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The saddest feature was that honor, which was always in the agio, so to speak, was not always solid gold, but alloyed with baser metals. No one circle in the Inferno will boast of greater density of Japanese population than the seventh, to which Dante consigns all victims of self-destruction! And yet, for a true samurai to hasten death or to court it, was alike cowardice.
It is the interest of the owners of bank money, on the contrary, to raise the agio, in order either to sell their bank money so much dearer, or to buy a receipt so much cheaper.
What is called bank money, is always of more value than the same nominal sum of common currency. A thousand guilders in the bank of Amsterdam, for example, are of more value than a thousand guilders of Amsterdam currency. The difference between them is called the agio of the bank, which at Amsterdam is generally about five per cent.
A tax was also levied upon the usurers, who had much gained by trafficking in the paper of the King, that is to say, had taken advantage of the need of those to whom the King gave this paper in payment. This game was called 'agio'. It was said that thirty millions were obtained from this tax. Many people gained much by it; I know not if the King was the better treated.
In consequence of this resolution, the agio can never either rise above five, or sink below four per cent.; and the proportion between the market price of bank and that of current money is kept at all times very near the proportion between their intrinsic values.
The bank is supposed, too, to make a considerable profit by the sale of the foreign coin or bullion which sometimes falls to it by the expiring of receipts, and which is always kept till it can be sold with advantage. It makes a profit, likewise, by selling bank money at five per cent. agio, and buying it in at four.
If the agio of the bank, however, should at any time fall to three per cent. such receipts might bring some price in the market, and might sell for one and three-fourths per cent. But the agio of the bank being now generally about five per cent. such receipts are frequently allowed to expire, or, as they express it, to fall to the bank.
It is upon this account, they say, the bank money sells for a premium, or bears an agio of four or five per cent. above the same nominal sum of the gold and silver currency of the country. This account of the bank of Amsterdam, however, it will appear hereafter, is in a great measure chimerical.
A tax was also levied upon the usurers, who had much gained by trafficking in the paper of the King, that is to say, had taken advantage of the need of those to whom the King gave this paper in payment. This game was called 'agio'. It was said that thirty millions were obtained from this tax. Many people gained much by it; I know not if the King was the better treated.
It was, therefore, with a bitter smile that he listened to my imperfect answers concerning the state of commerce in France, and unmercifully permitted me to involve myself deeper and deeper in the mysteries of agio, tariffs, tare and tret; nor can I charge my memory with his having looked positively angry, until he found me unable to explain the exact effect which the depreciation of the louis d'or had produced on the negotiation of bills of exchange.
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