III. that of the coin or bullion for which the receipt CHA P. had been granted. It is the intereft of the owners of bank money, on the contrary, to raise 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 thofe oppofite interefts 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 in again at four per cent. agio. In confequence of this refolution, 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 used fometimes to rife fo high as nine per cent. agio, and fometimes to fink fo low as par, according as oppofite interefts happened to influence the market. The bank of Amfterdam profeffes 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 repofitories the value of a guilder either in money or bullion. That it keeps in its repofitories 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 fo likewife with regard to that part of its capital, for which the receipts IV. BOOK 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 fubfift, 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 correfpondent guilder in gold or filver to be found in the treasure of the bank.. The city is guarantee that it fhould be fo. The bank is under the direction of the four reigning burgomafters, who are changed every year. Each new fet of burgomafters vifits the treafure, compares it with the books, receives it upon oath, and delivers it over, with the fame awful folemnity, to the fet which fucceeds; and in that fober and religious country oaths are not yet difregarded. A rotation of this kind feems alone a fufficient fecurity against any practices which cannot be avowed. Amidst all the revolutions which faction has ever occafioned in the government of Amfterdam, the prevailing party has at no time accufed their predeceffors of infidelity in the adminiftration of the bank. No accufation could have affected more deeply the reputation and fortune of the difgraced party, and if fuch an accufation could have been fupported, we may be affured that it would have been brought. In 1672, when the French King was at Utrecht, the bank of Amfterdam paid fo readily as left no doubt of the fidelity with which it had observed its engagements. Some of the pieces which were then brought III. brought from its repofitories appeared to have CHAP. been fcorched with the fire which happened in the town-houfe foon after the bank was estab. lifhed. Thofe pieces, therefore, must have lain there from that time. What may be the amount of the treasure in the bank, is a queftion which has long employed the fpeculations of the curious. Nothing but conjecture can be offered concerning it. It is generally reckoned that there are about two thoufand people who keep accounts with the bank, and allowing them to have, one with another, the value of fifteen hundred pounds fter. ling lying upon their refpective accounts (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 guilders the pound fterling, thirtythree millions of guilders; a great fum, and fufficient to carry on a very extenfive circulation; but vaftly below the extravagant ideas which fome people have formed of this treafure. The city of Amfterdam derives a confiderable revenue from the bank. Befides what may be called the warehoufe-rent above mentioned, each perfon, upon firft opening an account with the bank, pays a fee of ten guilders; and for every new account three guilders three ftivers; for every transfer two ftivers; and if the transfer is for less than three hundred guilders, fix ftivers, in order to difcourage the multiplicity of finall tranfactions. The perfon who neglects to balance his account twice in the year forfeits twenty BOOK twenty-five guilders. The perfon who orders a IV. 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 bargain. The bank is fuppofed too to make a confiderable profit by the fale of the foreign coin or bullion which fometimes falls to it by the expiring of receipts, and which is always kept till it can be fold with advantage. It makes a profit likewife by felling bank money at five per cent. agio, and buying it in at four. Thefe different emoluments amount to a good deal more than what is neceffary for paying the falaries 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. Public utility, however, and not revenue, was the original object of this inftitution. Its object was to relieve the merchants from the inconvenience of a difadvantageous exchange. The revenue which has arifen from it was unforeseen, and may be confidered as accidental. But it is now time to return from this long digreffion, into which I have been infenfibly led in endeavouring to explain the reasons why the exchange between the countries which pay in what is called bank money, and thofe 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 intrinfic value is always the fame, and exactly agreeable III. agreeable to the standard of their respective c HAP. mints; the latter is a fpecies of money of which the intrinfic value is continually varying, and is almost always more or lefs below that ftandard. PART II. Of the Unreasonableness of thofe extraordinary Restraints upon other Principles. IN the foregoing Part of this Chapter I have endeavoured to fhew, even upon the principles of the commercial fyftem, how unneceffary it is to lay extraordinary reftraints upon the importation of goods from thofe countries with which the balance of trade is fuppofed to be disadvantageous. Nothing, however, can be more abfurd than this whole doctrine of the balance of trade, upon which, not only thefe reftraints, but almost all the other regulations of commerce are founded. When two places trade with one another, this doctrine fuppofes that, if the balance be even, neither of them either lofes or gains; but if it leans in any degree to one fide, that one of them lofes, and the other gains in proportion to its declenfion from the exact equilibrium. Both fuppofitions are falfe. A trade which is forced by means of bounties and monopolies, may be, and commonly is difadvantageous to the country in whose favour it is meant to be established, as I fhall endeavour to fhew hereafter. But that trade |