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。
The Bank of Amsterdam professes to lend out no part of what
is deposited with it； but； for every guilder for which it gives
credit in its books； to keep in its repositories the value of a
guilder either in money or bullion。 That it keeps in its
repositories all the money or bullion for which there are
receipts in force； for which it is at all times liable to be
called upon； and which； in reality； is continually going from it
and returning to it again； cannot well be doubted。 But whether it
does so likewise with regard to that part of its capital； for
which the receipts are long ago expired； for which in ordinary
and quiet times it cannot be called upon； and which in reality is
very likely to remain with it for ever； or as long as the States
of the United Provinces subsist； may perhaps appear more
uncertain。 At Amsterdam； however； no point of faith is better
established than that for every guilder； circulated as bank
money； there is a correspondent guilder in gold or silver to be
found in the treasure of the bank。 The city is guarantee that it
should be so。 The bank is 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。 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。 Those pieces； therefore； must have lain there from
that time。
What may be the amount of the treasure in the bank is a
question which has long employed speculations of the curious。
Nothing but conjecture can be offered concerning it。 It is
generally reckoned that there are about two thousand people who
keep accounts with the bank； and allowing them to have； one with
another； the value of fifteen hundred pounds sterling lying upon
their respective accounts （a very large allowance）； the whole
quantity of bank money； and consequently of treasure in the bank；
will amount to about three millions sterling； or； at eleven
guilders the pound sterling； thirty…three millions of guilders… a
great sum； and sufficient to carry on a very extensive
circulation； but vastly below the extravagant ideas which some
people have formed of this treasure。
The city of Amsterdam derives a considerable revenue from
the bank。 Besides what may be called the warehouse…rent above
mentioned； each person； upon first opening an account with the
bank； pays a fee of ten guilders； and for every new account three
guilders three stivers； for every transfer two stivers； and if
the transfer is for less than three hundred guilders； six
stivers； in order to discourage the multiplicity of small
transactions。 The person who neglects to balance his account
twice in the year forfeits twenty…five guilders。 The person who
orders a transfer for more than is upon his account； is obliged
to pay three per cent for the sum overdrawn； and his order is set
aside into the bargain。 The bank is supposed； too； to make a
considerable profit by the sale of the foreign coin or bullion
which sometimes falls to it by the expiring of receipts； and
which is always kept till it can be sold with advantage。 It makes
a profit likewise by selling bank money at five per cent agio；
and buying it in at four。 These different emoluments amount to a
good deal more than what is necessary for paying the salaries of
officers； and defraying the expense of management。 What is paid
for the keeping of bullion upon receipts is alone supposed to
amount to a neat annual revenue of between one hundred and fifty
thousand and two hundred thousand guilders。 Public utility；
however； and not revenue； was the original object of this
institution。 Its object was to relieve the merchants from the
inconvenience of a disadvantageous exchange。 The revenue which
has arisen from it was unforeseen； and may be considered as
accidental。 But it is now time to return from this long
digression； into which I have been insensibly led in endeavouring
to explain the reasons why the exchange between the countries
which pay in what is called bank money； and those which pay in
common currency； should generally appear to be in favour of the
former and against the latter。 The former pay in a species of
money of which the intrinsic value is always the same； and
exactly agreeable to the standard of their respective mints； the
latter is a species of money of which the intrinsic value is
continually varying； and is almost always more or less below that
standard。
PART 2
Of the Unreasonableness of those extraordinary Restraints
upon other Principles
IN the foregoing part of this chapter I have endeavoured to
show； even upon the principles of the commercial system； how
unnecessary it is to lay extraordinary restraints upon the
importation of goods from those countries with which the balance
of trade is supposed to be disadvantageous。
Nothing； however； can be more absurd than this whole
doctrine of the balance of trade； upon which； not only these
restraints； but almost all the other regulations of commerce are
founded。 When two places trade with one another； this doctrine
supposes that； if the balance be even； neither of them either
loses or gains； but if it leans in any degree to one side； that
one of them loses and the other gains in proportion to its
declension from the exact equilibrium。 Both suppositions are
false。 A trade which is forced by means of bounties and
monopolies may be and commonly is disadvantageous to the country
in whose favour it is meant to be established； as I shall
endeavour to show hereafter。 But that trade which； without force
or constraint； is naturally and regularly carried on between any
two places is always advantageous； though not always equally so；
to both。
By advantage or gain； I understand not the increase of the
quantity of gold and silver； but that of the exchangeable value
of the annual produce of the land and labour of the country； or
the increase of the annual revenue of its inhabitants。
If the balance be even； and if the trade between the two
places consist altogether in the exchange of their native
commodities； they will； upon most occasions； not only both gain；
but they will gain equally； or very near equally； each will in
this case afford a market for a part of the surplus produce of
the other； each will replace a capital which had been employed in
raising and preparing for the market this part of the surplus
produce of the other； and which had been distributed among； and
given revenue and maintenance to a certain number of its
inhabitants。 Some part of the inhabitants of each； therefore；
will indirectly derive their revenue and maintenance from the
other。 As the commodities exchanged； too； are supposed to be of
equal value； so the two capitals employed in the trade will； upon
most occasions； be equal； or very nearly equal； and both being
employed in raising the native commodities of the two countries；
the revenue and maintenance which their distribution will afford
to the inhabitants of each will be equal； or very nearly equal。
This revenue and maintenance； thus mutually afforded； will be
greater or smaller in proportion to the extent of their dealings。
If these should annually amount to an hundred thousand pounds；
for example； or to a million on each side； each of them would
afford an annual revenue in the one case of an hundred thousand
pounds； in the other of a million； to the inhabitants of the
other。
If their trade should be of such a nature that one of them
exported to the other nothing but native commodities； while the
returns of that other consisted altogether in foreign goods； the
balance； in this case； would still be supposed even； commodities
being paid for with commodities。 They would； in this case too；
both gain； but they would not gain equally； and the inhabitants
of the country which exported nothing but native commodities
would derive the greatest revenue from the trade。 If England； for
example； should import from France nothing but the native
commodities of that country； and； not having such commodities of
its own as were in demand there； should annually repay them by
sending thither a large quantity of foreign goods； tobacco； we
shall suppose； and East India goods； this trade； though it would
give some revenue to the inhabitants of both countries； would
give more to those of France than to those of England。 The whole
French capital annually employed in it would annually be
distributed among the people of France。 But that part of the
English capital only which was em