Why this subject was chosen is beyond me, and it’s not the first time I’m confronted with this feeling as far as the chosen subjects on the Canon are concerned. It’s easy to be critical, actually criticizing is one of the things we Dutch do best. Nevertheless, there must be better subjects available. Why do I criticize this choice? Because the bank was in the end shut down for malpractice as it was issuing inappropriate loans.
The story of the Amsterdam Exchange Bank started at the beginning of the 17th century when the city had become one of the most important financial centres in the world. After the sack of Antwerp in 1585, the world’s financial centre moved from there north to Amsterdam. Because currency had to be traded and the city was wealthy, it seemed the perfect place to start an Exchange Bank.
As world trade started to centre around Amsterdam, mostly because of the Dutch East India Company, finances started to get complicated with so many currencies around. There were simply too many of them, with the Dutch East India Company also having one of its own. There was a need for a place where you could exchange everybody else his currency into your own.
Bankers were mostly in competition with each other instead of communicating and coming up with solutions. The Italians, however, had got smart and were operating an Exchange Bank in Venice. Someone probably went there, had a look, and saw how it was done (now, this is pure speculation on my part.) Anyway, following the Italians example led us to our own version of the future to become the Dutch National Bank. Companies that deposited money there were given an account courant (lenient) that allowed them to go into the red, a practise unheard of in banking up to that time. The city of Amsterdam guaranteed all transactions.
As the city guaranteed all transactions, it did not allow the bank to issue any loans. That would be speculating with the money of clients that the city was responsible for. Unfortunately, as boys will be boys, so bankers were bankers. They decided to create their own rules and lent out money anyway, mostly to the Dutch East India Company.
In the meantime, cities like London and Hamburg were on the rise, and Amsterdam was slowly losing its leading position. The bank was closed in 1820 as its illegal lending had become apparent, and the Amsterdam administration angry. 1820 were exciting times; 7 years earlier, the nation had become a kingdom after Napoleon was defeated, and the national government started to show its muscle. In 1816 the coin law came into being; it introduced the metric system of 100 cents to a guilder (Dutch national coin up to the introduction of the Euro). Getting back to the Exchange bank, the canon portrays a rather romantic picture of its demise. It says, “it was closed and taken over by the new National Bank of the Netherlands.”
So what’s left to see? Anything tangible? Not really, a few trinkets in a museum, maybe
According to its own rules, for every item mentioned in the canon, there should be something tangible leftover, something to go and see. As for the Amsterdam Exchange bank, there aren’t any. So the canon refers us to the Historic museum where you might find a few old coins, some documents and a “money car” that apparently was used by the bank.
It was housed btw, in the town hall, the present Royal Palace, but there nothing reminds you of its existence either; there is indeed almost nothing left to remind us that Amsterdam once was the financial centre of the world.
One thing is true though the Exchange bank was the forerunner of the Dutch National Bank. After taking all the facts into account, we must conclude that King Willem the first and his rich Amsterdam girlfriend Johanna Jacoba Borski-of de Velde were part of the demise of the Amsterdam Exchange Bank. The bank was eventually closed in 1820, and all its property was turned over to the Dutch National Bank founded in 1814.
There’s more on this and the formation of the National Bank in another chapter of the canon.
The Amsterdam Exchange Bank is window number 11 of the Canon of Amsterdam.