upon by the customer. It is, however, the practice of bankers, when funds are lying at their banks which are legally their own money, not to inquire for claimants to the same, but at the same time not to insist on their legal rights under the Statute of Limitations against olaimants who make good their claims. It is generally supposed that the unclaimed balances held by bankers amount to a very large sum, and various suggestions have been made as to the manner in which they should be utilised for the public benefit. No satisfactory scheme, however, has yet been put forward to meet the case.

The obligation to pay on demand throws a serious liability upon the banker, for if the latter fails to honour a draft of the customer when there is a balance lying at the bank in his favour, whether actually or through arrange. ments as to an overdraft, the banker is liable in an action for damages for the injury done to the credit of the customer.

A banker may not disclose the state of a customer's account without justi. fiable cause. What cause is justifiable will depend upon the circumstances of each particular case. But the know. ledge of a banker is not privileged, and he may be compelled to give evidence of his knowledge in a court of law. Also the entries in the books of the bank may be called for, though in order to prevent the inconvenience arising from the actual production of the books, certified copies of the entries may put in evidence, in accordance with the provisions of the Bankers Books Evidence Act, 1879.

be

The duty and authority of a banker to pay cheques drawn upon him by a customer are determined by (a) countermand of payment, (b) notice of the customer's death, and (c) notice of an available act of bankruptcy.

Plate, jewels, and other valuables are often deposited with a banker for safe custody. This is a case of bailment, and the liability of the banker will depend upon the circumstances under which the articles are deposited, and whether the banker is a gratuitous

bailee or a bailee for hire. The articles deposited must be returned to the depositor, and if by any chance the banker delivers the articles placed with him for safe custody to an unauthorised person, he may be liable in an action for damages for conversion. The true extent of the banker's liability has never been accu rately determined. Since it is a well

known fact that a banker is a person who has the goods of others in his possession, these goods will not fall within the "order and disposition clause of the Bankruptcy Act, in case the banker becomes bankrupt. They must be returned to the depositor.

If 8 banker misappropriates any deposits of a customer, he may be indicted for larceny.

Bankers' Lien.-Lien, which is the right to retain possession of a thing until a claim is satisfied, extends to bankers by the Law Merchant. There. fore a banker has a right to retain all securities deposited in his hands by a customer for his general balance, unless there is a special contract to the contrary. He may also go further, and realise the securities in order to pay himself out of the proceeds, in the same manner as a pawnee.

Bank Manager.-The bank manager is the general agent of the bank, and the bank is responsible for every act done by the manager within the scope of his authority, even for a fraud which is committed in the course of business.

V.

64

This is so important a point, that the judgment in the leading case of Barwick English Joint Stock Bank, 1887, L.R. 2 Ex. 259, where an action was successfully brought against a bank for damages caused by certain false representations made by the manager to the plaintiff, is worth quoting: “ With respect to the question whether a principal is answerable for the act of his agent in the course of his master's business and for his master's benefit, no sensible distinction can be drawn between the case of fraud and the case of any other wrong. The general rule is that the master is answerable for every such wrong of the servant or agent as is committed in the course of the service and for the master's benefit, though no express command or privity of the master be proved. That principle is acted upon every day in running-down cases. It has been applied also to direct trespass to goods, as in the case of holding the owners of ships liable for the act of masters abroad improperly selling the cargo. It has been held applicable to actions of false imprisonment, in cases where officers of railway companies, entrusted with the execution of by-laws relating to imprisonment and intending to act in the course of their duty, improperly imprison persons who are supposed to come within the terms of the by-laws. It has been acted upon where persons employed by the

owners of boats to navigate them and to take fares have committed an infringement of a ferry, or such like wrong. In all these cases, it may be said, as it was here, that the master has not authorised the act. It is true he has not authorised the particular act, but he has put the agent in his place to do that class of acts, and he must be answerable for the manner in which the agent has conducted himself in doing the business which it was the act of his master to place him in."

BANK BILL. (Fr. Billet de banque, Ger. Bankzettel, Sp. Billete de banco, It. Biglietto bancario.)

This is a bill of exchange issued or accepted by a bank.

BANK CHARTER.

(Fr. Privilège de la banque, Ger. Bankprivilegium, Sp. Privilegio de banco, It. Privilegio della banca.)

This is the name given to the special charter of incorporation under which the Bank of England enjoys its peculiar privileges.

