Deposits of bullion are most commonly made when the price is somewhat lower than ordinary; and they are taken out again when it happens to rise.In Holland the market price of bullion is generally above the mint price, for the same reason that it was so in England before the late reformation of the gold coin.The difference is said to be commonly from about six to sixteen stivers upon the mark, or eight ounces of silver of eleven parts fine and one part alloy.The bank price, or the credit which the bank gives for deposits of such silver (when made in foreign coin, of which the fineness is well known and ascertained, such as Mexico dollars), is twenty-two guilders the mark; the mint price is about twenty-three guilders, and the market price is from twenty-three guilders six to twenty-three guilders sixteen stivers, or from two to three per cent above the mint price.* The proportions between the bank price, the mint price, and the market price of gold bullion are nearly the same.A person can generally sell his receipt for the difference between the mint price of bullion and the market price.A receipt for bullion is almost always worth something, and it very seldom happens, therefore, that anybody suffers his receipt to expire, or allows his bullion to fall to the bank at the price at which it had been received, either by not taking it out before the end of the six months, or by neglecting to pay the one-fourth or one-half per cent in order to obtain a new receipt for another six months.
This, however, though it happens seldom, is said to happen sometimes, and more frequently with regard to gold than with regard to silver, on account of the higher warehouse-rent which is paid for the keeping of the more precious metal.* The following are the prices at which the Bank of Amsterdam at present (September, 1775) receives bullion and coin of different kind:-SILVER
Mexico dollars Guilders B-22 per mark French crownsGuilders B-22 per mark English silver coin Guilders B-22 per mark Mexico dollars new coin 21 10Ducatoons3
Rix dollars 2 8
Bar silver containing eleven-twelfths fine silver 21 per mark, and in this proportion down to 1/4 fine, on which 5guilders are given.
Fine bars, 93 per mark.
GOLD
Portugal coinB-310 per mark Guineas B-310 per mark Louis d'ors new B-310 per mark Ditto old 300New ducats 4 19 8 per ducat Bar or ingot gold is received in proportion to its fineness compared with the above foreign gold coin.Upon fine bars the bank gives 340 per mark.In general, however, something more is given upon coin of a known fineness, than upon gold and silver bars, of which the fineness cannot be ascertained but by a process of melting and assaying.
The person who by ****** a deposit of bullion obtains both a bank credit and receipt, pays his bills of exchange as they become due with his bank credit; and either sells or keeps his receipt according as he judges that the price of bullion is likely to rise or to fall.The receipt and the bank credit seldom keep long together, and there is no occasion that they should.
The person who has a receipt, and who wants to take out bullion, finds always plenty of bank credits, or bank money to buy at the ordinary price; and the person who has bank money, and wants to take out bullion, finds receipts always in equal abundance.
The owners of bank credits, and the holders of receipts, constitute two different sorts of creditors against the bank.The holder of a receipt cannot draw out the bullion for which it is granted, without reassigning to the bank a sum of bank money equal to the price at which the bullion had been received.If he has no bank money of his own, he must purchase it of those who have it.The owner of bank money cannot draw out bullion without producing to the bank receipts for the quantity which he wants.
If he has none of his own, he must buy them of those who have them.The holder of a receipt, when he purchases bank money, purchases the power of taking out a quantity of bullion, of which the mint price is five per cent above the bank price.The agio of five per cent therefore, which he commonly pays for it, is paid not for an imaginary but for a real value.The owner of bank money, when he purchases a receipt, purchases the power of taking out a quantity of bullion of which the market price is commonly from two to three per cent above the mint price.The price which he pays for it, therefore, is paid likewise for a real value.The price of the receipt, and the price of the bank money, compound or make up between them the full value or price of the bullion.
Upon deposits of the coin current in the country, the bank grants receipts likewise as well as bank credits; but those receipts are frequently of no value, and will bring no price in the market.Upon ducatoons, for example, which in the currency pass for three guilders three stivers each, the bank gives a credit of three guilders only, or five per cent below their current value.It grants a receipt likewise entitling the bearer to take out the number of ducatoons deposited at any time within six months, upon paying one-fourth per cent for the keeping.This receipt will frequently bring no price in the market.Three guilders bank money generally sell in the market for three guilders three stivers, the full value of the ducatoons, if they were taken out of the bank; and before they can be taken out, one-fourth per cent must be paid for the keeping, which would be mere loss to the holder of the receipt.If the agio of the bank, however, should at any time fall to three per cent such receipts might bring some price in the market, and might sell for one and three-fourths per cent.But the agio of the bank being now generally about five per cent such receipts are frequently allowed to expire, or as they express it, to fall to the bank.