meat by parliament to the governor and company, or their successors, of the sum of 11,015,1007., being the debt now due from the public to the said governor and company, without any deduction, discount, or abatement whatsoever, and upon payment to the said governor and company and their successors, of all arrears of the sum of 100,000l. per annum," and other moneys due to the Bank, "then and in such case, and not till then, the said exclusive privileges of banking granted by this Act shall cease and determine at the expiration of such notice of twelve months."

& 8 Vict. c. 32, it will be seen are:-1. The separation of the issuing and the banking functions of the Bank of England, with strict limitations as to its issues, and a dif ferent system of account and different officers for each department. The Bank has the power of issuing notes on a fixed amount of securities to the value of 14,000,000l., and any issue beyond this sum must be founded on bullion only. As the stock of bullion in the bank increases or diminishes, so will likewise the issues of bank-notes. 2. The next point of importance is the absolute prohibition of any new bank of issue and the limitation of the issues of all existing banks of issue to an average of the circulation of each bank for the twelve weeks preceding April 12th, 1844. Joint-stock banks in London are empowered to accept bills for any period, instead of such bills being confined to dates of not less than six months. Such are the chief features of the system now 11,015,100 in operation, the practical working of 2,984,900 which, in the course of the ensuing ten years, will be watched with much interest. Another remodelling of the Bank may then again take place according to the act, and an opportunity again be afforded for effecting further changes in banking institutions.

The Gazette of September 14th, 1844, contained the first account of the affairs of the Bank pursuant to the above act: it showed the state of the Bank for the week ending the 7th of September, and was as follows:

28,351,295

14,351,295

28,351,295

£

14,553,000
3,564,729

3.

IV. Banking, as carried on by private establishments and joint-stock associations in London, in other parts of England and in Ireland.-The Italian merchants who, under the name of Lombards, settled in England during the thirteenth century, and previously to that time the Jews, 3,680,809 performed the greatest part of the money 8,644,348 business of the country. They were not, 1,030,354 however, bankers in the modern acceptation of the word, and in fact the busi31,423,240 ness of banking does not appear to have been carried on among us earlier than the middle of the seventeenth century. The goldsmiths of London, who before that time had restricted their trade in 14,554,834 money to the purchase and sale of foreign 7,835,616 coin, then extended their business by bor8,175,025 rowing and lending money. The latter 857,765 part of their business-that of lending -was principally transacted with the king, to whom they made advances on the security of the taxes. They allowed

14,554,834

31,423,240 The most important parts of the act 7

interest to the individuals from whom | The number is at present seventy-four they borrowed, and the receipts which including seven colonial and eight joint they gave for deposits passed from hand stock banks. There are three private to hand in the same manner as Bank-banking-houses still carrying on business notes have since circulated.

which were established before the Bank of England. These are Child's, established in 1663; Hoare's, in 1680; and Snow's, in 1685. The London bankers continued to issue notes for some time after the closing of the Exchequer, but they have long since ceased to do so, acting solely as depositaries of money, discounters of bills, and agents for bankers established in the country. No restriction has ever existed which prevents private banks in London, if they have not more than six partners, from issuing their notes payable to bearer; that they have ceased to do so has arisen from the conviction that paper money, issued on the security of only a small number of individuals, could not circulate profitably in competition with that of a powerful

The taking of interest for the use of money was not rendered legal in England until 1546, when the rate that could be demanded was fixed at 10 per cent. In 1624 the legal rate was reduced to 8 per cent., and a further reduction to 6 per cent. took place in 1651. At this rate it still remains in Ireland, but was lowered in England to 5 per cent. in 1714, at which it now continues. These limitations have always been productive of evil. Money-lenders by profession will always be ready to take advantage of the necessities of borrowers, and being left without competitors among the more conscientious capitalists, demand not only a monopoly price for the use of their money, but also a further sum proportioned to the risk and penalties attend-joint-stock association. ing discovery. The Lombard merchants were accustomed to demand 20 per cent. interest, and even more, according to the urgency of the borrower's wants.

