BAN 



invafion for^ example, fuch as that of the French in 1672. 

 The owners of bank moiKy bsing iheii all eager to draw 

 it out of th;; bank, in orJcr to have it in their own keep- 

 ing, the demand for receipts might raifc their price to an 

 exoibitant height. The- holders of them mi!rht form exlra- 

 vavrar.t expeAations, and in'lead of two or three per cent, 

 dcmar.d half the bank money for which credit had been 

 given upon tlie depofits that i,he receipts had been rtfpec- 

 tively granted for. The enemy, infirined of the conllitu- 

 tion or the bank, might even buy them up, in order to 

 prevent the carrying away of the treafnre. In fuch emer- 

 gencies, the bank, it is fuppofeJ, would break tliro;;gh its 

 ordinary rale of making payment oijly to the holders of re- 

 ceipts. Tlie holders of receipts, who had no bank money, 

 mull have received within two or tliree per cent.' of the va- 

 lue of the depofit for which their refpedlive receipts liad 

 been granted. The bank, therefore, it is faid, would in 

 this cafe make no fcruple of paying, either with money or 

 bullion, the full value of what the ownei-s of braik money 

 who could get no receipts were credited for in its bouks : 

 paying at the fame time two or three per cent, to fuch 

 holders of receipts as had no bank money, that being the 

 Y/hole value which in this Itate of things could juillv be 

 fuppofed due to them. 



Even in ordinary and quiet times it is the intereft of the 

 holders of receipts to deprefs tlie agto, in order either to 

 buy bank moTiey (and confequently the bullion, which their 

 receipts would then enable them to take out of the bank) 

 fo much cheaper, or to fell their receipts to thofe who have 

 bank money, and who want to take out bullion, fo much 

 dearer j the price of a receipt being generally equal to the 

 difference between the market price of bank money and 

 that of the coin or bullion for which the receipt had been 

 granted. It is the intereil of the owners of bank money, 

 on the contrary, to raife the agio, in order either to fell 

 their bank money fo much dearer, or to buy a receipt fo 

 much cheaper. To prevent the ftock jobbing tricks which 

 thcfe oppufite interells might fometimes occafion, the bank 

 has of late years come to the refolution to fell at all times 

 bank money for currency, at five per cent, agio, and to buy 

 it again at four per cent. agio. In confequence of this re- 

 folution, the agio can never either rife above five, or fink 

 below four per cent, and the proportion between the market 

 price of bank and that of current money, is kept at all 

 times very near to the proportion between their intrinfic 

 values. Before this refolution was taken, the market price 

 of bank money ufed fometimes to rife fo high as nine per 

 cent, agio, and fometimes to link lo law as par, according 

 as oppofite interefls happened to influence the market. 



Tlie bank of Amllerdam profelTes to lend out no part of 

 what is depofited with it, but, for every guilder for which 

 it gives credit in its books, to keep in its repoiitories the 

 value of a guilder either in money or bullion. That it keeps 

 in its repohtories all the money or bullion for which there 

 are receipts in force, for which it is at all limes liable to be 

 called upon, and which, in reality, is continually going 

 from it and returning to it again, cannot well be doubted. 

 But whether it does fo likcwife with regard to that part of 

 its capital, for which the receipts are long ago expired, for 

 which in ordinary and quiet times it cannot be called upon, 

 and which in reality is very likely to remain with it for ever, 

 or as long as the ftates of the United Provinces fnblill, may 

 perhaps appear more uncertain. At Amllerdam, however, 

 r.o point of faith is better ellablilhed than that for every 

 guilder, circulated as bank m.oney, there is a correfpondent 

 guilder in gold or filver to be found in the trealure of the 

 bank. The city is guarantee that it fliould be fo. The 



BAN 



bank is under the dire.'tion of four reigning burgomafters, 

 who are changed every year. Each new fet of burgo- 

 inallets vifits the treafure, compares it with the books, 

 receives it upon oath, and delivers it over, with the fame 

 awful folemnity to the fet wliich fucceeds ; and in liiat 

 fober and religious countr)-, catlis are net yet difiegarded. 

 A rotation of this kind ftems alone a fuilicitnt fccurity 

 againd any praftiees which cannot be avowed. Amidft all 

 the revolutions which faction has evt r occafioncd in the go- 

 vernment of Amfttrdam, the prevailing party has at no 

 time accufed their predecefTors of infidelity in the admini- 

 ftration of the bank. No accufation could have affcited 

 more deeply the reputation and fortune of the difgraccd 

 party, and if fnch an accufation could have been fupportcdj 

 we may be alTurcd, that it would have been brought. In 

 1672, when the French king was at Utrecht, the bank of 

 Amllerdam paid fo readily as left no doubt of the lidelity 

 with which it had obfervcd its engagements. Some of the 

 pieces uhich v/ere then brought from its repoiitories ap- 

 peared to have been fcorchcd with the fire which happened 

 in the town-houfe foon after the bank was tftabliflicd. 

 Thofe pieces, therefore, n.uR have lain there from that 

 tipie. 



What may be the amount of the treafure in the bank, 

 is a queilion which has long employed the fpeculations of 

 the curious. Nothing but conjciflurc can be offered con- 

 cerning it. It is generally reckoned that there ?ie about 

 two thoufar.d people who keep accounts with the bank, and 

 allowing them to have, one with another, the value of fif- 

 teen hundred pounds fterling lying upon their refpeftive ac- 

 counts (a very large allowance), the whole quantity of bank 

 money, and confequently of treafure in the bank, will 

 amount to about three millions fterling, or at eleven guildcrk 

 the pound iterling, thirty-three millions of guilders ; a great 

 fum, and fuffieient to carry on a very extenfive circulation, 

 but vaflly below the extravagant ideas which fome people 

 have formed of this treafure. 



The city of Amllerdam derives a confiderable revenue 

 from the bank. Belides what may be called the warehoufe 

 rent above-mentioned, each perfon, upon fird opening an 

 account with the bank, pays a fee of ten guilders ; and for 

 every new account, three guilders three (livers ; for every 

 transfer two ftivers ; and if the transfer is for lefs than three 

 hundred guilders, fix (livers, in order to difcourage the mul- 

 tiplicity of fniall tranfaftions. The perfon who ncglcfts ta 

 balance his account twice in the year forfeits twenty-five 

 guilders. The perfon who orders a transfer for more than 

 is upon his account, is obliged to pay three per cent, for 

 the fum overdrawn, and his order is fet afide into the bar- 

 gain. The bank is fuppofed too to make a confiderable 

 prolit by the fale of the foreign coin or bullion which fomc- 

 tir.ies falls to it by the expiring of receipts, and which is 

 always kept till it can be fold with advantage. It makes a 

 profit hkewifc by felling bank money at five per cent, agio, 

 and buying it in at four. Thcfe different emolument! 

 amount to a good deal more than what is neceffary for pay- 

 ing the falanes of officers, and defraying the expence of 

 management. What is paid for the keeping of bullion 

 upon receipts, is alone fuppofed to amount to a neat annual 

 revenue of between one hundred and fifty thoufand and 

 two hundred thoufand guilders. Pubhc utility, however, 

 and not revenue, was the original objetl of this inuitution. 

 Its objett was to relieve the merchants from the inconve- 

 nience of a difadvantageous exchange. The revenue which 

 has arifen from it was unforcfeen, and may be confidered 

 as accidental. Smith's Wealth of Nations, vol. ii. p. 219 



— 2^4. 



4C2 Banc 



