business, and supposing the parties to be of good repute, they can readily convert it by discounting this bill at their bankers or at a bill broker, who, deducting a small amount in the shape of discount, will hand over the balance to the firm, or carry it to the credit of his account. It is this discount that constitutes the profit to the banker, and the rate varies according to the value of money, whether it is plentiful or scarce.

The rate of discount is supposed to be regu- lated by the Bank of England, and the "bank rate," which is arbitrarily fixed by the directors, is moved up and down (sometimes for other reasons than the value of money), and is sup- posed to be the rate of discount for bills of the best description. It is found in practice, however, that when there is an abundance of money seek- ing employment, bills are discounted at lower rates.

The Bank of England make purchases and sales of British or Foreign securities, and divi- dends on stocks will be received and placed to account. Exchequer bills, bonds, railway deben- tures, or any other securities may be deposited, and the interest, when payable, will be received and placed to a customer's account free of charge. Cash boxes (contents unknown), plate chests, and deed and security boxes are also received for customers for safety, free of charge, and all other banking facilities conceded, as are given by the Blankshire Bank.

The other joint-stock banks of London trans- act their business in all respects in the same manner as the Bank of England. In addition they invite money on deposit, allowing interest on the same. Sums of money lodged on deposit, and they may be by persons who are not other- wise customers, are not carried to a customer's account, but, as in the case of the Blankshire Bank, are placed on a special form of receipt which is changed for a new one when the in- terest or any part of the principal is withdrawn. The rate of interest allowed by the Blankshire Bank, and by the country banks generally, is a fixed one, but that of the London banks is regulated by the value of money, and fluctuates from time to time, notice being given by adver- tisement in the London newspapers of any change in the rate. Deposits are received by the London bankers "at call," that is, payment may be required on demand; or at an arranged term of notice of repayment. The rate of in- terest on money at call is less than where notice is required, and the longer the period of notice the higher the rate of interest.

In Scotland there are no private banks, and in Ireland only two. The joint-stock banks are numerous, and their mode of business is practi- cally the same as in England, indeed the English system is founded on that practised by the Scotch many years before the joint-stock bank was general in England.

CHAPTER IV. INVESTMENTS.

GOING back to the parcel of securities which Miss Smith received from her lawyer, we will presume that they represent safe investments of various kinds. It will be prudent, however, to ask her banker to examine them to see if any, in his judgment, might be sold with advantage (either on account of doubtful character or ex- ceptionally high price), and the money invested elsewhere. This business the bank will transact for her; and in the matter of investment, in addition to using her own common sense as to the nature of the securities in which she should place her money, she should seek the advice of her banker, and rely very much upon his opinion.

The undertakings in which the public are in- vited to invest their money are so numerous, and the prospects of success so speciously asserted, in good and bad alike, that it is necessary to be extremely cautious in accepting any state- ments of the kind without rigid examination and proof of their being true and genuine. Other- wise the investment or purchase becomes a speculation, and, more than likely, will only end in disaster.

The term "securities" applies both to the concerns in which investments are made and to the deeds and documents which represent the investments. Thus a mortgage or a mortgage deed is a "security." The Government Funds, stocks and shares in all companies, bonds, foreign and otherwise, Corporation Stocks, &c., are all termed "securities." A convertible se- curity is one which may be sold in the open market, there being no restriction upon the persons who may hold it.

We will now endeavour to put before the reader some account of the various "securities" in which the public invest their money accord- ing to individual choice, and which (with the exception of mortgage on real property-land or houses) may be bought and sold in the stock- market through the agency of a banker or broker. Quotations of the market price of these securities may be found in the Stock Exchange list, which is published daily, and can be seen at most bankers' offices. Many of them are also quoted in the daily newspapers.

MORTGAGES.

To invest money upon mortgage is to lend it to a person who has house or landed property, and desires to borrow money at a certain speci- fied rate of interest. The title deeds of the property are deposited with the lender of the money, together with a mortgage deed, which describes, in full detail, the terms which may have been agreed upon.

The interest is usually made payable half- yearly, and in the event of its payment not being kept up, or the lender desiring the return of his money, the principal sum can be called up, the lender giving six months' notice of his intention to do so. If the borrower fails to pay, a process of law has to be instituted, called a foreclosure suit, which, if successful, transfers the absolute ownership of the property into the hands of the lender, so that he can receive the rents as his own, or, if he pleases, sell the property under legal authority. In view of such a contingency the value of the property should considerably exceed the amount of the money advanced, so as not only to cover the principal sum, but also any arrears of interest, together with law costs and expenses. The usual pro- portion of an advance on mortgage is two-thirds of the ascertained value of the property, but there might be circumstances which would war- rant some variation in the proportion.

The mortgage deed should be prepared by the lender's own solicitor, who would see that the property had a good title and use all the pre- cautions necessary in transactions of this kind to guard against fraud and loss; and in many cases a professional valuation of the property would be desirable, as a preliminary, before the advance is entertained at all.

Cases have been known where fraudulent per- sons have borrowed money on mortgages of property conveyed to themselves, but as to which they were trustees only for others. The lenders or mortgagees have, in such cases, no alternative but to give up the deeds and submit to the loss of their money.

Debentures are a form of mortgage applicable to the raising of money by a corporation or joint-stock company.

The company mortgages its property for a certain sum, too large for a single person to advance, so it is divided up into even amounts of, say, Ł100, the money being secured by de- benture bonds, bearing interest at a fixed rate, and being saleable in the stock markets.

THE FUNDS.

"What are the Funds?" The writer has been asked this question over and over again, though it seems scarcely credible that, in these days, any person of ordinary intelligence should be ignorant of the meaning of the term. Unfor- tunately these things are not usually taught in our schools.

"The Funds,"