The business of a bank may be classed under the following heads:-1. Discounting bills of exchange. 2. Advancing money on cash credits. 3. Receiving deposits at interest. 4. Keeping current accounts for customers. 5. Issu ing notes. 6. Acting as agents for others. Private bankers in London do not make any charge of commission to their cus tomers, and generally grant facilities to them, both by discounting bills and by temporary loans, either with or without

The merchants of London had been used to deposit their money for security at the Mint in the Tower of London, whence they drew it out as occasion demanded; but in the year 1640 King Charles I. took possession of 200,000l. thus lodged, which of course put a stop to that practice. This state of things preceded and most probably led to the ex-security. Even where this kind of actension of the business of the goldsmiths, as just explained.

This business soon became very considerable, and was found convenient to the government. In 1672 King Charles II., who then owed 1,328,5261. to the bankers, borrowed at 8 per cent., shut up the Exchequer and for a time refused to pay either principal or interest, thus causing great distress among all classes of people. Yielding to the clamour raised against this dishonesty, the king at length consented to pay 6 per cent. interest, but the principal sum was not discharged until forty years afterwards.

The number of private banks in London about 1793 was fifty-six, of which only twenty-four are now in existence.

commodation is not required, it is almost a matter of necessity for every merchant of trader carrying on considerable busines to have an account with a banker, through whom he makes his payments, and who will take from him the daily trouble of presenting bills and cheques for payment

At various times some banking estblishments in London have adopted the principle of allowing interest upon deposits placed in their hands. The practice of most of the joint-stock banks is to allow a moderate interest, depending on the market-value of money, for any sum exceeding 100%., provided that it is not withdrawn by the depositor in less than three months. Some of these banks receive deposits as low as 10.; and

others allow a higher rate of interest | of the arrangements of the Clearingon small than on larger sums. It is house has recently been published by Mr. expressly stipulated by bankers in these Tate (The System of the London Bankcases that the rate of interest on the sum ers' Clearances explained and exemplideposited will be liable to fluctuation ac-fied'), to which we must refer those who cording to the state of the money-market. desire something more than a general The joint-stock banks also allow interest idea of the system. The Clearing-house at the rate of one or two per cent. on the is fitted up with desks for each of the smallest balance on current accounts, if present twenty-seven clearing-bankers, the balance has stood for a month; and whose names, taking the first of each some of them allow interest on the ave- firm, are arranged in alphabetical order rage daily balance for a month. as follows, over each desk:

The profits of London bankers are principally derived from discounting mercantile bills, either for their customers, or, through the intervention of brokers, for other parties. They have great facility as regards the security of this business, from the unreserved confidence which they are accustomed to place in one another as to the credit of their respective customers.

Mr. Tate says, "The rapidity with which the last charges are required to be entered, and the bustle which is created by their swift distribution through the room, are difficult to be conceived. It is, then, on the point of striking four, and on days of heavy business, that the beauty of the alphabetical arrangement of the clearers' desk is to be seen. the distributors are moving the same way round the room, with no further interference than may arise from the more active pressing upon or outstripping the slower of their fellow-assistants. With

All

The great amount of money transactions daily carried on in London, and which has been estimated at nearly five millions, has led to the invention of a simple and ingenious method for economizing the use of money, which is carried into effect at an establishment set on foot by the private bankers in 1770, called the Clearing-house. The present Clearinghouse is situated in the corner of a court at the back of the Guardian Insurance Office, in Lombard Street. The business was previously conducted in an apartment in the banking-house of Messrs. Smith, Payne, and Smiths, and still ear-equal celerity are their last credits entered lier at the banking-house of Messrs. Barnetts and Co., both in Lombard Street. The cheques and bills of exchange, on the authority of which a great part of the money paid and received by bankers is made, are taken from each of the clearingbankers to the Clearing-house several times in the day, and the cheques and bills drawn on one banker are cancelled by those which he holds on others. The joint-stock banks are excluded from this association of private bankers. Some of the private bankers, from the nature of their business, do not require the aid which these clearances afford, and others are too distant to maintain the necessary rapidity of communication with the Clearing-house. An authentic detail

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 balance-sheets, 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."

T