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the mint. Such money no fooner appeared than CHAP. it was melted down or carried away, as it always is in fuch circumftances. The merchants, with plenty of currency, could not always find a fufficient quantity of good money to pay their bills of exchange; and the value of thofe bills, in spite of feveral regulations which were made to prevent it, became in a great measure uncertain.

In order to remedy these inconveniencies, a bank was established in 1609 under the guarantee of the city. This bank received both foreign coin, and the light and worn coin of the country at its real intrinfic value in the good standard money of the country, deducting only fo much as was neceffary for defraying the expence of coinage, and the other neceffary expence of management. For the value which remained, after this fmall deduction was made, it gave a credit in its books. This credit was called bank money, which, as it reprefented money exactly according to the standard of the mint, was always of the fame real value, and intrinfically worth more than current money. It was at the fame time enacted, that all bills drawn upon or negotiated at Amfterdam of the value of fix hundred guilders and upwards fhould be paid in bank money, which at once took away all uncertainty in the value of those bills. Every merchant, in confequence of this regulation, was obliged to keep an account with the bank in order to pay his foreign bills of exchange, which neceffarily occafioned a certain demand for bank money.

Bank

BOOK

IV.

Bank money, over and above both its intrinfic fuperiority to currency, and the additional value which this demand neceffarily gives it, has likewife fome other advantages. It is fecure from fire, robbery, and other accidents; the city of Amfterdam is bound for it; it can be paid away by a fimple transfer, without the trouble of counting, or the risk of tranfporting it from one place to another. In confequence of those different advantages, it feems from the beginning to have borne an agio, and it is generally believed that all the money originally depofited in the bank was allowed to remain there, nobody caring to demand payment of a debt which he could fell for a premium in the market. By demanding payment of the bank, the owner of a bank credit would lofe this premium. As a fhilling fresh from the mint will buy no more goods in the market than one of our common worn fhillings, fo the good and true money which might be brought from the coffers of the bank into thofe of a private perfon, being mixed and confounded with the common currency of the country, would be of no more value than that currency, from which it could no longer be readily diftinguished. While it remained in the coffers of the bank, its fuperiority was known and afcertained. When it had come into those of a private perfon, its fuperiority could not well be ascertained without more trouble than perhaps the difference was worth. By being brought from the coffers of the bank, befides, it loft all the other advantages of bank money; its fecu

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rity, its eafy and fafe transferability, its ufe in CHA P. paying foreign bills of exchange. Over and above all this, it could not be brought from those coffers, as it will appear by and by, without previously paying for the keeping.

Thofe depofits of coin, or those depofits which the bank was bound to restore in coin, constituted the original capital of the bank, or the whole value of what was represented by what is called bank money. At present they are fuppofed to constitute but a very fmall part of it. In order to facilitate the trade in bullion, the bank has been for thefe many years in the practice of giving credit in its books upon depofits of gold and filver bullion. This credit is generally about five per cent. below the mint price of fuch bullion. The bank grants at the fame time what is called a recipice or receipt, intitling the perfon who makes the depofit, or the bearer, to take out the bullion again at any time within fix months, upon retransferring to the bank a quantity of bank money equal to that for which credit had been given in its books when the depofit was made, and upon paying one-fourth per cent. for the keeping, if the depofit was in filver; and one-half per cent. if it was in gold; but at the fame time declaring, that in default of fuch payment, and upon the expiration of this term, the deposit should belong to the bank at the price at which it had been received, or for which credit had been given in the transfer books. What is thus paid for the keeping of the deposit may be confidered as a fort of warehoufe

4

BOOK house rent; and why this warehouse rent should IV. be fo much dearer for gold than for filver, feve

ral different reafons have been affigned. The fineness of gold, it has been said, is more diffi. cult to be afcertained than that of filver. Frauds are more easily practised, and occafion a greater lofs in the more precious metal. Silver, befides, being the standard metal, the state, it has been faid, wishes to encourage more the making of depofits of filver than thofe of gold.

Depofits of bullion are most commonly made when the price is fomewhat lower than ordinary; and they are taken out again when it happens to rife. In Holland the market price of bullion is generally above the mint price, for the fame reafon that it was fo in England before the late reformation of the gold coin. The difference is faid to be commonly from about fix to fixteen ftivers upon the mark, or eight ounces of filver of eleven parts fine, and one part alloy. The bank price, or the credit which the bank gives for depofits of fuch filver (when made in foreign coin, of which the fineness is well known and afcertained, fuch as Mexico dollars), is twentytwo guilders the mark; the mint price is about twenty-three guilders, and the market price is from twenty-three guilders fix, to twenty-three guilders fixteen ftivers, or from two to three per cent. above the mint price*. The propor

tions

* The following are the prices at which the bank of Amster dam at prefent (September, 1775) receives bullion and coin of different kinds :

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tions between the bank price, the mint price, and CHA P. the market price of gold bullion, are nearly the fame. A perfon can generally fell his receipt for the difference between the mint price of bullion and the market price. A receipt for bullion is almost always worth fomething, and it very feldom happens, therefore, that any body fuffers his receipt to expire, or allows his bullion to fall to the bank at the price at which it had been received, either by not taking it out before the end of the fix months, or by neglecting to pay the one-fourth or one-half per cent. in order to obtain a new receipt for another fix months. This, however, though it happens feldom, is faid to happen fometimes, and more frequently

Bar filver containing fine filver 21 per mark, and in this pro portion down to fine, on which 5 guilders are given.

Fine bars, 23 per mark.

4 19 8 per ducat.

Bar or ingot gold is received in proportion to its fineness compared with the above foreign gold coin. Upon fine bars the bank gives 340 per mark. In general, however, fomething more is given upon coin of a known fineness, than upon gold and filver bars, of which the fineness cannot be ascertained but by a process of melting and affaying.

VOL. III.

with