Of the Exchanges and their Nature Inside the city of Paris the carriage of money from one house to another usually costs 5 sols per bag of 1000 livres. If it were necessary to carry it from the Fauxbourg St. Antoine to the Invalides it would cost more than twice as much, and if there were not generally trustworthy porters of money it would cost still more. If there were often robbers on the road the money would be sent in large amounts, with an escort, at greater cost, and if some one charged himself with the transport at his own cost and risks he would require payment for it in proportion to these costs and risks. So it is that the expense of transport from Rouen to Paris and from Paris to Rouen amounts generally to 50 sols per bag of 1000 livres which in the language of the bankers is 1/4 percent. The bankers generally send the money in strong kegs which robbers can hardly carry off because of the iron and the weight, and as there are always mail coaches on this route the costs are not considerable on the large sums sent between these two places.
If the city of Chalons sur Marne every year pays the receiver of the King's taxes, 10,000 ounces of silver on the one hand, and on the other the wine merchants of Chalons and its neighbourhood sell to Paris, through their agents, Champagne wine of the value of 10,000 ounces of silver, if the ounce of silver in France passes in trade for 5 livres, the total of the 10,000 ounces in question will be 50,000 livres both in Paris and in Chalons.
The Receiver of Taxes in this example has 50,000 livres to send to Paris, and the agents of the Chalons wine merchants have 50,000 livres to send to Chalons. This double transaction or transport may be avoided by a set off or as they are called bills of exchange, if the parties get together and arrange it.
Let the agents of the Chalons wine-merchants take (each his own part) the 50,000 livres to the cashier of the Tax Office at Paris. Let him give them one or more cheques or bills of exchange on the Receiver of Taxes at Chalons, payable to their order. Let them endorse or transfer their order to the Chalons wine merchants and these will obtain from the Receiver at Chalons the 50,000 livres. In this way the 50,000 livres at Paris will be paid to the Cashier of the Tax department at Paris and the 50,000 livres at Chalons will be paid to the wine merchants of that City, and by exchange or set off there will be saved the trouble of sending this money from one city to the other. Or else let the wine merchants at Cahlons,who have 50,000 livres at Paris, go and offer their bills of exchange to the Receiver of Taxes, who will endorse them to the cashier of the tax office at Paris who will collect the amount there, and let the Receiver at Chalons pay the merchants for their bills of exchange the 50,000 livres which he has at Chalons. Whichever way this set off is effected, whether the bills of exchange be drawn from Paris, as in this example ounce for ounce is paid, and 50,000 livres for 50,000 livres, the exchange is said to be at par.
The same method might be adopted between these wine merchants at Chalons and the agents of the nobility in Paris who have land in the Chalons district, and the wine merchants or other merchants at Chalons who have sent goods or merchandise to Paris and have money there and other merchants who have drawn merchandise from Paris and sold it at Chalons. If there is a large trade between these two cities bankers will set up at Paris and Chalons who will enter into relations with the interested parties on both sides and will be the agents or intermediaries for the payments which would have to be sent from one of these cities to the other. Now if all the wine and other goods and merchandise which have been sent from Chalons to Paris and have actually been sold there for ready money exceed in value the total receipts of the taxes at Chalons, and the rents which the nobility of Paris have in the Chalons district as well as the value of the goods and merchandise sent from Paris to Chalons and sold there for ready money, by 5000 ounces of silver or 25,000 livres it will be necessary for the banker in Paris to send there for ready money, by 5000 ounces of silver or 25,000 livres it will be necessary for the banker in Paris to send this amount to Chalons in money. This will be the excess or balance of trade between these two cities. It will, I say, be of necessity sent to Chalons in specie, and this operation will be carried out in the following way or in some similar fashion.
The agents or correspondents of the wine merchants of Chalons and of others who have sent goods or merchandise from Chalons to Paris have the money for these sales in hand at Paris.
They are ordered to remit it to Chalons. They are not accustomed to risk it by carriage, they will apply to the cashier to the Tax Office who will give them cheques or bills of exchange on the Receiver of Taxes at Chalons up to the amount which he has at Chalons, and generally at par. But as they need to send further sums to Chalons they will apply to the banker who will have at his disposal the rents of the Paris nobility who have lands in that district. This banker will furnish them, like the Cashier of the Tax Office, with bills of exchange on his correspondent at Chalons up to the amount of the funds which he has at his disposal at Chalons and had been ordered to bring to Paris. This set off will also be made at par, unless the banker tries to make some little profit out of it for his trouble, as well from the agents who apply to him to send their money to Chalons as from the nobility who have charged him with the transmission of their money from Chalons to Paris. If the banker has also at his disposal at Chalons the value of the merchandise sent thither from Paris and sold there for ready money he will also furnish letters of exchange for this value.
