both to borrow and lend money. In the former case they gave receipts for the money entrusted to their care, which circulated at their specified value, and thus laid the foundation for the introduction of bank notes. As lenders, they negotiated chiefly with the king, to whom they often advanced the amount of his taxes before they could be collected, thus originating a precedent which was afterwards followed by the Bank of England.

The Bank of England is the largest monetary establishment in the world. It was founded in 1694. Though really a joint-stock company, it has been from its commencement a national rather than a private institution. Its origin may be called political, and marks a most important crisis in the modern history of England. The government which had been established at the Revolution was in want of money. Its circumstances were critical, and therefore its credit poor. The idea of a large banking concern, under state patronage, when suggested by Mr. William Patterson, a Scotch gentleman, was favourably received. A charter was readily granted, and the first subscribed capital, amounting to £1,200,000, was lent to government at the high interest of eight per cent. In three years after, another loan of more than a million was made to government, but this was repaid in 1807. Successive loans, however, have raised the debt on the part of government to the bank to more than eleven millions-a monetary proof that its stability is

immeasurably stronger than that of its poorer predecessor a century and a half ago.

By an act of parliament passed in the year 1708, no firm consisting of more than six partners had been allowed to carry on the business of banking in England. No public institution arose in consequence to compete with the Bank of England; and for a century and a quarter, the monetary business of the country was conducted by that establishment, in conjunction with a number of private bankers. The large and extensive failures, however, which had taken place among the latter, led, in the year 1826, to the repeal of the law of 1708, and banks with an unlimited number of partners, commonly called joint-stock banks, were allowed to be established, subject only to the proviso that none established within sixty-five miles of London should be allowed to issue their own notes. Banks of this description had been opened in Scotland cotemporaneously with the foundation of the Bank of England, and by the prudence of their management had obtained the confidence of the country. The circumstances which gave many of them special security was the fact that the property of all the shareholders was liable for all the engagements of the company.

Early in the present century, savings' banks, intended more especially for the benefit of the humbler classes of society, were introduced, receiving deposits of suns which were small to be lodged in other establishments, and

too

encouraged the depositors by giving a rate of interest somewhat higher than could be obtained elsewhere. They have proved of great advantage to the community, having been the means of introducing economy and providence into the habits of the people, improving their morals, increasing their means, and engaging their interest in the support of public order.

It is interesting to remark, that of the private banks which are established throughout the country, the three London firms of Child's, Hoare's, and Snow's, are even older than the Bank of England. The number of private banks in London in 1848 were seventy-four; and the amount of money transactions carried on chiefly through them is estimated at nearly five millions daily. "In 1840, according to a pamphlet on the subject by the late Mr. Leatham, of Wakefield, the returns of the clearing-house, an establishment in which the accounts of twenty-seven London bankers are daily balanced, amounted to the enormous sum of £975,000,000."

The establishment just mentioned is one of the most remarkable exemplifications of the system of modern banking. It was set on foot in 1770 by the private bankers, and is intended to economize both money and labour in the settlement of their mutual accounts. "The cheques and bills of exchange on the authority of which a great part of the money paid and received by bankers is exchanged, are taken from each of the clearing bankers to the clearing

house several times in the day, and the cheques and bills drawn on one banker are cancelled by those he holds on others." Mr. Tate, in his "System of the London Bankers' Clearances Explained and Exemplified," tells us that "the rapidity with which the last charges require to be entered, and the bustle created by their swift distribution through the room are difficult to be conceived. It is when on the point of striking four, and on days of heavy business, that the beauty of the alphabetical arrangement of the clearer's desk is to be seen. All the dis

tributors are moving in the same direction round the room, with no further interference than may arise from the more active pressing upon or outstripping the slower of their fellowassistants. With equal celerity are their last credits entered by the clearers. A minute or two having passed, all the noise has ceased. The deputy-clearers have left with the last charges on their houses; the clearers are silently occupied in casting up the amounts of the accounts in their books, balancing them, and entering the differences in their balancesheets, until at length announcements begin to be heard of the probable amounts to be received or paid as a preparation for the final settlement. The four o'clock balances having been entered in the balance sheet, each clearer goes round to check and mark off his accounts with the rest, with 'I charge you,' or 'I credit you,' according as each balance is in his favour or against him."

In the banking system of a mercantile community, we reach the highest possible point of refinement in the medium of exchange. What a contrast is presented, for example, between those bars of gold which were weighed to the merchant in ancient times, and the modern bank note! How clumsy the one! what a triumph of ingenuity and skill the other! They may be taken, not inappropriately, as the respective symbols of barbarism and civilization. Let the reader take a five-pound Bank of England note from his pocket-book, and attentively examine it. Mark its thinness; the finest writing-paper is clumsy when compared with it. Hold it up to the light, and it is almost transparent. But though so thin, it is nevertheless characterized by a roughness of texture which alone would enable an experienced clerk to test the genuineness of notes passing through his hand as rapidly as another could count them. Next we have the watermark. This is incorporated in the very texture of the paper, and is effected by a certain arrangement of wires in the mould in which the pulp is taken up. No art has ever yet been able to counterfeit the bevelled edges which distinguish three sides of every Bank of England note. Here, if nowhere else, the plans of the forger are sure to suffer shipwreck. "No one can have failed to remark the exceeding strength of the notes of the Bank of England. The wear they are capable of enduring is astonishing. For the purpose of accumulating