foreign bills of exchange of a certain value 
should be paid, not in common currency, but 
by an order upon, or by a transfer in the books 
of a certain bank, established upon the credit
and under the protection of the state, this bank 
being always obliged to pay, in good and true 
money, exactly according to the standard of 
the state. The banks of Venice, Genoa, Amsterdam
Hamburg, and Nuremberg, seem to 
have been all originally established with this 
view, though some of them may have afterwards 
been made subservient to other purposes
The money of such banks, being better 
than the common currency of the country
necessarily bore an agio, which was greater or 
smaller, according as the currency was supposed 
to be more or less degraded below the 
standard of the state. The agio of the bank 
of Hamburg, for example, which is said to 
be commonly about fourteen per cent. is the 
supposed difference between the good standard 
money of the state, and the clipt, worn, and 
diminished currency, poured into it from all 
the neighbouring states. 
Before 1609, the great quantity of clipt and 
worn foreign coin which the extensive trade 
of Amsterdam brought from all parts of Europe, 
reduced the value of its currency about 
nine per cent. below that of good money fresh 
from the mint. Such money no sooner appeared
than it was melted down or carried 
away, as it always is in such circumstances. 
The merchants, with plenty of currency, could 
not always find a sufficient quantity of good 
money to pay their bills of exchange; and the 
value of those bills, in spite of several regulations 
which were made to prevent it, became 
in a great measure uncertain. 
In order to remedy these inconveniences, 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 intrinsic value in the 
good standard money of the country, deducting 
only so much as was necessary for defraying 
the expense of coinage and the other necessary 
expense of management. For the 
value which remained after this small deduction 
was made, it gave a credit in its books
This credit was called bank money, which, as 
it represented money exactly according to the 
standard of the mint, was always of the same 
real value, and intrinsically worth more than 
current money. It was at the same time enacted
that all bills drawn upon or negociated 
at Amsterdam, of the value of 600 guilders 
and upwards, should be paid in bank money
which at once took away all uncertainty in 
the value of those bills. Every merchant, in 
consequence of this regulation, was obliged to 
keep an account with the bank, in order to 
pay his foreign bills of exchange, which necessarily 
occasioned a certain demand for bank 
Bank money, over and above both its intrinsic 
superiority to currency, and the additional 
value which this demand necessarily 
gives it, has likewise some other advantages
It is secure from fire, robbery, and other accidents
the city of Amsterdam is bound for 
it; it can be paid away by a simple transfer
without the trouble of counting, or the risk 
of transporting it from one place to another. 
In consequence of those different advantages
it seems from the beginning to have borne an 
agio; and it is generally believed that all the 
money originally deposited in the bank, was 
allowed to remain there, nobody caring to demand 
payment of a debt which he could sell 
for a premium in the market. By demanding 
payment of the bank, the owner of a bank 
credit would lose this premium. As a shilling 
fresh from the mint will buy no more 
goods in the market than one of our common 
worn shillings, so the good and true money 
which might be brought from the coffers of 
the bank into those of a private person, 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 distinguished. While it 
remained in the coffers of the bank, its superiority 
was known and ascertained. When it 
had come into those of a private person, its 
superiority could not well be ascertained 
without more trouble than perhaps the difference 
was worth. By being brought from the 
coffers of the bank, besides, it lost all the other 
advantages of bank money; its security
its easy and safe transferability, its use in paying 
foreign bills of exchange. Over and above 
all this, it could not be brought from 
those coffers, as will appear by and by, without 
previously paying for the keeping
Those deposits of coin, or those deposits 
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 supposed to constitute but a very small 
part of it. In order to facilitate the trade in 
bullion, the bank has been for these many 
years in the practice of giving credit in its 
books, upon deposits of gold and silver bullion
This credit is generally about five per cent
below the mint price of such bullion. The 
bank grants at the same time what is called
recipice or receipt, entitling the person who 
makes the deposit, or the bearer, to take out 
the bullion again at any time within six months
upon transferring to the bank a quantity of 
bank money equal to that for which credit had 
been given in its books when the deposit was 
made, and upon paying one-fourth per cent
for the keeping, if the deposit was in silver
and one-half per cent. if it was in gold; but 
at the same time declaring, that in default of 
such 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