The Amsterdamse Wisselbank

The Netherlands was a pioneer in the use of deposit money in the seventeenth century. Traders could open an account by depositing cash at the Amsterdamse Wisselbank (1609–1820). The Wisselbank had a sound reputation as it held practically all of its money in cash (an example of a full reserve bank comparable to what is sought by proponents of a sovereign money system, discussed in Chap. 5). A bank run in the ‘disaster year’ of 1672 did not lead to its bankruptcy, a fate that befell many similar institutions. The Wisselbank emerged as a lynchpin of international trade, with traders doing business by transferring balances to each other. The accounting unit – the bank guilder – played a role comparable to that of the pound sterling in the nineteenth century and the dollar after 1945. But with the Republic’s economic decline and unsecured lending to the Dutch East India Company and the city of Amsterdam (the Wisselbank was a municipal institution), the Wisselbank had squandered its reputation by the end of the eighteenth century. After continuing as a local bank, it finally went bust in 1820.