BANK HOLIDAYS. (Fr. Fêtes légales, Ger. Bankfeiertage, Sp. Fiestas anuales, It. Feste legali, vacanze bancarie.)

By an Act of Parliament passed in 1871, certain days were appointed as holidays. In England and Ireland they are Easter Monday, the Monday in Whitsun week, the first Monday in August, the 26th December (or, alternatively, the 27th December, if the 26th falls on a Sunday), and any other day appointed as such by royal proclamation. In Scotland, the following days are statutory bank holidays: New Year's Day, Christmas Day (or, if either of these falls on a Sunday, the next following Monday), Good Friday, the first Monday in May, and the first Monday in August. Days appointed by royal proclamation as bank holidays apply to Scotland as well as to England and to Northern Ireland.

BANK, JOINT-STOCK. (Fr. Bunque anonyme, banque par actions, Ger. Aktienbank, Sp. Banco por acciones, It. Banca per azioni.)

A bank in which the capital is subscribed by the shareholders as distinguished from a private bank, in which the capital is provided by the sole proprietor or by the partners.

Every bank which originally consisted of more than six members was called a joint-stock bank, and was founded on the principle of unlimited liability. The oldest of this class are the London and

Westminster, founded in 1834, the London Joint-Stock, 1836, the Union, 1839, and the London and County, also 1839. But owing to the restrictions of the Companies Act, 1862, which prohibited the establishment of any banking company, unless registered under the Act, or formed in pursuance of some special Act or of letters patent, consisting of more than ten persons, and the provisions of the Companies Act, 1879, the majority of joint-stock banks have now become registered, and the principle of limited liability applies to them as to joint-stock companies, and the Companies (Consolidation) Act, 1908, is the statutory enactment which governs them.

The limitation of liability of a regis. tered joint-stock bank does not extend to the note issue in the case of banks of issue.

BANK MANAGER. (See Bank.) BANK NOTES. (Fr. Billets de banque, Ger. Banknoten, Sp. Billetes banco, It. Biglietti di banca.)

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Bank notes are promissory notes issued by a bank, payable to bearer on demand. They differ from ordinary promissory notes in various respects, the chief being that they may be reissued after payment. But this is not the practice of the Bank of England. Their notes are never reissued, but after payment in are cancelled, kept in safe custody for five years, and then de. stroyed.

By the Bank Act, 1892, if a Bank of England note has not been presented for payment within forty years of its issue, the Bank is empowered to write off the amount under certain conditions mentioned in the Act.

The privilege of issuing bank notes is now reserved to the Bank of England. Bank of England notes are not subject to stamp duty.

No notes may be issued for a less sum than five pounds in England. (The issue of £1 and 10s. Treasury notes in 1914 was occasioned by the outbreak of the Great European War, and sanctioned by a special Act of Parliament. These have become a permanent part of our currency, and now, owing to the increased price of silver, five-shilling notes have been suggested.) In Scotland and Ireland, notes may be issued, by banks of issue, for any number of pounds, from one upwards.

Bank of England notes are legal tender in England for sums above £5, except at

the Bank itself or at one of its branches. They are not legal tender in Scotland or Ireland, although they circulate with the utmost freedom. Country notes are not legal tender, and a country banker is not bound to accept his own notes. even in payment to himself. Of course, if he refused to pay them when presented. he could be sued for their amount.

The

Since bank notes are negotiable instruments, the finder of a lost note is entitled to retain it against the whole world, except the rightful owner, and any one who takes such a note from the finder bona fide and for value can retain it even against the lawful owner. same thing applies to a note which has been stolen and afterwards negotiated, provided the holder has taken it in good faith and given value for it. There is not much efficacy in the so-called 'stopping the payment " of bank notes. If notice is given to a bank that notes have been lost or stolen, it may be possible to trace the channels through which they have passed since they were last in the possession of the rightful owner, but a bona fide holder is in no way prejudiced or liable to restore them.

Bank notes are often cut into halves and remitted by post under different covers. The halves must be pasted together before being presented for payment. This mutilation does not affect the negotiability of the notes, whereas a banker would refuse payment of a cheque or a bill which had been cut or torn and then pasted together again.

BANK OF DEPOSIT. (Fr. Banque de dépôt et consignation, Ger. Depositenbank, Sp. Banco de depósito, It. Banca di deposito.)

