Bank, in trade and business, a place of deposit for money.- In nearly all languages the words for bank and banker are derived from those meaning table, bench, or counter:Bank 0200143 among the Greeks, mensarius among the Romans, and hanchiero among the Italians of the middle ages. The banker was originally a changer, and he stood in the market place and furnished such different kinds of money as were demanded. By degrees he took funds on deposit, made advances upon securities, merchandise, pledges, titles to property, family papers, etc, and became finally what we now know as a banker. The lending of money with the taking of interest for its use is a custom which dates from the earliest antiquity of which there are records. Constant reference is made to it in both the Old and the New Testament. In ancient Greece the business of receiving money on deposit and lending it out was an important one, and the money changer stood high in credit and in the confidence of both the government and the people of Athens. The state bank of New Ilium, of the precise nature of which we are not informed, in the second century before Christ, borrowed money for the state, and paid for its use 10 per cent. - Banks are designed to afford safe places of deposit for the money of individuals, corporations, or governments; for facilitating the exchange of money from the hands of parties who have payments to make to those of such persons as are to receive them, thus becoming clearing houses for the com-munities in the midst of which they are situated; and for extending aid to business by granting loans or discounts on notes, bonds, stocks, or other securities.

These institutions are of three kinds, and may be classed as follows: Banks of deposit receive on deposit the money of individuals, corporations, or governments, and hold it subject to the draft of its owner or owners, or under such other agreement as may be entered into. Banks of discount furnish loans upon drafts, promissory notes, bonds, or other securities. Banks of circulation payout their own notes, which may or may not, according to circumstances, be payable in coin on demand. Banks which exercise the last of these functions generally unite the first and second. - The bank of Venice, the first establishment of the kind jin Europe, was founded in 1171, and owed its existence to wars and the necessity for the government obtaining the means for con-ducting them. Having exhausted every other resource, the state was obliged to resort to a forced loan from its most opulent citizens. Then was organized the chamber of loans, which by degrees assumed the form under which, as the bank of Venice, "it was for many ages the admiration of Europe, the chief instrument of Venetian finance, and the chief facility of a commerce not surpassed by that of any European nation." Funds once deposited in the bank could not be withdrawn, but were transferable at the pleasure of their owners upon its books.

So thoroughly did the bank credits become the means through and by which the financial operations of the people were conducted, that during its entire existence, with but slight exceptions, these credits were at a premium over coins, which latter were clipped and worn, as "well as of various countries and uncertain values. That the people were well satisfied with this institution and its workings may be inferred from the fact that "no book, speech, nor pamphlet have we found,'1 says an eminent economical writer, "in which any merchant or dweller in. Venice ever put forth any condemnation of its theory or its practice." The bank of Venice continued in existence without interruption until the overthrow of the republic in 1797, by the revolutionary army of France. - The bank of Genoa was projected in the year 1345, but did not go into full operation till 1407. It was for centuries one of the principal institutions of its class in Europe. Within a space of less than 60 years - first in 1746, and again in 1800 - it was twice pillaged by a foreign foe, in the latter instance by the French army under Mas-sena. From the effects of this disaster it has never recovered, and it has ceased to perform the functions of a bank. - The bank of Barcelona was established in the year 1401, that city having been during the middle ages one of the most enterprising and flourishing of the trading cities of Europe. Here it was that the system of negotiation of bills of exchange was first instituted. - The bank of Amsterdam was founded in the year 1609, Holland being then possessed of an important foreign trade.

It was a bank of deposit only, and the money in its possession was transferred on the books of the institution at the pleasure of its owner or owners. The primary object of the establishment of the bank was to give a standard or certain value to bills which might be drawn upon Amsterdam - rendered necessary by the depreciation of the coins, owing to their having been worn or clipped. Here these coins were received on deposit, and had their value established by weight and fineness. It was not the design on founding the institution that the funds should at any time be lent out, but should remain in its vaults. However, the directors having lent to the governments of Holland and Friesland and to the East India company 10,500,000 florins, the fact became known on the invasion of the French army in 1794, and produced the ruin of the institution. The amount of treasure in the vaults of the bank in 1778 was estimated by Mr. Hope at 33,000,000 florins. - The bank of Hamburg was established in the year 1019. This institution is a bank of deposit and circulation, which circulation is based upon tine silver in bars. The stock of the bank arises out of the deposits, which are confined solely to silver. The bank of Hani-burg differs essentially from any other banking institution in the world.

