evil. They determined that a public warehouse, open to the world, should be established for the safe custody of the international bullion, the most convenient commodity, the money of the great mercantile republic.

This treasury of many nations was constituted a bank of deposit, as described by Adam Smith, for the transfer of accounts, and the delivery of the bullion to the individual owners when required. No part of this treasure was to be lent by the Bank, no profit was to result from it to the owners beyond the advantage of safe custody, honest delivery, and transfer of property.

Adam Smith thus expresses himself respecting this Bank in 1775, more than 150 years after its establishment

P. 287.:

"Amidst all the revolutions which faction has ever occasioned in the Government of Amsterdam, the prevailing party has at no time accused their predecessors of infidelity in the administration of the Bank. No accusation could have affected more deeply the reputation and fortune of the disgraced party; and if such an accusation could have been supported, we may be assured that it would have been brought. In 1672, when the French King was at Utrecht, the Bank of Amsterdam paid so readily as left no doubt of the fidelity with which it had observed its engagements. Some of the pieces which were then brought from its repositories, appeared to have been scorched with the fire which happened in the town-house soon after the Bank was established. pieces, therefore, must have lain there from that time."

These

The relief afforded to the Dutch merchants appears to have been complete; whether that scarcity of good money" to pay their foreign bills of exchange was occasioned by the bullion dealers, and the consequent uncertainty in the value of those bills, or from any other cause, the remedy appears to have been perfect.

The gold and silver bullion, the most convenient of all commodities, under certain circumstances of commerce, that great medium of the exchange, was allowed to perform, unconstrained, its useful office; it perambulated

De globe or was stationary according to the wants of merce and of exchange; to liquidate the balance of God among nations, furnishing the most convenient of

commodities, to supply the deficiency of international merchandise. What rash hand shall interrupt or disturb the circulation of this stream of Pactolus, the life-blood of foreign commerce, the Palladium of industry, the security against bad markets; harmless ss the dove, but wise as the serpent, it holds on, when unconstrained, its salutary course; like the stream that, descending from the mountains, irrigates the plain with countless rills, carrying fruitfulness and plenty through the land; if "cribbed, cabined, and confined," it bursts forth a mountain torrent, carrying ruin and desolation, or, by its absence, converting the fertile plain into a barren waste.

It is to be observed that the Bank of Amsterdam offered the advantage of an instantaneous coinage, a ready Mint, giving, without delay, the bullion deposited, or a credit at the Bank, and a recipice for the bullion received, the one saleable in the market, payable to bearer, and the other transferable. The recipice was to guard the depositors from loss, and the Bank equally from loss, on account of the variation in the relative value of Bank money to currency. The credit in the Bank was a fixed sum, 5 per cent. below the Mint price of bullion, and the Bank required the production of both documents for the amount which it paid. The bearer of both received the bank money. receipt, and he bought another when wanted. He may have sold his

The Bank of Amsterdam was the warehouse for the gold and silver required to carry on the round-about foreign trade, for the bullion required to be transmitted to cover bills drawn to pay the balance of debt; the exchanges were no cause of alarm, because, if excessively unfavourable, a remedy was always at

hand.

And let it be remembered that this Bank was established in that country which one would suppose

the least fitted for such an important trust, exposed to intestine division, the constant seat of war," the prize-fighting stage for all Europe." But such was the mighty power of truth and justice, that nothing could shake the fabric built on so sure a foundation. The high-minded Burgomasters and Directors could still present a fearless front, even with the enemy almost at the gates of Amsterdam. "In 1672, when the French King was at Utrecht, the Bank of Amsterdam paid so readily as left no doubt of the fidelity with which it had observed its engagements.'

It is to be observed that the Bank of Amsterdam was established for the convenience of the merchants, and that it was placed under the guarantee of the city, and "under the direction of the four reigning burgomasters, who are changed every year. Each new set of burgomasters visits the treasure, compares it with the books, receives it upon oath, and delivers it over, with the same awful solemnity, to the set which succeeds; and in that sober and religious country, oaths are not yet disregarded. A rotation of this kind seems alone a sufficient security against any practices which cannot be avowed."

It was considered. as it ought to be, simply a commercial question. The warehousing of the gold and silver, and the delivery of that gold and silver, is purely a mercantile question, and relates only to the most convenient commodity for international commerce. The same rule should apply to the precious metals as to any other international merchandise, bonded under safe custody, for free influx and efflux, like tobacco, tea, or coffee.

This international treasury has nothing to do with banking, beyond the delivery of the bullion and the transfer of accounts or credit. The business of a bank is to lend money, to receive deposits, and to discount bills, and has no relation to the precious metals as merchandise. The exchanges are simply a commercial question, with which no bank has any

insurance, and commission attending the transport of bullion, as of any other commodity. The international treasury also is purely a mercantile question, and the merchants should manage it. They should establish the bank or international treasury for their own convenience and security. Why should the merchants of Great Britain hesitate to do that which was found to be so advantageous to the merchants of Amsterdam ? Are they less wealthy, or less sober, or less religious than those gallant Hollanders? Is the city of London less powerful than Amsterdam? Let the international Bank and Treasury be governed by, and be amenable only to, the international merchants; and what blessings will they confer upon the country!

It is as important that the circulation of this international bullion should be free, as that the circulation of the national coin should be free. The property in this bullion should be as sacred to the use of the individuals of the great mercantile republic, the international traders of all nations, to the owners of this bullion, as the property in the coin belonging to each individual, in the national circulation, is sacred to his use. To interrupt or impede the movement of the national coin, is to interrupt and impede the movement and direction of the commodities circulated within the precincts of each particular country. To interrupt or impede the movement of the bullion, the money of the great mercantile republic, is to interrupt and impede the movement and direction of the commodities circulated among different nations.

If a corporate company had been established at Amsterdam, with the privilege of issuing notes, payable to bearer on demand, for 5l., 10., 20., and 1007., is it to be for one moment supposed that these high-minded, disinterested, and independent Hollanders would have allowed this international bullion, deposited under a promise to restore it to the rightful claimant on demand, is it to be imagined that they would have permitted this sacred deposit to be given up to this corporate company, and to be held

by them in pledge for the payment of their notes, that the merchants would have listened to such a proposal? that the nation would have suffered it?

What the Bank of Amsterdam was, the Bank of England is now, as respects the international bullion; it was not so when Adam Smith wrote. The Bank of Amsterdam was then "the great warehouse of Europe for bullion." May it not be said that the Bank of England is now the great warehouse for bullion, not only for Europe, but for the worldespecially for gold?

Adam Smith conjectured that there might be 2000 depositors, each having 1500l. sterling in the Bank of Amsterdam, amounting to 3,000,000l. sterling in the whole.

Supposing 10,000,000l. to be required in the employment of bullion in the round-about foreign trade of consumption - if we allow 5000 depositors at 20007. each on an average that would complete the sum. If the merchants of Amsterdam could afford to have 3,000,000l., surely the international traders of Great Britain could afford to have three times that sum employed for the same advantageous purpose. It is the most available of all assets, and would be a small sacrifice for so great a benefit; and perhaps a much less sum, perhaps one half only, would, on an average, be required. Let it be remembered that the experiment has been tried, and completely succeeded. The object is to separate the bullion, which is imported and exported for the purposes of foreign trade, from the national bank, and from all banks issuing promissory notes.

No national bank, nor any bank, should be sufficiently powerful in its capital or in its circulation to influence prices generally; the bullion would be taken to the bullion warehouse, and be the property of individuals, who, with their own resources, would pay their foreign bills.

The coin for circulation, and the bullion for expor