they have received, and are to repay, in some
distant place, at a future time. These
disposable means are employed: First, in
discounting bills. Secondly, in advances of
money in the form of cash credits, loans, or
overdrawn accounts. Thirdly, in the
purchase of government or other securities.
Fourthly, a part is kept in the banker's till,
to meet the current demands. Of these four
ways of employing the capital of the bank,
three are productive, and one is unproductive.
The discounting of bills yields interest, — the
loans, and the cash credits, and the over-
drawn accounts, yield interest, — the government
securities yield interest, — the money
in the till yields no interest.

Banks are useful as places of security for
the deposit of money; their first origin in
this country was a desire on the part of the
merchants of London, to obtain a place where
they might lodge their money in safety.
Banking increases the productive capital of
the nation; the various small sums of money
which would have remained unproductive in
the hands of individuals, are collected into
large amounts in the hands of bankers who
employ it in granting facilities to trade. At
the origin of banking, the new-fashioned
bankers, as they were called, allowed a
certain rate of interest for money placed in their
hands. The banks of Scotland carry this
practice to the greatest extent, as they receive
upon interest so low an amount as ten
pounds; and they also allow interest on the
balance of a running account. Many of the
country bankers in England allow interest on
the balance of a running account, and charge
commission on the amount of money
withdrawn. The London bankers generally do
not allow interest on deposit, but neither do
they charge commission. All their profits are
derived from the use of their customers' money.
The banks of Scotland do not charge commission,
although they allow interest on deposits;
but then those banks have a profit by the
issue of their notes. The London bankers do
not issue notes.

Another advantage conferred upon society
by bankers, is that they make advances to
persons who want to borrow money. People
engaged in commerce are thus enabled to
augment their capital, and consequently their
wealth. In Scotland, branch banks are
sometimes established in poor districts, with a
view of obtaining a future profit from the
prosperity which the bank will introduce.
Again; bankers transmit money from one
part of the country to another, cheaply, and
without risk to the owner thereof.
Commercial travellers, who go collecting money,
derive great advantage from the banks; by
delivering their cash to a bank, which
remits it securely to its destination, they are
relieved from an incumbrance which would
have occasioned them great care and anxiety,
Again where banks are established, it is
easy to obtain change; small or large notes
are procurable as respectively needed. Banks
usually supply their customers and the
neighbourhood with silver ; this is very
convenient to those who have to pay large sums in
wages, or who purchase in small amounts
the commodities in which they trade. If
silver should be too abundant, the banks will
receive it, either as a deposit, or in exchange
for their notes.

Banking is the means of a great saving of
time in money transactions. How much less
time does it take to write a cheque, than to
count out a sum of money in pounds,
shillings, and pence! The banker incurs all
the risk of receiving counterfeit or deficient
coin, or forged notes; the banker takes upon
himself the trouble and expense of presenting
the bills and drafts which a merchant
may draw upon his customers, or which he
may receive in exchange for his goods.
This circumstance alone must cause an
immense saving of expense to a mercantile
house in the course of a year. By keeping
a banker in London, you have a continual
referee to your respectability. This gives
credit, and credit is money. It also enables
you to ascertain the respectability of other
parties who keep bankers. Among nearly
all the bankers in London, the practice is
established of giving information to each
other as to the respectability of their
customers. By means of banks, too, people are
able to preserve an authentic record of their
annual expenditure. In them they find a
secure place of deposit for any deeds, papers,
or other property that may require particular
care. You go into the country, and
you send your plate or jewellery, your last will
and testament, or your life-policy, to your
banker, who will lock them up in his strong
room, and keep them safe from fire and
thieves. In bankers, people find a ready
channel of obtaining information that will be
of service to them in the way of their business.
And lastly, banking exercises a powerful
influence upon the morals of society. It
tends to produce integrity and punctuality in
pecuniary engagements. There is many a
man who would be deterred from dishonesty
by the frown of a banker, though he might
care but little for the admonitions of a
bishop. From all this, it is only a necessary
inference that the profession of a banker
should be honourable and influential.

A very important feature in London banking
is the clearing-house, established about
seventy-five years ago, by some of the London
bankers, for the purpose of facilitating their
exchanges with each other. The object in
view was to exchange bills and cheques
against bills and cheques, and thus be enabled
to carry on their business with a less amount
of capital. But while bankers were
endeavouring to promote their own interest, they
promoted at the same time the interest of the
public. The sums liberated from employment
in this way became available for