Bank Note

Not real money, but a substitute for money. A bank's non-interest-bearing promise to pay lawful money to bearer on demand, the transfer from one person to another being accomplished by mere delivery, no indorsement or other formality being required. (See " National Bank Notes.") Paul Leroy-beaulieu defines a " bank note " as a " promise made by a banker to pay a definite sum to bearer at sight."

2 The American Banker.

Many financiers claim that there is no essential difference between a " bank check " and a " bank note " for the reason that the depositor is a voluntary creditor of the bank, but his checks do not obtain wide circulation without indorsement; while a bank note finds circulation as a substitute for money among people who have little or no knowledge of the bank by which it was issued. In both cases, however, the check and note represent money and must both be redeemed upon presentation.

Bank Of Circulation

One which issues bank notes. Also called " bank of issue."

Bank Of Deposit

1 It would seem that any banking institution receiving deposits might properly be called a " bark of deposit," but banking men understand an institution of this class to be not a trust company, savings bank, or any such taking " time deposits," or deposits upon which interest is allowed, but banks which receive deposits subject to check, and upon which no interest is allowed. State and national banks are of this latter class.

Bank Of Discount

One which employs its deposits and other funds largely in discounting (see " Discount ") notes, bills of exchange, etc. National banks are of this kind, but savings banks are not.

Bank Of England Discount Rate

1 Each week the " Bank of England " publishes a statement and makes an announcement as to the minimum rate of discount at which it will handle first-class paper. This may be better understood by reading the preceding subject.

Bank Of England Notes

The promise to pay of the " Bank of England" in the form of "paper money," much the same as our " national bank circulation." The only form of paper money - or bank bills - in general use in Great Britain, as the issues of other banks are of no great volume. The "Bank of England" has a separate department, called the "Issue Department," where the notes are printed and all the machinery of issuing, redeeming, cancellation, etc., is carried on. "Bank of England notes" are secured to the amount of 11,015,100, by a debt due to it from the government. In that particular there is quite a similarity to our national bank notes secured by a deposit of government bonds. It is allowed to issue 7,434,900 against securities, and against all additional notes issued there must be a deposit of coin or bullion. Although gold alone is used, it is legally permissible to use one-fifth silver.