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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."

+ Histoire de Gênes, par Foglietta.

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.

The historiographer of the republic of Genoa notices it as a 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 ae 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.

But the immense extent of the payments which the merchants of Amsterdam had to make, would not allow their being effected by reciprocal exchanges of debts and demands at certain fixed times. Payments must be made daily, because they were daily wanted; and, in this respect, the bank of Venice suited Amsterdam better than a liquidation by the exchange of debts and demands, as used at Lyons.

By the charter of its foundation, the bank of Amsterdam was authorized to receive the deposit of any sum of money above three hundred gilders; and to pay all bills of exchange exceeding that sum by transfers in its books. The sums deposited were declared safe against any attachment; the city of Amsterdam guaranteed their safety, and engaged to represent them. The amount of these deposits has been estimated very high by some authors, and rather low by others. D'Avenant estimated them to amount to thirty-six millions sterling;* Adam Smith calculates them to amount only to about three millions sterling, or, at eleven gilders the pound sterling, thirty-three millions of gilders.†

Adam Smith was convinced that the deposits in the bank of Amsterdam had been faithfully respected. But a modern English author pretends, that when the French took possession of Holland, it was discovered that the bank had lent part of its deposits to the city of Amsterdam, and to the ancient government of

New Dialogues, 1710.

+Wealth of Nations, London, 1805, vol. ii, page 241.

Holland; but he does not quote the authority on which he grounds his assertion.

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Henry Thornton's Inquiry into the Nature and Effects of the Paper Credit of England, pages 64 and 309.-Mr. Thornton's statements are these: "The Bank of Amsterdam did not issue circulating notes, but was a mere bank for deposits, the whole of which it was supposed by some to keep always in specie. It was discovered, however, when the French possessed themselves of Holland, that it had been used privately to lend a certain part of them to the city of Amsterdam, and a part to the old Dutch government. Neither of the two debts, as I understand, have yet (1802) been discharged." And, although Mr. Thornton quotes no authority, the fact is well known. The late Professor, J. G. Büsch of Hamburgh, in the first Appendix to his Dissertation on Banks, (which was republished after his death by his friend Ebeling, in 1801, under the title of J. G. Büsch's Sämtliche Schriften über Banken und Münzwesen,) states, § 2, page 159: "This is proved by what happened to the Bank of Amsterdam in 1790, when it was' discovered that it had lent more of its original treasure to the state and to the East-India Company, than it should have done." And, § 6, page 166, he expressly states, that the directors acknowledged the fact. George Hassel, in his Statistical Account of the Kingdom of Holland, (Geographisch Statistischer Abriss des Königreichs Holland, Weimar, 1809,) also says, page 65, speaking of the Bank of Amsterdam: "Its credit had lately been impaired but the Directory of the Batavian Republic decreed a tax, on the 22d of June, 1802, for the purpose of remedying the deficit of the bank; by which means the bank money, which was at a discount of two per cent. bore again a premium of 41 per cent. in the end of the same month." These two authorities sufficiently vindicate Mr. Thornton's assertion, and, as I trust, the liberality of the French author will induce him to omit, in a second edition, the concluding sentence of his paragraph, which runs thus: "Mais il ne cite point l'autorité sur laquelle il fonde son assertion; de sorte qu'il est prudent de ne pas y croire,” I have left it untranslated.—T.

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