Part 33

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.

"Gentlemen, the commissioners of the bank; please to pay N. N. five thousand florins. P. G.

Amsterdam, this ----."

By means of which, the book-keepers had not, and have not still, anything to do, but to debit P. G. with five thousand florins, and credit N. N. for the same sum; so that, if they had deposited each one ten thousand florins in cash, there would remain of it, to the credit of P. G. only five thousand florins, and N. N. would have fifteen thousand florins to his, whereof he might dispose, in his turn, the next day, in favor of one or more others having accounts open in the bank. This manner of making payments was found so convenient, and they took such a confidence in it, that all the bankers and merchants, even down to the petty traders, made haste to open an account, and to carry there money, more or less, relatively to approaching payments, which they had to make in bank; so that there was soon a sufficiency of specie deposited for a foundation of all the payments, which were from that time designed to be made in bank, viz. all the bills of exchange of above three hundred florins, drawn by foreigners upon Amsterdam, and in Amsterdam upon foreigners, all the merchandises of the East Indies, the wools of Spain, and some other articles.

It happened then, that they ceased to carry thither the monies of Holland, because the merchants, having occasion alternately, some of the money in bank for current money, and others, of current money for money in bank, they found a great facility in selling one for the other. From thence arose a commerce of agiotage, (_pour l'agio_) which had been already prepared, because it had been resolved, for good reasons without doubt, as in case of a flood of specie, &c. that the bank would not receive the monies, which they would deposit, but at five per cent below the current value; so that to have one thousand florins in bank to one's credit, it was necessary to deposit one thousand and fifty florins in current cash. Behold thus this agio establishment, and the money of the bank, worth five per cent more than the current money. This value of five per cent soon varied, because some one, who found that he had too much money in bank, and was in want of current, sought to sell the first for the second, found a purchaser, who would not give him more than four seveneighths per cent; that is to say, one thousand and fortyeight florins and fifteen stivers, for one thousand in bank. Thus of the rest in such sort, that at all times, when one would buy or sell the money in bank, there is no question but to agree upon the price of the agio, which is subject to a perpetual variation, and which is more or less high, according to the wants of epochs; as for example, when the company makes its sales, the merchants have greater want of money in bank to pay their purchases, which raises the agio, which falls again, when the company would sell that, which is come into them for current money, in which all payments are made for fitting out of vessels.

The payments of bills of exchange, being to be made, as it has been said, in bank money, the price of all exchanges of current money, which were heretofore fixed in bank money, for example, a crown tournois, of sixty sols, the intrinsic value of which, founded upon the price of the money mark, amounted to fiftyseven sols and threefourths, current money of Holland, was placed at fiftyfive sols of bank money; and thus of all the exchanges with all foreign countries; from whence it results, that having sold merchandises of a man of Bordeaux, the amount of which produces net one thousand and fifty florins current, or the credit of one thousand bank, the agio at one hundred and five, when they make him a remittance, or when he draws, they purchase so many crowns as are necessary for the one thousand florins bank, at fiftyfive sols fifteen derniers, which comes to the same thing as if they bought crowns for one thousand and fifty florins current, at fiftyseven and threefourths sols current. When any one would open himself an account in the bank, he goes there himself, and puts his signature upon a book to make it known, and they give him the page upon which his account shall be opened, which he ought always to place at the head of the billet, by which he pays.

They begin with debiting him with ten florins, once for all, after which he pays no more to the bank, but two sols for each bill that he writes, with which they debit him twice a year, when they make the balance of the books, viz. in January and July, at which epochs, each one is obliged to settle accounts with the bank, and to go and demand his pay, to see if they accord with the bank, under the penalty, after six weeks, if they fail or neglect, of paying a fine of twentyfive florins. The bank is shut at these epochs, and continues shut during fourteen or fifteen days, during which time, the bills of exchange sleep, and although they fall due the first day of the shutting, or any day following, they cannot be protested until the second or third day after the opening. There are other little shuttings of the bank, at the feasts, Christmas, Lent, Pentacost; and at the fair, which continue but a few days. One cannot dispose, till the next day, of the money, which enters by the bank, except the second days of the openings, and that of Pentacost. They call these days, the "returns of bills" (_revirement de parties_) or the "recounting," because they pay with that which they receive. One ought to take care, not to dispose beyond one's credit, for not only all the drafts whereof one has disposed are that day stopped, that is to say they are invalid, but one is condemned and obliged to pay a fine of triple of the whole, which one has disposed of more than that which one has in bank.

