The activities described in the preceding chapter as discount, deposit, and note issue are traditionally called the fundamental functions of commercial banks. "Function" here means the course of action which peculiarly pertains to or is appropriate to the institution. The operations of discount, deposit, and issue have been shown to be reducible to a guaranty of private credit or to a substitution of bank credit for private credit. These operations are not, of course, ends in themselves, but activities toward accomplishing ends. Some recent writers on banking call these immediate activities banking "operations" and their ends, banking "functions." Although in the further analysis of causation these so-called "functions" will be but "operations" to even more remote ends, it may be well to consider the activities so distinguished as functions.

In the other volumes of this book many other banking operations than discount, deposit, and issue will be described. Some of them have become traditionally associated with banks and are peculiarly appropriate to them. Banks could not continue in business unless they performed a wide variety of operations which competition has forced them to assume. These operations are usually incidental to discount, deposit, and issue, and are performed for borrowers or depositors and in consideration of their accounts. Other activities may be undertaken by a bank because it has an organization that can assume and execute the additional duties more economically than specialized organizations could do. Some of these activities may produce no small part of the bank's earnings and therefore seem quite essential; others are purely adventitious and occasion a large net expense, but are undertaken for the indirect benefits that accrue from general publicity.