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digressions, are comprehended in seven Chapters. The first treats of Banks in general; the second exhibits a Compendious historical view of the commerce of the Netherlands, and particularly of Holland, until the epocha of the erection of the Bank of Amsterdam; the third treats of the Bank of Amsterdam ; the fourth contains a compendious history of the trade of England from the time of Julius Cæfar to the epocka of the death of Henry III. in 1272; in the fifth the same history is continued, till the establishment of . the Bank of England; the fixth treats of the Bank of England; the seventh and last is designed to give us an idea of the advantages and disadvantages that Banks may occasion in the societies where they are erected.
The second and fourth Chapters are more inftructive to the Reader than neceflary to the main purpose of the Author, as they contain several historical details that have not a direct reference to the subject of commerce. The first, third, and fixth Chapters, that relate to banks in general, and to the banks of Amsterdam and London in particular, and the seventh, that treats of the advantages and disadvantages of banks, are the result of long and laborious researches, and contain instructive views of these important instruments of commerce.
All the different banks, fays our ingenious Author, may be reduced to two kinds: they are either mere inactive depositories, the value of whose contents circulates in the public,-- or they are commercial depositories, which augment by trade the stock, whose value circulates on the wings of paper-credit. The Bank of Amsterdam is of the first kind : ic carries on no immediate commerce of its own : far from being the occasion of any prejudice to individuals, it furnilhes them with a place where they may deposit their calh with the most perfect security. By the manner in which payments are made in bank-money among the merchants, the operations of commerce are executed with the greatest facility and expedition. The time and trouble that counting and transporting money must cost are saved, and the person that has deposited his property in the bank has nothing to fear from thieves or bankrupts,
But besides the utility of this eltablishment with respect to merchants and other private persons, there are several advantages resulting from it to the whole community : ift, The treasure of such a repository does not circulate all at once, either in commerce or in the community. 2dly, A repoficory also of this kind disa concerts, or renders fruitless, several operations of particular cashiers, bankers, and stock-jobbers. There is another advantage, which ought scarcely to be mentioned, because it is a matter of the utmost delicacy, and that is, the resource that may be furnished by a bank, in such a period of extremity and danger as may justify the employment of this sacred depofitum.
The Bank of Amsterdam being a mere depository, it is this circumstance that constitutes its capital. For this capital it pays no interest ; on the contrary, the salaries of its officers are paid by the moderate charges to which the persons who have their property in the bank are subject, when they transfer that property, renew their titles in the registers, and on oiher occasions of a like nature. The other profits of the bank are derived from its estimation of the gold and silver deposited, the value at which they are received, and the sums advanced upon these deposits. Thus the bank acquires a revenue that places it above the want of any supply from government,
The case is not the same, lays our Author, with the Bank of England. The principal object of the Bank of Amsterdam, which was erected in the year 160., was to establish mutual confidence among traders, to maintain the credit of the Dutch commerce with foreign nations, and to accelera'e its operations. The Bank of England, which dates its origin from the year 1694, was designed to enable governnient to fill up, with facility, the subscriptions to a loan, which circumstances required. Ai King William's accession to the throne, the national debt amounted to about a million Selling; but the high interest of money, and the great quantity of ipecie that was shut up in the coffers of a small number of individuals, rendered it diffi. cult to raise supplies; it therefore became neceffary to look out for an expedient that might, at the same time, tacilitate the Joan, and reduce interest to a lower rate. The capital that was 'to form the fund of the Bank of England, was not to be a mere deposit, but an object of circulation, designed to give vigour to the circulation of specie, and to produce confidence in all the operations of government relative to the finances. The capital of this Bank was a loan, to which many individuals subscribed with avidity, from the allurement of a high interest. Foreigners, and persons that carried on no trade, were permitted to place their money in the Bank, whole capital circulating both in reality and in representation, increased in adivity and value, and thus occationed a reduction of intereft, which produced great advantages to government, by the savings that resulted from it.
When the subscribers completed the payment of 1,200,000 1. in consideration of an annuity or interest of 100,000 l. this fum was thrown into the exchequer, to support the expences of the war, and the Bank procured elsewhere the funds which it wanted. It employed the same ways and means which the bankers had formerly done at the exchange, with this difference, however, that the bankers had, in their own properly, funds to support their credit, and carry on their operations; whereas
the Bank of England was furnished with money by private persons, either such as placed their money at intereft, or such as deposited it in the Bank with a view to dispore of it at plea. sure. It was upon a capital fo formed, that the bank negotiated afterwards, and derived confiderable profit from making it circulate in commerce at the Exchange of London. All these objects combined enabled the Bank to lower the exorbi. tant interest of money, which had taken place during several years, and to pay to its proprietors, all costs deducted, a divi. dend probably niuch more considerable than the interest which was then common at the Exchange.
