Front Page Titles (by Subject) INTRODUCTION. - A History of Banking in all the Leading Nations, vol. 4 (Germany, Austria-Hungary, Netherlands, Scandinavian Nations, Japan, China)
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INTRODUCTION. - A History of Banking in all the Leading Nations, vol. 4 (Germany, Austria-Hungary, Netherlands, Scandinavian Nations, Japan, China) 
A History of Banking in all the Leading Nations; comprising the United States; Great Britain; Germany; Austro-Hungary; France; Italy; Belgium; Spain; Switzerland; Portugal; Roumania; Russia; Holland; The Scandinavian Nations; Canada; China; Japan; compiled by thirteen authors. Edited by the Editor of the Journal of Commerce and Commercial Bulletin. In Four Volumes. (New York: The Journal of Commerce and Commercial Bulletin, 1896). Vol. 4 A History of Banking in all the Leading Nations, (Germany, Austria-Hungary, Netherlands, Scandinavian Nations, Japan, China).
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THE development of Dutch Banking offers but few points for critical remark. An event of real importance, however, arose about 1814, when Holland adopted the bank note system. Before that date, a few resultless attempts had been made toward this important step. Dutch Banking in general followed the type of the exchange banks (Wisselbanken). Although they had increased in the course of years beyond their originally limited sphere, no great progress in principle was apparent. It was only in the nineteenth century that, in all branches of banking, a greater variety of form and a better adaptation of ruling principles of credit to the commercial interests began to appear. In the same degree that economic conditions all around changed, the banks changed their methods from exchanging money to the exchange of credits.
Dutch Banking has a history of about 300 years. Its origin was a natural consequence of the large increase of commerce, which demanded intermediary establishments for money interchanges.
These agencies appeared earlier than in most other European States; the reason for this being in the circumstance that Dutch international commerce had at an early period attained considerable importance. This trade made but little use of the resources of credit. Bills of exchange, which in these days form so predominant a part of the international settlements, were hardly known to the Dutch merchants up to the beginning of the seventeenth century. Most commercial transactions were made in specie. Consequently, a mass of different foreign coins poured into Holland, and were put into circulation, partly with, partly without permission of the authorities. This gave rise to a necessity for authorized agents for the exchange of these coins. These conditions were aggravated by the bad state of currency systems which existed during the sixteenth century in all European States.
The systematic deterioration of coin brought much bad money into the country. Good coins were thus taken from the market, or when left in circulation, brought an agio. All efforts made by the Government to secure a fixed price for each coin proved useless. This deplorable condition had its great drawbacks for trade, and the Dutch monetary system was in such disorder that it only increased the general confusion. A national currency did not exist in Holland. There was but one recognized coin, according to which the various tariffs establishing the prices of coins admitted to circulation were valued. That coin, for a long time, was the “gulden” (guilder); the actual coining of which, however, did not commence until 1681 in the provinces of Holland and Western Friesland. Not only the provinces, but also the towns, struck their own money. Even illegal minting appears to have flourished, which is proved by the repeated prohibitions published against it.
The unbearable state of the currency in the sixteenth and seventeenth centuries, which was aggravated by wars, finds its characteristic expression in the numerous currency decrees of this period. The great number of coins shows sufficiently the many difficulties against which commerce had to contend. The decree of the Earl of Leicester (August 4, 1586* ) is accompanied by a “Beeldenaar of Figuerboeck”—i. e., a collection of copies of coins—which mentions about 130 different kinds of silver coins and 370 gold coins as in circulation. Among the latter are, for example, twelve French crowns, four double and fifty-nine single Italian pistoles, eighteen double and forty-eight single Italian ducats, eighteen Spanish and thirty-eight Hungarian ducats, and seventy-one German goldgulden. On the basis of this decree a “Manuael” (manual) was issued for the use of changers, in which the prices for more than 500 different kinds of gold coins and more than 340 different silver coins were fixed. To the ordinance of the Staaten-Generaal—i. e., the Dutch Parliament—of the provinces of Holland and Western Friesland from December 19, 1603, is attached a “Beeldenaar,” with the copies of 120 silver and about 380 gold coins, amongst which there are fifteen French crowns, five Spanish pistoles, eight double and sixty single Italian pistoles, eighteen double and forty-eight single Italian ducats, thirty-seven Hungarian ducats, and seventy German goldgulden. The “Manuael” for changers, published in accordance with this decree, mentions more than 320 silver and more than 500 gold coins. In the “Beeldenaar,” added to the ordinance of the Staaten-Generaal of the United Netherlands, dating from March 21, 1606, are included the copies of 148 silver and 396 gold coins, and in the corresponding “Manuael” 341 silver and 505 gold coins from many foreign countries.
These figures prove better than any further explanation how difficult it was for a merchant, toward the end of the sixteenth and the beginning of the seventeenth century, to find his way in this maze of money. No wonder that people wished and were compelled to shift this trouble on professional changers, and that the business of money-changing became very lucrative and very important. Cash trade was more and more concentrated in the changers’ offices; and changers in Holland, as well as in Germany and other countries, were the predecessors of the bankers and the banks.