The difference at which it receives and pays out the silver deposits, about one half of 1 per cent., constitutes the charge of the bank for custody of the funds intrusted to it. Although in some respects it has undergone changes in its management since it was instituted, still the plan is essentially the same as it was in 1710. It has been felt, as well by the mercantile community of Hamburg as by those directly interested in the bank, that changes are necessary to conform to the present state of business. It is deemed desirable that the bank should be enabled to make better use of its surplus capital, which owing to restrictions is almost valueless. Its deposits, Oct. 10,1872, were 30,766,666 thalers. The bank of Rotterdam was established in 1635; the bank of Stockholm in 1688. - British Banks. The bank of England was established in 1694, William and Mary then being on the throne. To the war with France, and the extreme difficulty experienced by the government in raising funds for conducting that war, is the institution of this monopoly due.

The idea originated with William Paterson, a merchant of London, who readily saw that the government, which had been paying interest at the rate of from 20 to 40 per cent, per annum, would without much hesitation grant exclusive and almost unlimited privileges to such parties as would in turn furnish it with a fixed and permanent loan, at a reasonable rate of interest. The plan, being brought to the attention of the king, was submitted to the privy council, when the details were completed, and it was laid before parliament. There, however, it met with the violent opposition of a formidable party. Nevertheless, the bill was carried by the government, and on April 25, 1694, became a law. It was provided that the capital, .£1,200,000, should be permanently lent to the government at 8 per cent, per annum, and that in addition to the interest an allowance of £4,000 per annum should be made by the government for the management of the debt. So popular was the scheme, and so great was the desire of the public to become proprietors of the bank, that within ten days after the books were opened the entire capital was subscribed.

The corporate title under which this institution comiueiieed operations, and has continued to the present day, is "The Governor and Company of the Bank of England." The bank was opened for business on Jan. 1, 1605, the stockholders having previously elected a governor, a deputy governor, and a board of 24 directors. Those several parties were required by law to hold stock as follows: governor £4,000, deputy governor £3,000, and director £2,000. The charter was granted for eleven years, and the officers were required to be elected annually between March 25 and April 25, after the year 1696. The bank immediately issued notes, none of which were, however, of a smaller denomination than £20 sterling, and commenced discounting bills of exchange at rates varying from 3 to 6 per cent., distinction being made in favor of persons who used the bank as a place of deposit. Within two years the institution experienced considerable trouble, under the influence of which its notes fell as low as 20 per cent, below par. Although notes to the amount of £480,000 were redeemed, it was found necessary in 1697 to increase the capital £1,000,000 sterling.

This increase had the effect within a few months of causing the stock not only to recover a discount of from 40 to 50 per cent., but to sell at a premium of 12 per cent. Since first this institution was founded, its capital and the loan to the government have been nearly identical in amount. In 1833, however, the debt to the bank was reduced about £3,500,000. The following table gives the capital of the bank at various periods, and also the dates of the several renewals of the charter, with the amount of government debt at each period:

Dates.

Capital.

1694..............

£1,200,000

1697..............

2.201.171

1708..............

4,402,843

1709..............

5.058.547

1710..............

5559.996

1722..............

8.959.996

1742..............

9,800.000

1746..............

10,780,000

1782.............

11.642.400

1816..............

14,553,000

Dates of renewal.

Government debt.

1694..............

£1.200 000

1697..............

1.200.000

1708..............

3.375.027

1713..............

3,375,027

1742..............

10,700,000

1764..............

11,686,800

1781..............

11,686,800

1800..............

11,686,800

1883..............

11.015,100

1844..............

11,015,100

The management of the entire public debt of Great Britain is placed in the hands of the bank of England, for which service it has received compensation, which has from time to time varied in amount according to circumstances. During the year 1845 this compensation was £93,111 19s. 10d. In addition to the permanent debt of the government to the bank, the latter contracted with the former on March 20, 1823, to pay at stated intervals between 1823 and 1828 certain pensions and annuities arising out of the then recent wars, amounting to £13, 089,419. This is termed the "dead weight." In consideration of this the bank was to receive from the government an annuity of £585,740 for 44 years. On Feb. 26, 1797, an order was issued by the privy council to the bank restraining it from the further payment of specie. On the following day the officers of the bank issued a notice, in which they stated that in consequence of the foregoing order they "think it is their duty to inform the proprietors of the bank stock as well as the public at large, that the general concerns of the bank are in the most affluent and flourishing situation, and such as to preclude every doubt as to the security of its notes." At the same time they announced their determination to continue their usual discounts.