Such, according to our Author, are the principles by which the operaţions of ihe Bank' are still directed, with some modis fications that arise from incidental circumftances. The funds of the proprietors of this bank are subject to the disposal of government, and all its negociations elsewhere are supported by its own credit. Our Author fhews, that this credit ought to have for its basis public utility; and he points out some of the principal circumstances that are neceffary to render such an eltablishment useful, and without which, he thinks, it must be rather, in the iflue, prejudicial to the public. We reter our Readers to the Work itself for these details, which are instructive, and furnih matter of serious reflection. Our Author's great principie is, that all paper-circulation, that does not repretent a capital scally existing in a bank, is prejuuicial in the issue ;—and that more especially with respect to a nation, the profperity of whose inhabitants depends upon the activity of their commerce, it is necessary that money alone should be the measure of those things that are the objects of commerce. He thinks, that in order to render the Bank of England a useful establishment, its fund ihould reft upon a capital furnithed by the government or a fociety, - that this capital should be fufficient to supply what the exigencies of commerce often require, --that, for this purpose, one part of this fund should lie inactive in the bank, tu be ready for discounting bills, advancing money on the public revenues, &c. while the other circulated in the public in current specie, or at least in paper, reprek ning not the credit of the Bank, but its solid contents.
According to our Author, the multiplication of circulating specie by bank notes and paper credit, instead of delivering from poverty, only disguises milery for a while. He also observes, that money is debased in proportion as the paper-signs that represent it, are augmented. It retains no longer that primitive value that was annexed to it. He thinks, that the bank, whole capital is in circulation, exposes to danger the fortunes of in. dividuals, and makes an ill use of the confidence which the public has in it, -and that when it sends into circulation by its credit, or its notes, a sum beyond its capital, it heightens the price of provisions, and becomes detrimental to society in many respects.
To estimate the prejudice occasioned by this ideal money, our Author examines the progressive augmentation, that has taken place in the price of things, including in this estim..., houses, lands, the salaries of workmen, as well as victuals, and mercantile wares. But to build his calculations on solid ground, he does not take for his basis the price of things, as it was some years before the ere&tion of the Bank of England, but goes as far backward as the beginning of the reign of Queen Elizabeth, because it was then that filver coin was regulated upon the footing on which it is at present; and also, because, during the whole reigns of her successors, notes or paper credit were in use. Our Author then supposes, that in the time of Queen Elizabeth, there were four millions of specie, that circulated in England, and this account of the matter is generally adopted. He farther supposes, that these four millions were equivalent to five, on account of the difference between the population of England at that time, and its present population. This sum represented the riches of the nation at that period, and was suficient for every object of commerce. About a century after, the current coin in England was valued, by fome able calculators, at eighteen millions and a half; which were then insufficient, if we judge by the credit and paper that were admitted, probably since the conclusion of the reign of Elizabeth, or since the reign of James I. The price of things being tripled since the reign of Queen Elizabeth, the quantity of money, at the beginning of the eighteenth century, must have been tripled alfo, in order to represent the value of things, as they were at the former of these periods. Farther, commerce, in its progress, has comprehended new objects, and thus created new, wants: these objects require an augmentation of fpecie in order to their being continually represented. Again, the national debt, in proportion as it increases, requires a greater mass of money, or of something equivalent to money, in order to its being represented in the commerce of stocks, that is constantly carried on in London ; besides, there must also be a representation, not only of the objects of commerce, but also of the taxes and charges, which increase in proportion to the augmentation of the national debt. To support this heavy burthen, England is obliged to have recourse to ideal money, that is, paper credit. According to the most probable opinion, says our Author, England poflefles, at present, eighteen millions in real specie, and fifteen millions in circulating paper ; and he thinks, that if this great mass of paper had not been introduced, the real specie of eighteen millions would have represented nearly what the thirty millions in specie and paper represent at this day, as all prices must have been proportionably regulated in consequence of this. He makes afterwards several reflexions on the interest of money, and its variations in England, and draws from them some serious conclúfions with respect to the use which this nation has made of its credit. The general truth that results from the discussions contained in this first part of the Second Volume is, that losses and inconveniencies may be occasioned by banks, which greatly exceed the advantages they are capable of procuring to the societies where they are erected.
In the second part of this volume, which we expect from this well-informed writer, with impatience, he promises us a full account of what he understands by circulation, and some reflexions relative to that object. He also proposes, in this second part, to treat concerning the origin of Lombards, of ancient and modern wury, or interest of money, of credit between individuals, of public credit, or of the origin of the present debts of almost all the powers of Europe, and of the influence, which these different objects have upon the general mass of national means.
The third part will begin, by a detail of the effects that have been produced by bills of exchange, in favour of which branch of commerce, our Author implores, with a kind of ardour, the protection and countenance of sovereign princes and states, and desires, that they would act in concert in publifhing, with respect to that most useful and important object, uniform regulations, that may be observed in all countries. This discusion will be followed by our Author's ideas concerna ing the balance of trade, in which he folves the interesting question proposed, at the entrance of his work, viz. Whether commerce is not become too extensive, and (confequently) contrary to the true interests of mankind? Our ingenious Author proposes farther, to add some reflections relative to the true and effential interests of the different European states, to shew that the real riches of every community consist in the number, industry, and manper of living of its inhabitants; and consequently, that whatever is prejudicial to good morals and population, is contrary to the true interests of humanity. All this will be followed by a Supplement to our Author's first volume, containing discoveries relative to the money of the ancients, which have come to his knowledge since the publication of that volume.