The Bank of Amsterdam professes to lend out no part of what is deposited with it, but, for every guilder for which it gives credit in its books, to keep in its repositories the value of a guilder either in money or bullion.That it keeps in its repositories all the money or bullion for which there are receipts in force, for which it is at all times 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 so likewise 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 States of the United Provinces subsist, may perhaps appear more uncertain.At Amsterdam, however, no point of faith is better established than that for every guilder, circulated as bank money, there is a correspondent guilder in gold or silver to be found in the treasure of the bank.The city is guarantee that it should be so.The bank is under the direction of the four reigning burgomasters who are changed every year.Each new set of burgomasters visits the treasure, compares it with the books, receives it upon oath, and delivers it over, with the same awful solemnity, to the set which succeeds; and in that sober and religious country oaths are not yet disregarded.A rotation of this kind seems alone a sufficient security against any practices which cannot be avowed.Amidst all the revolutions which faction has ever occasioned in the government of Amsterdam, the prevailing party has at no time accused their predecessors of infidelity in the administration of the bank.No accusation could have affected more deeply the reputation and fortune of the disgraced party, and if such an accusation could have been supported, we may be assured that it would have been brought.In 1672, when the French king was at Utrecht, the Bank of Amsterdam paid so readily as left no doubt of the fidelity with which it had observed its engagements.Some of the pieces which were then brought from its repositories appeared to have been scorched with the fire which happened in the town-house soon after the bank was established.Those pieces, therefore, must have lain there from that time.
What may be the amount of the treasure in the bank is a question which has long employed speculations of the curious.
Nothing but conjecture can be offered concerning it.It is generally reckoned that there are about two thousand people who keep accounts with the bank, and allowing them to have, one with another, the value of fifteen hundred pounds sterling lying upon their respective accounts (a very large allowance), the whole quantity of bank money, and consequently of treasure in the bank, will amount to about three millions sterling, or, at eleven guilders the pound sterling, thirty-three millions of guilders- a great sum, and sufficient to carry on a very extensive circulation, but vastly below the extravagant ideas which some people have formed of this treasure.
The city of Amsterdam derives a considerable revenue from the bank.Besides what may be called the warehouse-rent above mentioned, each person, upon first opening an account with the bank, pays a fee of ten guilders; and for every new account three guilders three stivers; for every transfer two stivers; and if the transfer is for less than three hundred guilders, six stivers, in order to discourage the multiplicity of small transactions.The person who neglects to balance his account twice in the year forfeits twenty-five guilders.The person who orders a transfer for more than is upon his account, is obliged to pay three per cent for the sum overdrawn, and his order is set aside into the bargain.The bank is supposed, too, to make a considerable profit by the sale of the foreign coin or bullion which sometimes falls to it by the expiring of receipts, and which is always kept till it can be sold with advantage.It makes a profit likewise by selling bank money at five per cent agio, and buying it in at four.These different emoluments amount to a good deal more than what is necessary for paying the salaries of officers, and defraying the expense of management.What is paid for the keeping of bullion upon receipts is alone supposed to amount to a neat annual revenue of between one hundred and fifty thousand and two hundred thousand guilders.Public utility, however, and not revenue, was the original object of this institution.Its object was to relieve the merchants from the inconvenience of a disadvantageous exchange.The revenue which has arisen from it was unforeseen, and may be considered as accidental.But it is now time to return from this long digression, into which I have been insensibly led in endeavouring to explain the reasons why the exchange between the countries which pay in what is called bank money, and those which pay in common currency, should generally appear to be in favour of the former and against the latter.The former pay in a species of money of which the intrinsic value is always the same, and exactly agreeable to the standard of their respective mints; the latter is a species of money of which the intrinsic value is continually varying, and is almost always more or less below that standard.
PART 2
Of the Unreasonableness of those extraordinary Restraints upon other Principles IN the foregoing part of this chapter I have endeavoured to show, even upon the principles of the commercial system, how unnecessary it is to lay extraordinary restraints upon the importation of goods from those countries with which the balance of trade is supposed to be disadvantageous.
