I have the honor to be, &c.
JOHN ADAMS.
A MEMORIAL CONCERNING THE BANK OF AMSTERDAM.[10]
The Bank of Amsterdam is much more simple than the denomination implies, in general, in the ideas of foreigners.
It differs widely from those of Venice, London, and others, which have a capital, formed by proprietors (actionaries) to whose profit these banks operate. That of Amsterdam makes neither commerce nor loan, but upon real specie, upon their intrinsic value, and upon matters in bars (ingots) of gold and silver.
This bank was erected in 1609. The magistrates of the city opened the project of the bank for the convenience of the merchants; but it is probable it was invented by the merchants themselves, as a remedy for the difficulty of payments, which became more and more considerable and embarrassing.
1. Because there was a great deal of foreign money in the city, with which they made payments reciprocally, amidst eternal disputes, concerning the value to be given or received.
2. Because, in the great number of coins struck by the States, diversely altered, and singularly divided, they had not all a constant circulation, notwithstanding the orders of the sovereign. Some were declined, even below the fixed value, and others were worth more.
3. The external cashiers, which the merchants employed in those times, as they do at present to receive the money, which is due to them in the city, and to pay in their turn what they owe, profited, of the two inconveniences beforementioned to make to themselves gain, which augmented the disorder and the vexation of payments, as well as in writings.
The merchants contrived then to make reciprocal payments, by a simple transposition of debit from one, to the credit of the other; but to this end, it was necessary to assure the validity of payments made in this manner, by a known and real value, and solidly placed under the authority and warranty of the city. The magistracy lent themselves to arrangements, which answered to all these conditions, so that a number of merchants and cashiers deposited at first at their pleasure, a sum in specie, more or less considerable, which was then designated by the commissaries of the bank, as ducats, or rix dollars and others, which money was placed in one of the vaults of the State-House, under the departments assigned for the carrying on of this bank. Those, who carried there their money, were credited for it, upon a leaf of the great book, which was shown to them, and from that time they might make reciprocal payments, as is practised at this day, without handling any cash, with this simple formula, viz.