This celebrated bank has served as a model to al most every similar establishment in succeeding ages. Its capital is .5,000,090 ducats, for which the re public is security. It is properly a board for depo sit, credit, and interest. By an edict of the state, all payments of wholesale merchandise and bills of exchange must be made in banco, or bank-notes ; and all debtors must lodge their money in the bank, that their creditors may receive payment in banco, which is done, y transferring the amount from the name of the one to that of the other, or by writing off the sum from the account of the debtor, and placing it to that of the creditor. Payments are made in this manner, without the intervention of gold or silver ; but there are exceptions to this rule, in cases of retail trade, or when foreigners wish to carry off the precious metals. All the riches of the state thus flowed into the bank, and through various channels were again diffused among traders, to give activity to the extensive commerce of this opulent and once powerful city. From its good faith, and the regularity of its transactions, the Bank of Venice has always maintained a high character in Europe ; and, on some occasions, its obligations have been more esteemed than the bonds of kings.
During two centuries and a half, the Bank of Ve nice was unrivalled ; for, so gradual is the progress of improvement, that human knowledge is only ma tured by the experience of ages ; and it was not un til the year 1401, that the magistrates of Barcelona established a bank in that city. It was called the " Table of Exchange," rle Canzbi,) and was properly a bank of exchange and deposit. Foreign bills were negotiated with the same liberality as those of the citizens ; and accommodations were extended to strangers as well as to natives. It was altogether calculated for the encouragement of both internal and external commerce ; and the funds of the city were pledged as security for the responsibility of the bank., In the year 1407, the Bank of Genoa commenced; but previous to this time, the republic borrowed large sums of money from the citizens, assigning certain branches of the revenue for the payment of the interest ; and a Board of Management, composed of tli.! most respectable citizens, was appointed to conduct the loans, pay the interest, and account to government for the funds entrusted to its care. From this circumstance, the Genoese claim the merit of establishing a bank as early as the Venetians ; but it is evident, that the transactions of this Board were only an approximation to banking. In process of time, however, the multiplicity and extent of these funds induced disorder and confusion, and it was deem ed expedient to consolidate the whole into one capi tal stock, to be managed by a bank called " Tn.
ClIANIBER OF ST GEORGF.," to be governed by eight protectors, annually elected by the creditors and stockholders. Under this form of government, the affairs of the bank were prosperously conducted ; hut the farther increase of the public debts ; the ac cession of towns and territories, among which was the little kiligdom of Corsica, made the business of the bank greatly more complex ; and the inconve nience of annual successions of new protectors be coming apparent, determined the Genoese, in the year 1414, to elect eight new governors for the ma nagement of the bank, of whom only two were to go out every year.
Before the discovery of a passage to the Indies, by the Cape of Good Hope, the Venetians enjoyed a monopoly of the lucrative trade of the East, by means of the Manunclucks of Egypt, with whom they were leagued by policy and interest, which dif fused opulence and wealth throughout Italy. This extensive commerce created and gave circulation to bills of exchange, the credit and currency of which were universally acknowledged when they bore the signature of the Banks of Italy; and for several cen turies there were no other establishments of the kind in Europe.
The Bank of Amsterdam was established on the 31st January 1609. The magistrates of the city, under authority of the States, declared themselves the perpetual cashiers of the inhabitants, and that all payments, above 600 guilders, (but afterwards re duced to 300,) and bills of exchange, shall be made in the bank, which obliged merchants to open ac counts with it for the payment of their foreign bills. The extensive commerce of Amsterdam involved such a variety of transactions, that the expediency of re gulating them became evident ; and no measure could more effectually secure property, check law suits, and prevent frauds, than the establishment of a bank office, in which all receipts and payments were re gistered in books kept open for the purpose. Dr Smith ascribes the origin of this bank to the debased state of the current coin of Holland, which the trade of Amsterdam brought from all quarters of Europe ; and which was sold at a reduction of nine per cent.• below the money of the mint. Merchants, in such circumstances, could not always find standard money to pay bills of exchange, the value of which was un certain, and accordingly operated against the trade of the United Provinces with foreign nations. But as the bank received the light or worn coin at its real intrinsic value in the good money of the country, and gave credit for the amount in its books, an invariable standard was thus established that tend ed greatly to simplify and facilitate the operations of Commerce.