at any time within six months, upon
paying one fourth per cent. for the keeping.
This receipt will frequently bring no price in
the market. Three guilders, bank money,
generally sell in the market for three guilders
three stivers, the full value of the ducatoons,
if they were taken out of the bank; and before
they can be taken out, one-fourth per
cent. must be paid for the keeping, which
would be mere loss to the holder of the receipt.
If the agio of the bank, however,
should at any time fall to three per cent. such
receipts might bring some price in the market,
and might sell for one and three-fourths
per cent. But the agio of the bank being now
generally about five per cent. such receipts
are frequently allowed to expire, or, as they
express it, to fall to the bank. The receipts
which are given for deposits of gold ducats
fall to it yet more frequently, because a higher
warehouse rent, or one half per cent. must be
paid for the keeping of them, before they can
be taken out again. The five per cent. which
the bank gains, when deposits either of coin
or bullion are allowed to fall to it, may be
considered as the warehouse rent for the perpetual
keeping of such deposits.
The sum of bank money, for which the receipts
are expired, must be very considerable.
It must comprehend the whole original capital
of the bank, which, it is generally supposed,
has been allowed to remain there from the
time it was first deposited, nobody caring either
to renew his receipt, or to take out his
deposit, as, for the reasons already assigned,
neither the one nor the other could be done
without loss. But whatever may be the amount
of this sum, the proportion which it bears to
the whole mass of bank money is supposed to
be very small. The bank of Amsterdam has,
for these many years past, been the great
warehouse of Europe for bullion, for which
the receipts are very seldom allowed to expire,
or, as they express it, to fall to the bank.
The far greater part of the bank money, or of
the credits upon the books of the bank, is supposed
to have been created, for these many
years past, by such deposits, which the dealers
in bullion are continually both making and
withdrawing.
No demand can be made upon the bank,
but by means of a recipice or receipt. The
smaller mass of bank money, for which the
receipts are expired, is mixed and confounded
with the much greater mass for which they
are still in force; so that, though there may
be a considerable sum of bank money, for
which there are no receipts, there is no specific
sum or portion of it which may not at any
time be demanded by one. The bank cannot
be debtor to two persons for the same thing;
and the owner of bank money who has no receipt,
cannot demand payment of the bank
till he buys one. In ordinary and quiet times,
he can find no difficulty in getting one to
buy at the market price, which generally corresponds
with the price at which he can sell
the coin or bullion it entitles him to take out
of the bank.
It might be otherwise during a public calamity;
an invasion, for example, such as that
of the French in 1672. The owners of bank
money being then all eager to draw it out of
the bank, in order to have it in their own
keeping, the demand for receipts might raise
their price to an exorbitant height. The
holders of them might form extravagant expectations,
and, instead of two or three per cent.
demand half the bank money for which credit
had been given upon the deposits that the receipts
had respectively been granted for. The
enemy, informed of the constitution of the
bank, might even buy them up, in order to
prevent the carrying away of the treasure. In
such emergencies, the bank, it is supposed,
would break through its ordinary rule of making
payment only to the holders of receipts.
The holders of receipts, who had no bank
money, must have received within two or
three per cent. of the value of the deposit for
which their respective receipts had been granted.
The bank, therefore, it is said, would in
this case make no scruple of paying, either
with money or bullion, the full value of what
the owners of bank money, who could get no
receipts, were credited for in its books; paying,
at the same time, two or three per cent.
to such holders of receipts as had no bank
money, that being the whole value which, in
this state of things, could justly be supposed
due to them.
Even in ordinary and quiet times, it is the
interest of the holders of receipts to depress
the agio, in order either to buy bank money
(and consequently the bullion which their receipts
would then enable them to take out
of the bank) so much cheaper, or to sell their
receipts to these who have bank money, and
who want to take out bullion, so much dearer;
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 interest of the owners of bank money,
on the contrary, to raise the agio, in order
either to sell their bank money so much dearer,
or to buy a receipt so much cheaper. To
prevent the stock-jobbing tricks which those
opposite interests might sometimes occasion,
the bank has of late years come to the resolution,
to sell at all times bank money for currency
at five per cent. agio, and to buy it in
again at four per cent. agio. In consequence
of this resolution, the agio can never either
rise above five, or sink 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 the proportion between
their intrinsic values. Before this resolution
was taken, the market price of bank money