448

THE NATURE AND CAUSES Ob'

The holders of them might form extravagant expectations,and, instead of two or three per cent, demand half the bankmoney for which credit had been given upon the depositstliat the receipts had respectively been granted for. Theenemy, informed of the constitution of the bank, might evenbuy them up, in order to prevent the carrying away of thetreasure. In such emergencies, the bank, it is supposed,would break through its ordinary rule of making payment onlyto the holders oi receipts. The holders of receipts, who hadno bank money, must have received within two or three percent, of the value of the deposit for which their respective re-ceipts had been granted. The bank, therefore, it is said,would in this case make no scruple of paying, either with mo-ney or bullion the full value of what the owners of bank mo-ney who could get no receipts were credited for in its books ;paying at the same time two or three per cent, to such hold-ers of receipts as had no bank money, that being the wholevalue which in this state of things could justly be supposeddue to them.

Even in ordinary and quiet times it is the interest of theholders of receipts to depress the agio, in order cither to buybank money (and consequently the bullion, which their re-ceiptswould then cnablethem to take out of the bank) so muchcheaper, or to sell their receipts to those who have bank mo-ney, and who want to take out bullion, so much dearer; theprice of a receipt being generally equal to the difference be-tween the market price of bank money and that of the coinor bullion for which the receipt had been granted. It is theinterest of the owners of bank money, on the contrary, toraise the agio, in order either to sell their bank money so muchdearer, or to buy a receipt so much cheaper. To preventthe stock-jobbing tricks which those opposite interests mightsometimes occasion, the bank has of late years come to theresolution to sell at all times bank money for currency at fiveper cent, agio, and to buy it in again at four per cent. agio.In consequence of this resolution the agio can never eitherrise above five, or sink below lour per cent, and the propor-tion between the market price of bank and that of current mo-ney is kept at all times very near to the proportion betweentheir intrinsic values. Before this resolution was taken, themarket price of bank money used sometimes to rise so high asnine per cent, agio, and sometimes to sink so low as par, ac-cording as opposite interests happened to influence the market.