The person who writes, ought himself to carry his draft to the bank, or at least his attorney, between eight and eleven o'clock in the morning; those who come after until three o'clock, pay six sols fine for each draft. The merchants ordinarily pass a procuration, which it is necessary to renew once a year, to one of their clerks to carry their drafts and demand their payments, which no other person can do.

They transfer every day in the week, except Sunday, and during the shuttings, which are announced some weeks beforehand.

For arranging the merchants, and also for maintaining and favoring the price of matters, and specie of gold and silver, both foreign and that of the country, which are in strictness only of mere commerce, as our ducats and rix dollars, the bank receives them at a value determined and relative to the weight and the title known by the pay-master of the bank, but the sum which they there receive ought not to be below two thousand five hundred florins. The bank gives receipts for the specie, &c. which they deposit there for six months, which are to the bearer; so that, within the time, if the specie or matters exceed, the proprietor may sell his receipt to another, who pays him the surplus of what they are worth of the price at which the bank has received them, and this receipt may thus pass through several hands, as often happens by the idea which they form of the excess or of the deficiency. He who is the bearer of this receipt, may go and take away these matters or specie when he will, in paying at the bank, the value which it has advanced to him who has deposited them, and, moreover, half of a florin for the keeping of them the six months, both upon gold and upon bars of silver, and quarter of a florin upon Mexican dollars, rix dollars, and some other species of money. When this term is expired, one may cause to be renewed the receipts, in paying at the bank the half or quarter florin due thus from six months to six months; but if one let pass that time without taking away his deposit, or without renewing it, it is devolved to the bank, which keeps it to its profit.

The bank is governed under the inspection of the Burgomasters, by six commissaries, chosen and named by the Burgomasters from among the magistrates and principal merchants, under the care of whom is the deposited treasure. They furnish every year in the month of February, a balance of the bank to the Burgomasters, the youngest of whom goes down with them into the vaults, to verify and take account of the number of sacks, and of the specie contained in said balance, and forming the real and effective fund that each one has in the bank; and whatever may have been said or suspected upon this subject, it is very certain, that the fund rolling through the bank, is really there deposited in specie, ingots, and bars of gold and silver. This treasure is not, moreover, so immense as many people imagine. Some authors have written, (without doubt by estimation) that it went as far as three hundred millions of florins, which is not credible, when we consider the returns of the bills (_revirements de parties_) which are continually made, between those who have reciprocal payments to make among themselves. We know very nearly, that there are scarcely more than two thousand accounts open upon the books of this bank; so that in order to make three hundred millions of florins, it is necessary that these two thousand persons should have, one with another, one hundred and fifty thousand florins each in bank, which is beyond all probability, especially, if we consider that A and B having there each one, ten thousand florins, might reciprocally pay themselves sixty thousand florins per week, and thus make a circulation of transposition of one hundred and twenty thousand per week, with twenty thousand of _sign effective_. So that reducing the year to forty weeks of payment, with regard to the intervals which take place in the times of the shuttings, which is too large an allowance, it would result, that with fifty millions, there might be made twelve thousand millions of florins of payments per annum. According to this, and considering that the money in bank brings in no benefit, it is easy to imagine, that there is not much more than is necessary for the circulation of payments in bank, and that its treasure cannot be so considerable as many people imagine.

The bank never lends upon any species of merchandise, nor discounts any paper, nor makes any other profit than the half or quarter of a florin upon the gold and silver there deposited, and which, added to the ten florins for the opening of accounts, and two stivers for each draft of which I have spoken, serves to pay all the expenses of clerks and others, which is occasioned by the bank. The overplus, which is not very considerable, goes to the profit of the city.

