Important as the Bank of England is as the central reserve agency of the English banking system, the fiscal agent of the Government, and the source of note circulation and coin supply, it does a relatively small part of the banking business of the country. The Bank of England does have dealings with individuals and firms, but it is primarily a bankers' bank. The bulk of the mercantile community of England are provided with credit and currency through the joint stock banks, with their numerous branches all over the country as well as in foreign lands, and the private banks. The_extent to which these banks have made possible the use of deposit or check currency makes the credit system of England highly elastic. Checks drawn against banking credit are the chief currency, and practially the only limit to the extent of this credit is the prudence of the banks in making advances to customers on the one hand, and on the other the prudence of the Bank of England in extending credit to the other bankers, practically all of whom are its customers.

In addition to providing the bulk of business concerns with currency and credit, these banks lend largely to the discount houses of London, enabling them to carry on the business of discounting bills of exchange, which is so important a feature of London's financial system.1 They have also gone into the business of accepting bills of exchange for their customers, and of dealing in foreign exchange, a business formerly left to finance houses.