------------------------------------------------------------------------ CHAP. XXXVI. _Of Banks of deposit and transfer._ I now dismiss the subject of banks of circulation. The unspeakable advantages drawn from this institution, when properly regulated, in supplying money at all times to those who have property, for the encouragement of industry, and for improvements of all sorts, and the bad consequences which result to society, from the abuse they are exposed to, has engaged me, perhaps, in too long a discussion of particular combinations of circumstances relating to them. I now come to treat of banks of deposit or of transfer of credit: an institution of the greatest utility for commerce. These two species of banks differ essentially in two particulars. 1_mo_, That those of circulation serve the purpose of melting down unwieldy property into money; and of preserving the quantity of it at the proportion of the uses found for it. Those of deposit, are calculated to preserve a sum of coin, or a quantity of precious moveables, as a fund for carrying on the circulation of payments, with a proportional value of credit or paper money secured upon them. 2_do_, In the banks of circulation, the fund upon which the credit is built, is not _corporeally_ in the custody of the bank; in the other it is. The fundamental principle, then, of banks of deposit, is the faithful preservation of the fund delivered to the bank, upon which credit, in money, is taken for the value. If at any time a bank of deposit should lend, or should, in any wise, dispose of any part of this fund, which may consist of coin, bullion, or any other precious moveable, once delivered to them, to the end that a credit in money may be writ down for it in their books of transfer, in favour of the depositor, and his assigns; by that act, the bank departs from the principles upon which it is established. And if any bank is established which, by their regulations, may so dispose of the fund of their credit, then such a bank becomes of a mixed nature, and participates of that of a bank of circulation. These things will be better understood by reasoning from an example of a true bank of deposit. ------------------------------------------------------------------------ CHAP. XXXVII. _Of the Bank of Amsterdam._ Many authors have written concerning this great bank of deposit: particularly, Davenant, Sir William Temple, Ricard, in his _Traité de Commerce revu par Struyk_, the author of the _Essay sur le Commerce_, and Mr. Megens, in his book, which has been translated into English, under the title of _The Universal Merchant_.