No arrest or attachment can be made of any moneys which are in bank, under any pretext; the commissaries, book keepers, and others, who are in the service of the bank, are bound by oath to say nothing of what passes there. No man has a right to require of the bank, the reimbursement in specie of the sum with which he is credited; (_a_) each one having his account only in the receipts of the commissaries, which are in the term of six months. It is certain, that the primitive fund, the receipts for which they have suffered to be extinguished, is no longer demandable, and that one cannot force the commissioners to give specie, but it is not, therefore, the less true, that this fund exists really, and one ought not, and cannot doubt, that if the city was threatened with an inevitable invasion, and if the merchants should require their money, to place it elsewhere in safety, that the Burgomasters would cause it to be paid, by giving so many florins in current money, or value in bars or ingots, with which one should be credited.

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(_a_) The author is here mistaken. All those who have an account in bank, may demand to be paid in ready money, but they cannot require the agio. By consequence, while the bank shall have credit, and there shall be commerce at Amsterdam, which cannot be carried on without the money of the bank, and while there shall be, consequently, an agio, no man will go and demand in ready money, a sum which is worth five per cent more. The author has not well distinguished between the sum of money, or rather the specie, which one may redemand in the term of six months, by means of a receipt, and the money for which one is credited in bank. Behold the difference.

When they have received at the bank a certain quality of gold or silver, whether in money or in bars, for the value of which the bank has credited upon its books the proprietor, (not according to the value which this money has in commerce, but according to its weight and denomination,) in this case, the depositor, or he who holds the receipt, has the right, by means of this receipt, and in restoring to the bank the sum for which the first depositor had been credited, to withdraw this gold or silver, paying one half per cent for the keeping. But, the six months elapsed, the receipt becomes useless, the gold or silver remains in propriety to the bank, and the depositor must content himself to have received in its place, the sum which this gold or silver has been valued at, by which sum he has been credited upon the books, and whereof he might have disposed as he saw good. It is this sum that he has the faculty of redemanding in ready money, when, and as often as he judges proper, and as he is acknowledged upon the books to be a creditor for that sum; but they are not bound to restore him more than the net sum without agio.

No man will be, by consequence, mad enough to cause himself to be paid four or five per cent less than the money of the bank is worth in commerce. But if the money of the bank should be so discredited, that there should be no longer an agio, in that case, all the world would have a right to come and demand at the bank, the amount of the sums for which they are credited; and the bank, whose credit would be ruined, would be obliged, without controversy to make this payment, or to commit bankruptcy. It can never acquire a right of propriety in the capitals for which it has credit upon its books; but in case of restitution, it is not obliged to restore the same matters, or the same money for which it originally gave these credits. Over these the right is lost, with the expiration of the time established for the duration of the receipts, but it is held to the restitution of the amounts of the credits, such as they appear upon the books.

September 26th, 1782.

For the use of Congress, from

JOHN ADAMS.

FOOTNOTE:

[10] From Mr Adams's remarks, at the end of this Memorial, it would seem to have been furnished him by another hand.

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TO M. DE LAFAYETTE.

The Hague, September 29th, 1782.

My Dear General,

I should have written you since the 29th of May, when I wrote you a letter, that I hope you received, if it had not been reported sometimes that you were gone, and at other times, that you were upon the point of going to America.

This people must be indulged in their ordinary march, which you know is with the slow step. We have at length, however, the consent of all the cities and Provinces, and have adjusted and agreed upon every article, word, syllable, letter, and point, and clerks are employed in making out five fair copies for the signature, which will be done this week.

Amidst the innumerable crowd of loans, which are open in this country, many of which have little success, I was much afraid that ours would have failed. I have, however, the pleasure to inform you, that I am at least one million and a half in cash, about three millions of livres, which will be a considerable aid to the operations of our financier at Philadelphia, and I hope your Court, with their usual goodness, will make up the rest that may be wanting.

I am now as well situated as I ever can be in Europe. I have the honor to live upon agreeable terms of civility with the Ambassadors of France and Spain; and the Ministers of all the other powers of Europe, whom I meet at the houses of the French and Spanish Ministers, as well as at Court, are complaisant and sociable. Those from Russia and Denmark are the most reserved. Those from Sardinia and Portugal are very civil. The Ministers of all the neutral powers consider our independence as decided. One of those even from Russia, said so not long ago, and that from Portugal said it to me within a few days. You and I have known this point to have been decided a long time; but it is but lately, that the Ministers of neutral powers, however they might think, have frankly expressed their opinions; and it is now an indication, that it begins to be the sentiment of their Courts, for they do not often advance faster than their masters, in expressing their sentiments upon political points of this magnitude.