It was thoroughly in accordance with the notions of those days that such an important trade should be licensed. The money-changers were even in the fourteenth century official persons, and remained so afterward. But money-changing seems also to have had a great attraction for other people, and many unlicensed individuals appear to have taken it up. This fact is proved by the complaints of the minting decrees of the Earl of Leicester, August 4, 1586, and that of the Parliament (Staaten-Generaal) of Holland and Western Friesland of December 19, 1603. Those documents say that money-changing was driven to “tot willen, lust ende believen van een yegelyks”—i.e., at the wish, goodwill, and pleasure of everybody. For that reason, it was over and over again impressed by the authorities upon the public that the trade of money-changing was allowed only to duly licensed changers. According to the decree of August 4, 1586, above mentioned, which agrees with the minting ordinances of Emperor Maximilian (December 14, 1489), and of Charles V. (February 4, 1520), concerning money-changers, the generaals van der munte (head manager of the mint) is to appoint as many money-changers in the capital towns of the province as are needed, according to a report of the Town Council. Only persons of good name and reputation, not suspected of unlicensed minting (hegmunterey) might be appointed to this office. The Minting Master gave to the changer an “instruction,” upon which this money-changer had to take an oath. Outside of their offices (named “winkel”) the sworn money-changers were obliged to exhibit the “dish or bowl” (schotel ofte nappe), with the coat of arms of the province painted on the same. They had to purchase precious metals and coins and to exchange the same according to the officially stated prices in the “Manuael.” This “Manuael” was to be kept open on their table, with the signature of the Minting Master, as well as an authorized copy of the existing decrees concerning coins and money-changing. They were not allowed to sell the coinage material to goldsmiths and silversmiths, or to any other person; but they were bound to deliver the same to the mint office of their province.
This the money-changers evidently evaded. They tried to put into circulation again the coins allowed to circulate with an agio, and to sell the purchased precious metals, with a profit, to the goldsmiths and silversmiths. First, by the decree of the Staaten-Generaal of the United Netherlands of March 21, 1606, changers were allowed to sell coinage material to the home manufacturing consumers. By the ordinance of the Staaten-Generaal of Holland and Western Friesland of December 19, 1603, money-changers also had been permitted to supply merchants with such money as they required for their international exchanges. For the rest, the orders of 1603 and 1606 are in accordance with the decree of 1586, with the exception of one point (to which later reference will be made); and the appointment of money-changers rested with the Town Council.
It seems that money-changers were not always very particular with respect to their scales and weights. The above-mentioned decrees (1586, 1603, and 1606) all agree that, in consequence of “this long-lasting war, the conformity and proper bias of weights and scales have not been properly attended to by the masters of the mint, changers, jewelers, goldsmiths and silversmiths, etc. Therefore, it has been urged over and over again that the weights of the changers need to be officially tested and that the scales of the money-changers should be adjusted (justirt), and that unexpected revisions will settle any infringements.” A very interesting new order is to be found in article thirty-seven of the decree of March 21, 1606. That clause forbade all changers to keep money or cash for merchants, or to receive money for their account from any person, or to pay by bills of exchange, or to make remittances, or in any way, directly or indirectly, to make settlements for others. In this article it is stated that certain “money-changers and other people daily attempt to keep either money or cash for merchants, to receive and repay their debts by drafts, bills of exchange, remittances, and other means, and thus give occasion to fraud and cause the replacement of heavier coins by lighter ones.”
The above-mentioned business was known as that of “cashiers,” who are to be considered the immediate predecessors of bankers. No doubt the cashiers had previously existed and owed their origin to the requirements of commerce. It was natural that merchants found it to their interest to place their money transactions in the hands of certain persons familiar with such affairs. So far as can be traced, however, the cashiers are not officially mentioned before the beginning of the seventeenth century.* The authorities did not by any means regard the cashiers with a friendly eye, as their trade offered many occasions for dishonest actions. But it had become indispensable to the merchants. It is evident, from the above-mentioned prohibitions of article thirty-seven of the decree of March 21, 1606, that the money-changers also occupied themselves with the business of cashiers. The money-changers being, naturally, considered wealthy people, enjoyed great credit in the commercial community; they were, moreover, sworn and under official control, and in a position which enabled them to do a cashing trade on the cheapest terms, as they were obliged to keep their own stock of coin and metal in safe places, and thus already possessed the necessary arrangements for safe-keeping in behalf of others. The changers accepted the money of the merchants on deposit, received payments for them, cashed their bills, called in their assignations, bills, etc.; and, on the other hand, made payments for them, but they were not allowed by law to use the deposited funds for their own business.
The foregoing may be regarded as a depositing business in the narrowest sense of the word. These operations cannot be compared to the modern deposit business so perfectly developed; but they may be considered the original form of banking in Holland. At all events, the operations of the first banks in Holland were nothing more than the continuation of the trade of changers and cashiers.
[* ] The literal terms of the above-mentioned and other currency decrees and manuals for changers up to 1609 have been made accessible to me by the courtesy of the “Mint College” (mint office) at Utrecht.
[* ] I suppose that the 270 volumes of the “Resolutien van de Heeren, van de Ridderschap, Edelen ende Gedeputeerden, van de Steden van Holland ende Westfriesland” contain many references concerning the cashiers. The time which has been given me for this treatise does not allow me to consult the above-mentioned rare and valuable collection, which may only be consulted in Holland, and is not allowed to pass into private hands.