A bank of deposit receives money, at an agreed rate of interest, on condition that a certain prescribed notice shall be given previous to withdrawal of the same. By this plan, the necessity of keeping a large sum on hand, earning no interest, is avoided; there is no necessity to prepare for a sudden emergency; and the capital can be invested in securities paying a higher rate of interest than is given by the public funds or other securities which can be immediately

realised.

BANK OF ENGLAND. (Fr. Banque d'Angleterre, Ger. Bank von England, Sp. Banco de Inglaterra, It. Banca d' Inghilterra.)

The Bank of England, which is the largest and most important banking

establishment in the world, was suggested by William Paterson, a Scotsman, and it received its charter of incorporation in the year 1694. It was constituted as a joint-stock company with a capital of £1,200,000, that sum being lent at interest to the Government of the day.

According to its charter, the manage. ment of the Bank of England is com. mitted to a governor, deputy governor, and twenty-four directors, elected by the stockholders. At first the charter of the bank was for eleven years only; but in consequence of the great services it has rendered to the Government at various times, its charter has been renewed again and again, the last time being under the Bank Charter Act, 1844. The original capital of £1,200,000 was gradually augmented until, in the year 1816, it reached the sum of £14,553,000, upon which the stock. holders draw dividends, and at this sum it still remains. The profits of the bank arise out of traffic in bullion, discounting bills, interest on loans, allowances for managing the public debt, and so on.

The bank has, besides, at different times, paid other dividends, under the name of bonuses. A bonus is a sum of money derived from the division of a fund which has been allowed to accumulate or to remain for use in case of emergency. The emergency having passed, the fund has been divided, and such bonuses of the Bank of England have varied from five to ten per cent.

The Bank of England differs from any other bank in this country, inasmuch as it is the banking house of the Government. All the money drawn in the form of taxes or otherwise for the public service is consigned to the bank, while all drafts for the public service are likewise made on it.

A special advantage conferred on the Bank of England is the privilege of being the only bank in England and Wales which may issue notes payable to bearer on demand, its notes being a legal tender by any one except itself for sums of upwards of £5.

BANK OF ISSUE. (Fr. Banque de circulation, Ger. Notenbank, Sp. Banco de emisión, It. Banca di emissione.)

A bank of issue was one which issued its own notes payable to bearer on demand. The Bank of England has a monopoly in the issue of notes. Formerly the monopoly was shared beyond three iniles and within sixty-five miles of the City of London with banks established before

1844. After the sixty-five mile limit, the monopoly was shared with all banks established before 1844, which have not since lost their privileges.

Shareholders in a bank of issue were liable for the amount of notes outstand. ing, in case of the insolvency of the bank, although the bank itself may have been registered with limited liability under the Companies Acts.

BANK POST BILLS. (Fr. Mandats de Banque, Ger. Bankanweisungen, Sp. Giros al portador, It. Vaglia bancari a termine.)

These are bills which can be obtained at the Bank of England and any of its branches, free of charge for any sum of money, between £10 and £1,000, payable to order, upon depositing the sum for which the bill is required. Such bills are payable seven days or sixty days after sight, and are not subject to days of grace.

The following is the form of such a bill

"BANK OF ENGLAND POST BILL. No

London, January 1, 19. . At seven days' sight I promise to pay this my Sole Bill of Exchange to Samuel Johnson, or order, one hundred pounds sterling, value received of Thomas Robinson.

For the Governor and Company of the Bank of England, £One Hundred. A.-- B.-." The seven days' interest for the use of the money is accepted by the Bank ae sufficient remuneration for their part in the transaction.

These bills originated in 1738 in conse. quence of the frequent robberies of the mail, the object being that in case the mail was robbed the owner of the bill might have time to give notice of the robbery, and prevent payment being made to an unauthorised person.

BANK, PRIVATE. (Fr. Banque privée, Ger. Privatbank, Sp. Banco privado, It. Banca privata.)

A private bank is one carried on by an individual, or by a number of persons not exceeding ten in number. When the bank is carried on by more than one person, it is simply an ordinary partnership. The law of partnership applies in case of insolvency, and each partner is liable to the creditors of the bank to the full extent of his property. Owing to the large amount of capital required for banking purposes, no private bank has been established for many years,

BANK RATE. (Fr. Agio de banque, Ger. Bankdiskont, Sp. Tipo bancario, It. Aggio bancario, tasso della banca.)