Pray what are the sentiments of the _Corps Diplomatique_, at Versailles? What progress is made in the negotiation for peace? Can anything be done before the British Parliament, or at least the Court of St James, acknowledge the sovereignty of the United States, absolute and unlimited?

It would give me great pleasure to receive a line from you, as often as your leisure will admit.

With great esteem, I have the honor to be, Sir, your most obedient servant,

JOHN ADAMS.

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TO JOHN JAY.

The Hague, October 7th, 1782.

Dear Sir,

Your favor of the 28th ultimo, was brought me last night. On Friday last I was notified, by the messenger of their High Mightinesses, that the treaties would be ready for signature on Monday, this day. I am, accordingly, at noon, to go to the Assembly, and finish the business. But when this is done, some time will be indispensable, to prepare my despatches for Congress, and look out for the most favorable conveyances for them. I must also sign another thousand of obligations at least, that the loan may not stand still. All this shall be despatched with all the diligence in my power, but it will necessarily take up some time, and my health is so far from being robust, that it will be impossible for me to ride with as much rapidity as I could formerly, although never remarkable for a quick traveller. If anything in the meantime should be in agitation, concerning peace, in which there should be any difference of opinion between you and your colleague, you have a right to insist upon informing me by express, or waiting till I come.

_8th._ The signature was put off yesterday until today, by the Prince being in conference with their High Mightinesses, and laying his orders to the navy before them.

With great regard, your humble servant,

JOHN ADAMS.

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TO ROBERT R. LIVINGSTON.

The Hague, October 8th, 1782.

Sir,

At twelve o'clock today I proceeded, according to appointment, to the State-House, where I was received with the usual formalities, at the head of the stairs, by M. Van Santheuvel, a Deputy from the Province of Holland, and M. Van Lynden, the first noble of Zealand, and a Deputy from that Province, and by them conducted into the Chamber of Business, (_chambre de besogne_) an apartment belonging to the Truce Chamber, (_chambre de trêve_) where were executed the Treaty of Commerce and the convention concerning recaptures, after an exchange of full powers.

The Treaty and Convention are both closed, or at least an authentic copy of each. If the copy should arrive before the original, which I shall reserve to be sent by the safest opportunity I can find, it will be a sufficient foundation for the ratification of Congress. I hope the treaty will be satisfactory to Congress. It has taken up much time to obtain the remarks and the consent of all the members of this complicated sovereignty. Very little of this time has been taken up by me, as Congress will see by the resolution of their High Mightinesses, containing the power to the Deputies to conclude the treaty; for although all communications were made to me in Dutch, a language in which I was not sufficiently skilled to depend upon my own knowledge, M. Dumas was ever at hand, and ever ready to interpret to me everything in French, by which means I was always able to give my answers without loss of time. The papers, in which the whole progress of this negotiation is contained in Dutch, French, and English, make a large bundle, and after all, they contain nothing worth transmitting to Congress. To copy them would be an immense labor, to no purpose, and to send the originals, at once would expose them to loss.

Several propositions were made to me, which I could not agree to, and several were made on my part, which could not be admitted by the States. The final result contained in the treaty, is as near the spirit of my instructions as I could obtain, and I think it is nothing materially variant from them. The Lords, the Deputies, proposed to me to make the convention a part of the treaty. My answer was, that I thought the convention, which is nearly conformable with that lately made with France, would be advantageous on both sides; but as I had no special instructions concerning it, and as Congress might have objections, that I could not foresee, it would be more agreeable to have the convention separate; so that Congress, if they should find any difficulty, might ratify the treaty without it. This was accordingly agreed to. It seemed at first to be insisted on, that we should be confined to the Dutch ports in Europe, but my friend, M. Van Berckel, and the merchants of Amsterdam, came in aid of me, in convincing all, that it was their interest to treat us upon the footing _gentis-amicissimæ_, in all parts of the world.