Series 1 > Records of a Scottish cloth manufactory at New Mills, Haddingtonshire, 1681-1703

INTRODUCTION
XXV11
ing to Justice’s tables1 the par of exchange represented a
larger number of Flemish ‘ schillings,’ therefore £200 sterling
would be converted into a less number of Flemish coins
than at the par—in other words, a London bill was at a
discount relatively to Amsterdam. Further, in Amsterdam
transactions were effected not only in current coin but
also in bank-money which was at a premium of from
4 to 5 per cent. This premium was known as the ‘ agio.’
Since the New Mills Company received credit for the agio,
it is to be inferred that the exchange of sterling
at London into £2152, 10s. Scots at Amsterdam includes
the discount on exchange, the agio, and possibly some other
charges.
With these data it is possible to restate the transaction.
Drummond accepts payment of a debt of df?200 sterling
from the New Mills Company by a bill payable at London.
How much is this bill worth at Amsterdam ? If British
money exchanged at par, and there were no agio, the bill
would realise the equivalent of J?200 sterling or JP2400
Scots.2 But the exchange was adverse to England, and
allowing for discount, the agio, and perhaps other charges,
£2400 Scots at London realised only £2152, 10s. Scots in
bank-money at Amsterdam. In other words (including the
agio) the discount on this transaction was 10^ per cent., this
again being the discount from London to Amsterdam. Thus
the New Mills Company had credit for £2152, 10s. in'bank-
money of Amsterdam at Amsterdam, and, presumably to
bring the books there into line with those at New Mills,
1 General Treatise on Moneys and Exchanges, 1707 (Bodleian Library), re¬
printed in part in First Nine Years of the Bank of England, pp. 165 et seq.
The par gross (or in current coin) was schillings Flemish 27^, and the rate of
exchange from October 24 to December 12 was 36/7-36/6. For some reason
not explained, the New Mills Company was only credited with exchange at the
rate of 35/ioJ.
2 Taking the pound Scots at the usual ratio of 12 : 1.