The government of Venice prohibited the circulation of any foreign coins or paper or leather money in its dominions. gIt prohibited dealing in foreign coins by private or public banks?' All foreign coins were required to he sold to the mint, where they were valued, paid for according to their metallic contents and re coined into Venetian pieces. All contracts made payable in coins (none of which contracts con cerned the Giro) were to be liquidated at the rates for. coins named in the laws. The penal ties for infraction extended to entire confisca tion.
The government of Venice brooked no inter ference from the pontifical government. It admitted no ecclesiastics into the management of the Giro. It refused to permit the Inquisi tion to be set up anywhere in the dominions of Venice: a striking contrast with the policy of Genoa.
'The Giro seldom received or paid out.coins or paper money. It dealt only in.its own imag inative money by inscribing debits and credits in its books. All coin transactions were turned over to the depository mentioned further on.
For its transfers of accounts it made no charge.
Those who desired a safe place in which to deposit coined money and draw upon it by transfer of account (as in the Giro) Were served by a branch department or depository strongly built and well guarded which was es tablished for these purposes by the Giro, but without any further connection between the two institutions. The artificial money of the Giro was never mingled or confused with the actual money (coins) of the depository.
Some authorities have imagined that the gUnit2 of the money of account (the artificial or imaginary money of the Giro) was the ducat. This is somewhat misleading. Actual ducats seldom or never went into or out of the Giro. The ducat was the integer, not the ((unit° of its money. Its unit of money was the whole amount of credits (or debits) on its books, multiplied by their rapidity of circulation frotn one account to another. This rapidity or velocity is conjectured to have been about twice a day, at least during its halcyon penod.
The depository (caisse de comptant) was under the influence of finance, commerce and speculation: the Giro was independent of them all. The fund of the depository gwould be exceedingly fluctuating, because it would cor respond with the changes of trade in each year and from year to year. It kept pace with the
exigencies of commerce; was perfectly elastic and impressionable to the movements of trade." This depository failed three times, in 1453, 1600 and 1717. The Giro being independent both of commerce, finance and trade, paid no heed to their exigencies. Its fund was neither elastic nor impressionable. Hence it never failed, in deed it could not fail, because it owed no debts.
While there was no physical relation between the imaginative money of the Giro and the ponderable and portable money (coins) of the state of Venice, the government, for the cons venience of merchants and others keeping ac counts both with the Giro and the depository, created by decree an arbitrary relation between them of 20 per cent, so that it took a hundred ducats in Venetian gold coin to equal in value 80 ducats of account in the Giro. The differ ence was called agio. This agio was afterward sised to 30 per cent and even more, by means f a sur agio, or super-agio; the imaginative ioney being always more valuable than the real.
The so-called (capital° of the Giro in tk 13th century has been estimated at about 2,)0,000 ducats; in the 16th century (discovery ofkinerica and sea-route to India) about 4,000, OM in 1750,5,000,000; in 1797,14,000,000. VVhen in iat year Napoleon captured the Giro the spoi consisted merely of pen, ink and paper: a st of accounts. Not being able to convert theuassets, he left thetn undisturbed and un alteri.
Ciiits in the Giro being guaranteed by the state transferable on its books rendered them .ry desirable, either as investments or as a Ady and reliable means of liquidating annm.eial transactions. These, together with nIblability and other advantages, explain their sullior value compared with coins.
Th.rntout its earlier history all moneys deposit edyith the Giro were treated as loans to the credited to the depositor as Giro money at par and handed over to the treasury. Bnt when the commercial demand for bank money raised it to a premium over coins, the depository was established and the earlier prac tice ceased. The imaginary money of the Giro had become too valuable to be sold for gold or silver coins at par.