. c. 21. the bank 

 purchased South Sea Company stock to the amount 

 of 4,000,000. To enable the bank to effectuate 

 this purchase,it increased the capital stock 3, 400,000 

 by subscription, in the year 1 722 ; and at this time, 

 the bank had advanced to the state 9,375,027 : 17 

 10| ; but ita capital stock was nomorethan 8,959,995 

 14 : 8. It appears, from this statement, that the bank 

 advanced a larger sum to government than the whole 

 amount of its capital, on which it paid a dividend to 

 the proprietors. And this circumstance shews, that 

 the bank possessed an undivided capital, which had 

 accumulated from its establishment, which is the fact, 

 and it has continued to have an undivided capital ever 

 since. For in the year 1746 the bank had advanced 

 to the public, on different occasions, 1 1 ,686,800 ; 

 and the capital on which it divided, had been raised, 



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