The anti-monopolist. [volume] (Saint Paul, Minn.) 1874-1878, 1878-11-28
THE BANK OF VENICE,
From Evening News, Chicago.

From Evening News, Chicago
1t is a squestion just now between
''hard money and ''soft money" men
whether the money issued by the old
bank OF Venice was forced or fiat
money. like our present irredeemable
greenbacks, Or specie basis money,
redeemable in specie on demand.
The best history of the bank of Ven
ice is given in work entitled ways
and Means of PAYMENT by Steven
Colwe]l, citizen of London.
The bank of Venice originated in a
forced loan by the government of .
100000 ducats in Ill; it existed until
1907, when Napoleon capture of the
city overthrow the government. TO
comprehend the extraordinary history
Of this institution several facts must
be stated. The money of the bank
consisted Of transferable credits on
its books; still there was no
specie in its vaults. nor was the bank
bound to make the money originally
deposited good after 1923. even by the
payment OF the interest, which was,
previous to that date, per cent; still
the money of the bank was for 400
years at the high premium of 20 per
cent over the gold and silver money
of Venice. These credits on the
the books of the bank were the funds
in which Venetian debts were chiefly
paid. The question is: why were
they at such premium over gold i!
It could not have been because they
were convertible at will into the
precious metals. If that were the
cause of the premium-or "agio" as
as it was called-on them, the mo-
ment the holders advanced the price
specie would undoubtedly have be.
come the medium of payment, as the
cheaper currency. according to Ores.
ham S law. 1t could not have been
because the circulation of these
credits was extremely limited; the
circulation was very large-$l6. 000,-
600 to 100000 people. or $50 per capita
an amount greatly in excess of any
paper circulation of any other coun-
try that is kept at par. or nearly so.
AS to the conyertibility of the notes
into the precious metals, that was
literally impossible, as the state took
the coin from the bank for its loans.
giving a credit receipt only therefore
We must conclude, then, that the
reason of the premium which the
credits of the bank held over gold
must be found in the following facts:
The credits were made legal tender
in Venice and its dependencies; this
made the money ''fiat or '.forced''
lnoney-the money of account of the
country-specie serving the purpose
that subsidiary coin does with US. be-
ing only used for retail purposes at
home, and aS a commodity. purely.
when exported. The premium on
the credits at first was 90 per cent. but
subsequently was fixed by law at 90
per cent. from which it never varied
as long as the bank existed
The history OF the bank Of England
Tor three or four years after the s,ls-
pension of specie payments in 1877
also proves that legal-tender paper
money can be kept even at premium
over gold ii certain conditions--such
as limitation of issues, receiving them
for all dues To the government. and
paying them out for all debts due by
the governm nt-are observed.
The tact is. the government estab-
lished legal tender unit of account
when 1t created the credits OF the
bank of Venice; for this reason. and
on account of its convenience, the
fact that it could not be forged
clipped or otherwise debased, that
Exchange on Venice Was always in
demand abroad. this Unit Of value was
made legally and artidcialiy more val
ueable than gold and silver.
| Napoleon did not find ducat in the
vaults of the bank OF Venice when lie
| cook possession OF it. He certainly
would have taken the gold if ans
were there.
| Colwell's work stands uncontra-
idicted on all the above points: and he
cites a number of authorities in sup.
port OF his history of this famous IL
stitution which was tiourishiEg near
lv $40 years before the bank OF Eng
land had an existence.