| | | || | | | | | | | " |25| " G.W.R. dividend | 30| 0| 0||July| 1| " Figges . . | 8| 3| 4| | | | | | | || | | | | | | | | | | | | || " | 3| " Jones . . | 5|10| 0| | | | | | | || | | | | | | | | | | | | || " |24| " Self . . | 10| 0| 0| | | | | | | || | | | | | | | | | Total Ł565 14s. 6d.| | | || | | Total Ł357 3s. 4d. | | | | | | | | | | || | | | | | | ————————————————————————————————————————

By the entries in the pass-book it will be per- ceived that Ł565 14s. 6d. has been paid into the bank, as appears on the left-hand page, and that Ł357 3s. 4d. has been drawn out, as appears on the right-hand page. The balance or difference between the two, amounting to Ł208 11s. 2d., remains to the credit of Miss Smith.

In this comfortable state of things we will leave Miss Smith, who can now claim to consult her banker in matters of business.

He will be able to offer her facilities in various ways. He will hold for her, in safe custody, any deeds or securities; and whilst she is absent from home will take charge of her plate or valu- ables, free of all expense. If she is travelling about the country he will arrange so that her cheques on the Blankshire Bank may be cashed at any other bank in the kingdom. If she has occasion for it he will send money on her account to some other person's credit at any bank in the kingdom or the civilised world. If she desires to travel abroad, he will obtain a passport for her and provide her with "circular notes," which may be turned into money at any place she is likely to visit.

He will buy and sell stocks, shares, annuities, &c., for her, and collect dividends, interest, coupons, &c., payable anywhere at home or abroad. He will cheerfully advise her on all matters connected with money, and it will be quite the exception if she does not, in all things, find him a safe and prudent counsellor.

As a rule, no charge is made by a bank for keeping an account, provided the balance, that is, the amount of money they hold for the cus- tomer - technically the credit balance - is not persistently small. If it were always under Ł50 that would be considered small, but if only occa- sionally below that figure, and sometimes above Ł200 for any time, it would generally be exempt from charge. When a charge is made for keeping an account which is not remunerative or free from trouble, it does not amount to much, and is fairly earned.

If an advance of money is required for a tem- porary purpose, the bank will often lend the money by allowing the account to be overdrawn, that is, the balance in the pass-book will appear as due to the bank instead of from the bank for the sum required from time to time. This is sometimes convenient when the advance is only required for a short time as avoiding the necessity for disturbing any investment which otherwise would have to be sold. As a rule, however (though exceptions are made where the customer is absolutely to be depended upon), the bank would desire some security to be deposited. This may take the form of a sufficient portion in value of stocks or shares in which the customer has invested, or sometimes the personal guar- antee of one or two responsible persons is accepted. This is quite regular business, and the interest usually charged is fair and reason- able.

CHAPTER III. LONDON BANKS AND BANKING.

THE private banks now doing business in London are few in number. The tendency of late years has been to transform these banks into "Limited Liability" Companies, or to amal- gamate with companies of this character. It looks as though, in course of time, private banks will altogether cease to exist, the joint-stock banks being better adapted to modern require- ments. The private banks do not invite deposit, and interest on accounts is not allowed. They look to the average balance on each account to compensate for the trouble and expense of keeping it, with a considerable margin for profit. They require that not less than a certain fixed sum shall be the minimum balance of a customer's account, but, of course, the larger the balance the better for the banker.

The balance in some cases may be very large where the bank has a wealthy connection, it being a boast with some rich persons that they have never less than Ł10,000, or even Ł20,000 at their bankers. The money so left in the banker's hands is lent out, or invested in various ways, and all that he receives in the shape of interest, after paying the expenses of his estab- lishment, is clear profit. In short, the Ł500 a year which the customer might obtain if he in- vested the Ł20,000 he leaves at the bank, goes to the banker.

At the head of the joint-stock banks of London is the Bank of England, which, like the private banks, do not take deposits upon which interest is allowed, but rely upon the cash at their dis- posal in their customers' accounts for their profits. In all other respects their mode of transacting business is much the same as that of other joint-stock banks. Accounts may be opened by merchants and traders, and by private individuals of known respectability, and no par- ticular sum is required to be lodged upon open- ing the account. Formerly cheques were not allowed to be drawn for a less sum than Ł10, but now there is no restriction as to the amount. The profits of the bank are chiefly made by dis- counting bills of exchange, which is done to an enormous extent. A bill of exchange is an in- strument by which a party who is owed money by another party, and accords to him the benefit of delay in payment, for a fixed period, draws on him in a form of order to that effect.

For instance, the firm of Bullion & Co. have sold to John Robinson certain goods, which need not be specified, as the principle applies in all cases, whether it be bankers, merchants, or traders, and for all transactions where one party is indebted to another. The form drawn by Bullion & Co. on John Robinson, which requires to be stamped according to the amount, would be as follows:-

————————————————————————————- | Due 1st Nov. | | —————— | | Ł500 London, 29th Aug., 1987. | | | | THREE months after date pay to our order the sum of | | Five Hundred Pounds for value received. | | | | To Mr. John Robinson, Bullion & Co. | | Merchant, | | Liverpool. | | | ————————————————————————————- (Written across: Accepted payable at the Bank of London. J. Robinson. )

The acceptance of the obligation by John Robinson is written across the face of the docu- ment, and he makes it payable, as most bills are for convenience, at a London bank, pre- sumably the London agent of his own bankers at Liverpool. Payment becomes due three months after date, with three days of grace added according to custom. Probably Bullion & Co. would find this Ł500, if in cash, useful in their