The receipts which are given for deposits of gold ducats fall to it yet more frequently, because a higher warehouse-rent, or one-half per cent must be paid for the keeping of them before they can be taken out again.The five per cent which the bank gains, when deposits either of coin or bullion are allowed to fall to it, may be considered as the warehouse-rent for the perpetual keeping of such deposits.
The sum of bank money for which the receipts are expired must be very considerable.It must comprehend the whole original capital of the bank, which, it is generally supposed, has been allowed to remain there from the time it was first deposited, nobody caring either to renew his receipt or to take out his deposit, as, for the reasons already assigned, neither the one nor the other could be done without loss.But whatever may be the amount of this sum, the proportion which it bears to the whole mass of bank money is supposed to be very small.The Bank of Amsterdam has for these many years past been the great warehouse of Europe for bullion, for which the receipts are very seldom allowed to expire, or, as they express it, to fall to the bank.
far greater part of the bank money, or of the credits upon the books of the bank, is supposed to have been created, for these many years past, by such deposits which the dealers in bullion are continually both ****** and withdrawing.
No demand can be made upon the bank but by means of a recipe or receipt.The smaller mass of bank money, for which the receipts are expired, is mixed and confounded with the much greater mass for which they are still in force; so that, though there may be a considerable sum of bank money for which there are no receipts, there is no specific sum or portion of it which may not at any time be demanded by one.The bank cannot be debtor to two persons for the same thing; and the owner of bank money who has no receipt cannot demand payment of the bank till he buys one.In ordinary and quiet times, he can find no difficulty in getting one to buy at the market price, which generally corresponds with the price at which he can sell the coin or bullion it entities him to take out of the bank.
It might be otherwise during a public calamity; an invasion, for example, such as that of the French in 1672.The owners of bank money being then all eager to draw it out of the bank, in order to have it their own keeping, the demand for receipts might raise their price to an exorbitant height.The holders of them might form expectations, and, instead of two or three per cent, demand half the bank money for which credit had been given upon the deposits that the receipts had respectively been granted for.
The enemy, informed of the constitution of the bank, might even buy them up, in order to prevent the carrying away of the treasure.In such emergencies, the bank, it is supposed, would break through its ordinary rule of ****** payment only to the holders of receipts.The holders of receipts, who had no bank money, must have received within two or three per cent of the value of the deposit for which their respective receipts had been granted.The bank, therefore, it is said, would in this case make no scruple of paying, either with money or bullion, the full value of what the owners of bank money who could get no receipts were credited for in its books; paying at the same time two or three per cent to such holders of receipts as had no bank money, that being the whole value which in this state of things could justly be supposed due to them.
Even in ordinary and quiet times it is the interest of the holders of receipts to depress the agio, in order either to buy bank money (and consequently the bullion, which their receipts would then enable them to take out of the bank) so much cheaper, or to sell their receipts to those who have bank money, and who want to take out bullion, so much dearer; the price of a receipt being generally equal to the difference between the market price of bank money, and that of the coin or bullion for which the receipt had been granted.It is the interest of the owners of bank money, on the contrary, to raise the agio, in order either to sell their bank money so much dearer, or to buy a receipt so much cheaper.To prevent the stock-jobbing tricks which those opposite interests might sometimes occasion, the bank has of late years come to the resolution to sell at all times bank money for currency, at five per cent agio, and to buy it in again at four per cent agio.In consequence of this resolution, the agio can never either rise above five or sink below four per cent, and the proportion between the market price of bank and that of current money is kept at all times very near to the proportion between their intrinsic values.Before this resolution was taken, the market price of bank money used sometimes to rise so high as nine per cent agio, and sometimes to sink so low as par, according as opposite interests happened to influence the market.