AG 10, a term used to denote the dif ference between the real and nominal value of moneys. The Italian word Agio means ease or convenience ; but the Italian for agio. in the sense in which we use the word, is agqio, which is explained to mean " an exchange of money for which the banker has some considera tion." The word is used sometimes to express the variations from fixed pars or rates of exchange, but more generally to indicate by per centages the differences in the valuations of moneys. The follow ing is a simple instance of the meaning of the term aFio, as it is given by Ganilh (Dictionnatre Analgtique d'Economie Po litique):—" Five gold pieces of 20 francs, as they issue from the mint, are worth 100 francs. But if they have been re duced in weight, either by the wear of circulation or by improper means, to the amount of 5 per cent., their real value is only 95 francs, though their nominal value remains the same. The sum of 5 francs, which is necessary to make the real equal to the nominal value, is the agi°." The metallic currency of wealthy states generally consists of its own coin exclu sively, and it is in the power of the state to prevent the degradation of that coin below the standard, so that no calculations of agio, strictly so called, are rendered necessary. In smaller states, the cur rency seldom entirely consists of their own coin, but is made up of the clipt, worn, and diminished coins of the neigh bouring countries with which the inhabit ants have dealings. Under these circum stances, banks were, at different times, established by the governments of Venice, Hamburg, Genoa, Amsterdam, &c., which, under the guarantee of the state, should be at all times bound to receive deposits and to make payments, according to some standard value. The money or obliga tions of these banks, being better than the fluctuating and deteriorated currency of the country, bears a premium equivalent to the deterioration, and this premium is called the agio of the bank.
To facilitate his money-dealings, every merchant trading in a place where the deterioration of the currency is thus remedied, must have an account with the bank for the purpose of paying the drafts of his foreign correspondents, which drafts are always stipulated to be paid in bank or standard money. The
practice being thus universal, the corn mercial money-payments of the place are usually managed without the employment of coin, by u simple transfer in the books of the bank from the account of one mer chant to that of another. The practical convenience which this plan of making their payments affords to merchants, who would otherwise be obliged, when dis charging obligations incurred in standard money, to undergo troublesome and ex pensive examinations of the various coins in use, causes the money of the bank to bear a small premium above its intrinsic superiority over the money in circulation, so that the agio of the bank does not usually form an exact measure of that superiority.
As the current coins of every country have a kind of medium value at which they are generally taken, the term agio is also applied to express what must be be paid over and above this medium value.
But the kinds of money on which, in the case of exchange, an agio is paid, are not always the more valuable intrinsically, hut those which are most in request. For instance, when either gold or paper money is in demand for the purpose of being sent out of the country, those who hold the one or the other may keep it back till an agio is offered them in the current silver money ; and a long period may often elapse before a sufficient quantity of the gold coin that has been sent out has come back to enable people to have it without an agio, while it may happen that at a subsequent time an agio must be paid in order to procure current silver money in place of the gold coin. (Rot track, The term agio is also used to signify the rate of premium which is given when a person having a claim which he can legally demand in only one metal, chooses to be paid iu another. Thus in France silver is the only legal standard, and pay ments can be demanded only in silver coin, a circumstance which is found to be so practically inconvenient, that the re ceiver will frequently pays small premium in order to obtain gold coin, which is more easily transportable : this premium is culled the agio on gold.
There are various meanings of agio in the French language, which are perver sions of the proper and original meaning.