The beneficial effects of this establishment in Holland were soon perceived, and bank money immediately bore a premium called the agio, which is a term to denote the difference of price between the money of the bank and the coin of the country.

When we consider that coin is only a representative of commodities, and that its utility arises only from its being a generally acknowledged standard of value, by which mankind in the civilized state of society are enabled to calculate the price of articles of exchange, it was not surprising that bank receipts, which represent property also, and at the same time are not liable to risk, danger, or deterioration of any kind, should be held in higher estimation than coin, which is exposed to robbery, and all sorts of casualties.

In all countries where banks have been regular in their transactions and their responsibility undoubted, their paper has carried a premium, more or less, according to circumstances, and the agio of Amsterdam was generally about five per cent.

The Bank Capital. The amount of capital of the Bank of Amsterdam was never exactly ascertained. It was originally constituted by deposits of coin, and there was full value in its coffers for all the credits and receipts it issued. The bank, however, gave credit and receipts also upon deposits of gold and silver bullion, at the rate of five per cent less than the mint price of such bullion, which was restored to the owner if he called for it within six months, upon paying one-fourth per cent if the deposit was in silver, or one-half per cent if in gold. But if the term of six months was allowed to expire, the bank retained the bullion at the price stated in its books.

The advantage of making deposits in this bank was two-fold: First, the credit enabled the merchant to pay his bills of exchange; second, the receipt gave him an opportunity of selling his bullion at an advance price, if the market should fluctuate in his favor. "Although none could draw out bullion without producing a receipt, and reassigning bank money equal to the price at which the bullion had been received, yet it was not absolutely necessary that both credit and receipt should always remain in the hands of the same person; as he who had the receipt could find bank money to buy at the market price, to enable him to relieve the bullion, and the owner of the credit could at all times find receipts in abundance; but to prevent any extraordinary rise in the price of bank money, or receipts, which speculation or other causes might sometimes induce, the bank adopted the resolution of selling bank money for the current coin, at an agio of five per cent, and buying it at the rate of four.

"The city of Amsterdam was guaranty that there should always be full value in the bank to answer all its demands; and as the directors, who were annually changed, compared the treasure with the books, under solemn oath,* * * there could be no probability of fraud."

Managed by the Burgomasters. The four reigning burgomasters were invested with the direction of the bank, and the city of Amsterdam derived a considerable revenue from it, which arose from the following sources: "For all deposits, a fourth or half per cent had to be paid; from every person who opened an account, a fee of ten gilders was exacted, and for every additional account, three gilders three stivers; for every transfer, two stivers, or six stivers if the transfer was less than three hundred gilders. If any person overdrew his account, he was fined three per cent on the amount, and his order was set aside. There was also a considerable profit on the sale of foreign coin, or bullion, which was always kept till it could be sold to advantage; and likewise by selling bank money, at five per cent agio, and buying it at four.

Through these various resources, the Bank of Amsterdam became rich and prosperous, and it was supposed to retain in its repositories more gold and silver than any other establishment of the kind in Europe.