penalty of one hundred ducats, or forty-five pounds sterling.*

Venice was at that time a manufacturing and staple town, and a place of great consumption.

The produce of its manufactures amounted to above twelve hundred thousand pounds sterling.

As a manufacturing town and a place of great consumption, it was the interest of Venice to economize the use of metallic money, the cost of which increased its expences and diminished its profits, and to supply its place by bank-paper.

As a staple-town, Venice wanted bank-paper for that portion of consigned commodities only which were appropriated to its consumption. With regard to the rest of the warehoused merchandize, which was

* Histoire de Venisc, par Laugier. The Abbé Laugier, in the fifth volume, page 532, after having related the death of Thomas (or Tommaso) Mocenigo, the fifty-eighth doge or duke of Venice, which happened in 1423, adds: "Thomas Mocenigo fit faire un réglement très essentiel pour la sureté du commerce. Le change s'étoil fait jusques là en papier, il fut réglé qu'on le feroit à l'avenir en argent comptant sous peine de cent ducats d'amende.” This fact, as it strengthens the opinion of those who think that the convertibility of bank-notes into metallic money of proper weight and fineness, is the only way of keeping gold and silver in the country, is extremely remarkable. I have endeavoured to find a more ample statement of it in the old historians of Venice: but M. Ant. Sabellico, in his Historia Rerum Venetarum ab urbe condita, makes no mention of the fact; and Lod. Ant. Muratori, in his Annali d'Italia, second edition, Milan, 1753, vol. xiii, page 80, simply says: "Curiosissime sono le aringhe di questo doge, rapportate dal Sanuto, perchè ci fan tra l'altre cose vedere qual fosse allora l'opulenza dell' inclita cilta di Venezia. Yet Sanuto, in his Fitæ Ducum Venetorum Italicè scriptæ apud Muratori, Rerum

to be conveyed to strangers, and which left only a commission to the Venitian merchants, the use of metallic currency was very immaterial, because the finding of the sums thus employed fell upon the foreign consumers. But as consumption is stimulated by cheapness and impeded by dearness, it was the interest of Venice, even as a staple-town, to economize the use of coin, because its cost was a dead loss to the consumer, and obstructed consumption.

Thus in the triple capacity of a manufacturing town, of a staple-town, and of a place of great consumption, it was the interest of Venice, that its commercial payments should be made in bank-paper.

But the wars in which the government of Venice was engaged with the Albanese and the dukes of Milan, occasioned considerable expences which could not be discharged otherwise than in metallic money. Commerce had not made sufficient progress, its resources were not sufficiently extensive, to relieve the wants of government and economize its expences; and as government considered payments in bank-paper as causing coin to disappear from circulation, or at least of rendering it more scarce, and making government purchase it at a higher price, it thought it had attained its end by ordering payments to be made in specie. Thus the interests of commerce often appear in opposition to the well or ill understood interests of government, and are sacrificed to it without any scruple *.

Italicarum Scriptores, vol. xxii. col. 885. and seq. does not allude to the aforementioned circumstance.-T.

* In this case the interest of government was the interest of the country, to which the interests of commerce ought always to be

Whether this measure of the government of Venice induced the bank to cease paying in bank paper and to make its payments by transfers in its books, I do not know. But, according to Macpherson*, the payments of the bank of Venice are made by mere transfers in its books.

The bank of Genoa, which was founded in 1407, and which owed its existence to the causes that had produced the bank of Venice, was formed upon the same model.†

The foreign and civil wars with which that republic was continually afflicted, forced its government to resort to loans bearing interest, the payment of which was provided for by certain demesnes, and the administration of these demesnes entrusted to a company of eight individuals chosen from among the state creditors. Their association constituted the Bank of St. George.

As the wants of the republic increased in proportion

sacrificed without any hesitation. The recommendation of the Report of the Bullion Committee to the House of Commons to compel the Bank of England to resume its payments in cash in a limited time, is, therefore, neither unprecedented, nor does it deserve the obloquy thrown upon it by Mr. John Hill and others.-T.

*Annals of Commerce, vol. i. page 341.-Macpherson says: "The bank of Venice was established on such judicious principles, and has been conducted through the revolution of many centuries with such prudence, that, though the government have twice, since its establishment, made free with its funds, its credit has remained inviolate and unimpeached. Payments are made in it by transfers, or writing off the sum to be paid from the account of the payer to that of the receiver, without having the trouble of weighing gold or silver."

+ Ilistoire de Gêues, par Foglicttu.

as its power declined, government continued to borrow of the Bank of St. George, and to assign a larger revenue to it; government even made over to the bank the property of several demesnes and important places, the administration of which was entrusted to a council of one hundred individuals, chosen among the holders of bank stock.

it as a

The historiographer of the republic of Genoa notices circumstance worthy of admiration, that during the various changes to which the republic was exposed, and even when it passed under a foreign dominion, the government of the bank experienced no change but what change could a banking company experience, that confined itself to manage the common stock, collect its revenue, and distribute it to the parties concerned? The utmost that could be apprehended was infidelity or negligence in the management; and even this danger was sufficiently removed by the interested superintendance of a council composed of one hundred individuals. What is most to be wondered at is, that the republic, in the midst of its distresses and political troubles, never touched the property of the bank. A proposal of that tendency was made after the bombardment of Genoa, in 1684 but it was rejected, because to touch the money of the bank appeared too dangerous. It would, indeed, have been extremely dangerous, since there is every reason to suppose that the greatest part of the nation were interested in the safety of the property

of the bank.

Moreover, I have not been able to discover what. were the relations of the bank of Genoa to commerce;

whether its transactions consisted in transfers in its books, or in payments in bank paper.

Confined to its primitive object of a chest, from which government might borrow, the Bank of St. George is an excellent institution for public credit; it were to be wished that it had been imitated by the great powers of Europe, when they had recourse to loans. With the assistance of such a bank they would have avoided that confusion in their finances, which always proved so fatal to public credit, so injurious to the honour of governments, and so detrimental to the prosperity of empires.

The bank of Amsterdam was established in 1609, on the model of that of Venice; and it must be acknowledged to have been well adapted to the situation of that city, similar in almost every respect to that of Venice.

Like Venice, Amsterdam was then a staple-town, a perpetual fair, a market constantly open for the exchange of the produce of all climes, and of the industry of all nations. The sales and purchases of the productions of all countries were reciprocally paid by the intervention of the Amsterdam merchants, and the particular commerce of each state had only the balance of its trade to receive or to pay.

Had the merchants of Amsterdam always traded on their own account, like those of Lyons, and had they been able to fix the same term to their engagements, they might, like the Lyonese, have carried on their trade by simply exchanging the documents of their respective debts, as Lyons did for its own private trade.