Sect. IX.—: Banks of Venice, Amsterdam, &c.

It would far exceed our limits to enter into any detailed statements with respect to the banks and banking systems of foreign countries; we shall therefore confine ourselves to a brief notice of such banks as have been most celebrated, or are at present of the greatest importance.

The Bank of Venice was the most ancient bank in Europe. Historians inform us that the republic being hard pressed for money, was obliged, upon three different occasions, in 1156, 1480, and 1510, to levy forced contributions upon the citizens, giving them in return perpetual annuities at certain rates per cent. The annuities due under the forced loan of 1156, were, however, finally extinguished in the sixteenth century. And the offices for the payment of the annuities due under the other two loans having been consolidated, eventually became the Bank of Venice. This might be effected as follows: The interest on the loan to government being paid punctually, every claim registered in the books of the office would be considered as a productive capital; and these claims, or the right of receiving the annuity accruing thereon, must soon have been transferred, by demise or cession, from one person to another. This practice would naturally suggest to holders of stock the simple and easy method of discharging their mutual debts by transfers on the office books, and as soon as they became sensible of the advantages to be derived from this method of accounting, bank-money was invented.

The Bank of Venice was essentially a deposit bank. Though established without a capital, its bills bore at all times an agio or premium above the current money of the republic. The invasion of the French in 1797 occasioned the ruin of this establishment.

The Bank of Amsterdam was founded in 1609, on strictly commercial principles and views, and not to afford any assistance, or to commix with the finances of the State. Amsterdam was then the great entrepôt of the commerce of the world, and of course the coins of all Europe passed current in it. Many of them, however, were so worn and defaced as to reduce their general average value to about nine per cent. less than their mint value; and, in consequence, the new coins were immediately melted down and exported. The currency of the city was thus exposed to great fluctuations; and it was chiefly to remedy this inconvenience, and to fix the value or par of the current money of the country, that the merchants of Amsterdam established a “bank,” on the model of that of Venice. Its first capital was formed of Spanish ducats or ducatoons, a silver coin which Spain had struck in the war with Holland, and with which the tide of commerce had enriched the country it was formed to overthrow. The bank afterwards accepted the coins of all countries, worn or new, at their intrinsic value, and made its own bank-money payable in standard coin of the country, of full weight, deducting a “brassage” for the expense of coinage, and giving a credit on its books, or “bank-money,” for the deposits.

The Bank of Amsterdam professed not to lend out any part of the specie enstrusted to its keeping, but to retain in its coffers all that was inscribed on its books. In 1672, when Louis XIV. penetrated to Utrecht, almost every one who had an account with the bank demanded his deposit, and these were paid off so readily, that no suspicion could exist as to the fidelity of the administration. Many of the coins then brought forth bore marks of the conflagration which happened at the Hôtel de Ville, soon after the establishment of the bank. This good faith was maintained till about the middle of last century, when the managers secretly lent part of their bullion to the East India Company and Government. The usual “oaths of office” were taken by a religious magistracy, or rather by the magistracy of a religious community, that all was safe; and the good people of Holland believed, as an article of their creed, that every florin which circulated as bank-money, had its metallic constituent in the treasury of the bank, sealed up, and secured by oaths, honesty, and good policy. This blind confidence was dissipated in December 1790, by a declaration that the bank would retain ten per cent. of all deposits, and would return none of a less amount than 2500 florins.

Even this was submitted to and forgiven. But, four years afterwards, on the invasion of the French, the bank was obliged to declare that it had advanced to the States of Holland and West Friesland, and the East India Company, more than 10,500,000 florins, which sum they were, of course, unable to make up to their depositors, to whom, however, they assigned their claims on the States and the company. Bank-money, which previously bore an agio of five per cent., immediately fell to sixteen per cent. below current money.

This epoch marked the fall of an institution which had long enjoyed an unlimited credit, and had rendered the greatest services. The amount of treasure in the vaults of the bank, in 1775, was estimated by Mr Hope at 33,000,000 florins.

The Bank of Hamburgh was established in 1619, on the model of that of Amsterdam. It is purely a deposit bank for the transfer of sums from the account of one individual to that of another. It receives no deposits in coin, but only in bullion of a certain degree of fineness. Down to 1845, it charged itself with the bullion at the rate of 442 schillings the mark, and issued it at the rate of 444 schillings, being a charge of four-ninths, or nearly one-half per cent., for its retention; but since that date, it receives and issues bullion at the same rate, charging one per mille for its expenses. It advances money on jewels to three-fourths of their value. The city is answerable for all pledges deposited with the bank: they may be sold by auction if they remain one year and six weeks without any interest being paid. If the value be not claimed within three years, it is forfeited to the poor. This bank is universally admitted to be very well managed.