The bank rate is the price at which the Bank of England expresses its willingness to grant loans, or to discount bills of exchange. The rate is fixed at the weekly meeting of the directors of the Bank, held each Thursday.

Periodical financial conditions of the money market will cause the rate to vary from time to time, but the main reason for the variation is the supply of, and demand for, gold. Gold will always tend to go in the direction where it can be most profitably employed, and it is of the utmost importance for the Bank to take care that its reserve stock of gold and bullion is not too far reduced, seeing that it is upon that reserve that our whole commercial system practically depends.

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BANK RETURN. (Fr. État de banque, Ger. Bankausweis, Sp. Estado banco, It. Bollettino della banca.)

This is the weekly report issued by the Bank of England, every Thursday afternoon, showing the financial condition of the Bank. The form and the details of the report are prescribed by the Bank Charter Act of 1844. In the return are shown the amount of notes in circulation, the stock and bullion in reserve, and such other matters as enable city men to judge of the state of the money market and of its probable tendency.

The following is a copy of one of the weekly returns of the Bank of England

£

146,244,310

11,015,100

8,734,900 126,494,310

£146,244,310

Banking Department

£

14,553,000

3,555,382

Public deposits

15,635,288

109,974,439

Seven-day and other bills

14,031

£143,732,140

Other deposits

The first item mentioned in the return, notes issued, means the amount of Bank of England notes circulating in the country, or held in reserve by different banks.

The Government debt is the amount owing to the Bank of England by the Government. It was originally £1,200,000, the first capital of the bank, when it was established in 1694. has stood at its present total, £11,015,100, since 1816.

It

"Other securities" are the interest bearing investments, selected by the directors. These vary in value from time to time.

The gold coin and bullion item suffi. ciently explains itself.

In the banking department the proprietors' capital is the same as what is known as the share capital in joint. stock banks. It has remained invariable since 1816.

The "rest" is the reserve kept by the bank for the payment of dividends to the proprietors. It is always maintained at a total exceeding three millions, and the excess over that sum is the amount paid half-yearly in dividends.

Under the head of public deposits are included the moneys paid in on account of the Exchequer, the Savings Banks, the Commissioners of the National Debt, the Paymaster-General, etc. The Bank of England being the banking house of the nation, all national revenues paid in by the various collectors as soon as they are received.

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The item "other deposits" includes all other sums paid into the bank by various Government offices, the deposits of different banks, and the ordinary banking accounts of individuals.

Seven-day and other bills are known as bank post bills. They represent the money paid into the bank for bills which have been issued.

"Government securities" consist of consols, exchequer bills, treasury bonds and other securities for the due pay. ment of which the Government responsible. The taxes are a pledge for the fulfilment of the obligation created.

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"Other securities" are the investments, etc., made at the discretion of the directors.

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The notes are those Bank of England notes which obtained from the Issue Department, and for which gold coin and bullion are exchanged.

BANK STOCK. (Fr. Actions de banque, Ger. Bankaktien, Sp. Acciones de banco, It. Azioni bancarie.)

This is the capital of the banking department of the Bank of England. When the bank was established in 1694, the amount of its capital was £1,200,000, but it has gradually increased, and since 1816 it has stood at the sum of £14,553,000. Any amount of bank stock may be purchased, provided it does not involve the fraction of a penny.

BANKER. (Fr. Banquier, Ger. Bankier, Sp. Banquero, It. Banchiere.) A banker is a person employed in the business of banking.

The general duties of a banker, his mode of transacting business, and his relationship to the customers of the bank are given under Bank.

For the consideration and discussion of matters of interest to bankers, and for the purpose of affording oppor. tunities for the acquisition of a knowledge of the theory of banking, the Institute of Bankers was founded in 1879. Papers on banking and financial subjects generally are read from time to time, and discussions take place before the Institute, whose official pub. lication is the Journal of the Institute of Bankers. There is an annual examination for the certificate of the Institute, which attracts a large number of candidates. The offices are situated at 5 Bishopsgate, London, E.C.2.

BANKERS' BOOKS EVIDENCE ACT, 1879. (See Pass Book.)

BANKERS' CHEQUES. (Fr. Chèques, Ger. Bankierschecks, Sp. Talones bancarios, It. Tratte dei banchieri.)

These are cheques issued by one banker upon another, as an easy means for the transmission of money.

BANKERS' CLEARING (See Clearing House.)

HOUSE.