The Bank of Amsterdam Interesting Sketch of a Famous Monetary Institution.

Te Aroha News, Volume VI, Issue 345, 23 February 1889, Page 5

The Bank of Amsterdam Interesting Sketch of a Famous Monetary Institution.

Faji back in the Middle Ages, say? Professor Thorold Rojjers in ' The Stoiy of the Nations — Holland,' Venice had established a bank which would receive the coins of all nations, and. give warrants to those persons who depo&ited such coins, which warrants should circulate from hand to hand, just as bank notes do now. Three centuries after the Bank of Venice was founded, a similar institution was established at Genoa, on a somewhat similar basis. In 1609, the year of the truce, the Bank of Amsterdam was founded, and before the end of the century was known to have metallic deposits with it to the amount of $180,000,000 — a treasure more prodigious than any European financier at that time thought could be possibly accumulated. The notes issued by the bank were supposed to be, and in theory were, exactly equal in amount to the specie or metallic money deposited in the strong! room of the bank. But the notes of the bank always bore a premium, duo to the convenience of the absolutely guarded security which the holder of the note possessed." Then the bank charged a small sum on every account which was opened with it, a small sum for negotiating bills and transferring balances, besides a profit which they derived from their own subscribed capital and their customers' money at call. The bank was under the management of the Amsterdam corporation, the chiefs of which examined the treasure annually, ard made oath that it was of the full amount at which the manager of the bank affirmed it to be. It was seen that the well-being of this great commercial centre was so much the interest of the Amsterdam municipality that they could be moi-e safely trusted with the control of the institution than any State official could be. When nearly a century afterward the project of starting a great central bank in England was entertained, it was thought for a long time that the system under which the Bank of Amsterdam was managed should be the model of the bank to be established in London. In the end, and fortunately so, other counsels prevailed, for in the seventeenth century London had not been so completely educated in the principles of commercial honour as to make the Amsterdam experiment a safe or convenient mode for English practice. It is remarkable that not a few of the first directors of the Bank of England were Flemish settlers in London, who, driven out for their religion, brought over with them the intelligence, sagacity, and integrity of Netherland finance. The reputation of the Bank of Amsterdam received a remarkable confirmation in 1672. In this year Louis XIV., having secured by heavy bribes the complicity and assistance of Charles 11. of England, declared sudden war on the Dutch It was, perhaps, the most infamous war ever waged, the most unprovoked and the most unexpected. The King of France was at this time at the height of his power. The King of England had been in what was supposed to be firm alliance with Holland, whose Stadtholder, afterwards William 111. of England, was his nephew. The administration of Holland was in the hands of the brothers De Witt, who were supposed to have been wilfully negligent of affairs when the war broke out. The Dutch were panic-struck at the calamity which came on them, and the political enemies of the De Witts goaded the populace on into murdering the two statesmen — a crime to which it is to be feared William was privy, and by which he certainly profited x The Dutch saved themselves from permanent ruin by a prodigious self-in-tlicted calamity. They cut the dykes, laid the country under water and battled the invader. They punished Charles, or rather his people, for the King's perfidy. Now, in that crisis, there was a run on the Bank ot Amsterdam. But the city magistrates took the alarmed depositor.- into the treasury of the bank and showed them its stoic untouched. Among the pieces of money which lay there were masses of coin which had been scorched and hall melted in the great fire which many years before had occurred in the Stadthonse. The panic was allayed, the merchants were satisfied, and the reputation of the bank became higher and higher.