1. Banks are useful as places of security for the deposit of money. Not long ago a Western farmer received nearly ten thousand dollars in specie from the Government in payment for bonds. Not regarding a bank as a safe place for depositing his gold, he put it in the bottom of a barrel in his wood-shed, filled it nearly full of ashes, and the remainder with straw; he then made a nest there, filled it with eggs, and put them in the custody of a setting hen. He thought that his sagacity was quite equal to the occasion. After waiting a couple of weeks he concluded, one Sunday, when having nothing else to do, that he would examine his highly original safe in the wood-shed. The old hen was decidedly cross, and did not enjoy his presence. Still she felt better than he did as soon as he had plunged his arm down the side of the barrel and found that some one had kindly relieved him of his gold. Probably he will think more highly of banks as places of deposit in the future.

The need of a safe place of deposit gave rise to the leaving of valuables with the goldsmiths of London. If money is deposited in a bank and lost, even though not negligent it is responsible. Robberies would rapidly multiply if much money were kept in houses. The depositing of it with banks spares many a house from the invasion of robbers.

2. A greater profit is acquired by the owners of money than would be if banks did not exist. The allowannce of interest by "the new-fashioned bankers" has been considered the origin of modern banking. A large amount of money, in the aggregate, would remain idle and unproductive if these institutions did not exist. By offering to pay interest, persons having money are induced to deposit it with banks, and thus increase their gains. 3. Moreover, the payment of interest on deposits is a stimulant to accumulate money. Were there no Savings banks, a large portion of the savings deposited in them would never have been collected and saved. Probably the majority of these depositors have no thought of collecting enough to buy a bond or a few shares of stock. Such a process of saving is too elaborate for them. But when a way is provided for adding to their savings by simply depositing their money in a bank, thousands, nay millions, of persons in our country have availed themselves of the opportunity.

* On this subject Mr. George S. Coe, President of the American Exchange National Bank, delivered an admirable address before the American Bankers' Association, in 1882, answering the question, "What Important Function Do We, as Bankers, Perform?" See Banker's Magazine, vol. 37, p. 170.

4.  An important utility is that banks loan money to persons who wish to borrow it. Loans are made chiefly to persons engaged in manufactures, trade, commerce, and other business pursuits. Money is especially needful to them to conduct their enterprises. Indeed, if they could not obtain it, they could not maintain their place in. the world of business. The credit that some mercantile houses have is worth more to them than the capital they actually possess.

5.  Another utility is that banks save the transmission of money__ from one part of the world to another" Not only is the risk of loss from robbery and other accidents avoided, but the money is kept in more active circulation. Were it actually sent from place to place to effect all the payments that are daily made, a large amount must be locked up in the process of transportation, which otherwise would be more actively employed.

6. There is a saving of time in paying large sums by checks or bills of exchange To count the money would be a long process in making the many heavy payments of our time.

7.  There is less danger of error when checks are used than when money is paid. Of course there are some risks attending the use of checks. But in paying with money there is also the risk of getting counterfeits, light weight, or otherwise defective coin.

8.  Besides, checks constitute a good record of one's expenditure. If an individual deposits all the money he receives with a bank, and draws it out by checks, his checkbook contains the story of his income and expenditure. For persons who do not have strict business habits this mode of keeping their money and paying their bills is especially worth observing.

9.  A bank account is very useful if a payment is disputed. Individuals do not always take receipts for the money they pay, and even if they do, sometimes lose them. If a bill be paid, but no proof can be furnished of paying it and payment be again demanded, too often it must be paid a second time. But if a check for the bill be given this is the best kind of evidence of payment.

10. If one has an account with a bank it is often a good channel for getting useful business information, If one has money to collect or to remit, a banker, when, asked, will state the best way of proceeding. Not infrequently bank officials give valuable advice pertaining to investments and other matters.

II. An eminent English banker,* from whose work on Banking many of the ideas in this chapter have been obtained, has said that "banking also exercises a powerful influence upon the morals of society, ft tends to produce honesty and punctuality in pecuniary engagements. Bankers, for their own interest, always have a regard to the moral character of the party with whom they deal; they inquire whether he be honest or tricky, industrious or idle, prudent or speculative, thrifty or prodigal, and they will more readily make advances to a man of moderate property and good morals than to a man of large property but of inferior reputation. Thus the establishment of a bank in any place immediately advances the pecuniary value of a good moral character. There are numerous instances of persons having risen from obscurity to wealth only by means of their moral character, and the confidence which that character produced in the mind of their banker. It is not merely by way of loan or discount that a banker serves such a person. He also speaks well of him to those persons who may make inquiries respecting him; and the banker's good opinion will be the means of procuring him a higher degree of credit with the parties with whom he trades. These effects are easily perceivable. It is thus that bankers perform the functions of public conservators of the commercial virtues. From motives of private interest they encourage the industrious, the prudent, the punctual, and the honest, while they discountenance the spendthrift and the gambler, the liar and the knave. They hold out inducements to uprightness, which are not disregarded by even the most abandoned. There is many a man who would be deterred from dishonesty by the frown of a banker, though he might care but little for the admonitions of a bishop."