Thus we saw in the last war, _ann._ 1760, 1761, 1762, that agio was below 5 _per cent._ The reason was plain. The great circulation carried on in Amsterdam was considerably directed towards the uses of the war. _There_ bank money was of no use; coin only could serve the purpose. Accordingly agio fell to —— _per cent._ and as gold was much more easily transported than silver, that metal rose ¼ _per cent._ above the ordinary proportion of 1 to 14½. Demand regulates every thing; and this demand makes the agio fluctuate; sometimes rising above, and sometimes falling bellow 5 _per cent._ ------------------------------------------------------------------------ CHAP. XXXIX. _Continuation of the same Subject; and concerning the Circulation of Coin through the Bank of Amsterdam._ Hitherto we have represented this bank as a gulf, which is calculated to swallow up the coin of Europe; without having pointed out any faculty of throwing up a part of the treasure so secured, in case of an overcharge. This has appeared a mystery to many, and a defect in the constitution of the bank. But when the principles upon which it is established come to be compared with some branches of their administration, which are publicly known, perhaps the mysterious part may be unravelled. And although I do not pretend to give an entire satisfaction as to every minute particular, I think I can shew how, and to what extent, the treasure may circulate, so as to occasion no abuse, either from the hoarding it on one hand, or from the dissipation of it, for the service of the state, on the other: and if all these conjectures shall be found to hang together, and appear consistent with principles, without being contradicted by any known fact, then I may conclude, that such a system of banking as I describe, is at least a possible supposition, whether it exactly coincides with that of Amsterdam, or not. And who knows but my speculations may enable some person of more knowlege and more sagacity than I am possessed of, to render this curious operation of credit still more generally understood than hitherto it has been. I have shewn how the agio rises and falls, according to the demand for bank money. So long, therefore, as the agio does not fall below the difference between the value of the two currencies, it is a proof that all the credit writ in the books of the bank does not exceed the uses for it: consequently, the coin locked up, which never can exceed the credit on the transfer books, and which, were it not locked up, could be of no more service than the credit itself, in circulating the trade of Amsterdam, does not exceed its due proportion: consequently, it is not hurtfully withdrawn from commerce; consequently, no abuse is implied from the hoarding of it.