The fact was, the order in council simply prohibited the bank from doing that which it was entirely out of the question for it to do. On Feb. 27, the same day on which the bank suspended specie payments, parliament approved the order in council. Notes of the denomination of £1 sterling were immediately prepared and issued, and all fractional parts of a pound were refused payment by the bank. This suspension, while it was absolutely necessary to prevent the ruin of the bank, was of equal importance to every business interest throughout the kingdom. The governmant, while it interposed for these important ends, was equally interested in the welfare of the institution with which it was so intimately connected in all its financial concerns. It was then struggling through its tremendous efforts against the power of France and Napoleon, and the bank was to it what the heart is to the animal organism, its circulating notes what the blood is to that organism - the very source of vitality and power. Although every assurance was given that this measure was intended to be merely temporary, it was continued from time to time until May 1, 1823, when the resumption of specie payments took place, for which preparation had gradually been made within the previous four years.

This was not, however, accomplished without widespread disaster, the details of which are painful to read even at this distant day. This was the case, too, with gold at the following rates of premium in the under-mentioned years: 1816, 2 1/2-per cent.; 1810, October to December, under 1 per cent.; 1817, 2 1/2; 1818, 5; 1819, 6 1/3; 1820 and 1821, par. On the renewal of the charter in 1844, Sir Robert Peel, then prime minister, having become satisfied of the dangerous influence exerted in its ever varying and never stable system, first of expansion and then of contraction, in its loans, thought to provide a remedy. The principal feature of this measure was to limit the circulation so that it would be regulated by the amount of coin and bullion in the vaults of the institution. Accordingly, he brought in a bill which became a law on July 19, 1844, entitled "An act to regulate the issue of bank notes, and for giving to the governor and company of the bank of England certain privileges for a limited period." The following abstract of parts of that law will give an idea of such provisions as refer to the bank of England: § 1. Provides for "the issue department of the bank of England," which shall provide the notes payable on demand, and shall, from Aug. 31, 1844, be kept wholly separate and distinct. § 2. That on Aug. 31, 1844, the bank shall transfer to the issue department securities to the value of 14 millions, the debt due by the public to be deemed part; that the banking department shall transfer to the issue department all the gold coin and gold and silver bullion not required; that the issue department shall deliver to the banking department such an amount of notes as with those in circulation shall equal the securities, coin, and bullion transferred to the issue department; that the bank may not increase, but may diminish the amount, and again increase it to any sum not exceeding 14 millions. § 3. That the bank shall not retain in its issue department at one time silver to any amount greater than one fourth the gold held at the same time. § 4. That notes may be demanded for gold bullion at the rate of £3 17s. 9d. per oz. of standard gold. § 6. Provides for a weekly statement of the affairs of the bank. § 7. That the bank shall be exempt from stamp duty on its notes. § 8. That the bank allow £180,000 per annum out of the amounts payable by government for the exclusive privileges of banking. § 9. That the public shall receive such profit as may be obtained by an increase of circulation beyond the amount provided by section 2. § 10. That no other banks of issue be allowed but such as were in existence May 6, 1844. § 11. That no banker in England or Wales shall issue any bill of exchange or promissory note payable on demand, excepting such bankers as were in existence May 6, 1844. That no company now consisting of six or less than six partners shall, if they exceed that number, be allowed to issue notes.

The important provisions of this act were that the bank might issue £11,000,-000, for which the public debt due the bank should be security, and £3,000,000 on exchequer bills and such other government securities as it might hold, but that for every pound sterling issued beyond the £14,000,000 the bank should hold an equal amount in gold and silver. An examination of the operations of the bank will, we think, demonstrate the fact that Sir Robert Peel entirely misapprehended the causes at work in producing the fluctuations complained of, and that he applied the restrictions to that particular branch which varied but little in a series of years. The real cause of trouble was to be found in the loans, which have been irregular in the extreme and at times productive of great injury. This injury has not alone been confined to Great Britain, but has extended in a greater or less degree to every country with which intimate business relations existed. That this act has had no effect in mitigating this crying evil, will be clearly seen in the fact that these fluctuations have never been more violent than since its passage. The British public had long shown entire confidence in the circulating medium, and no legislation to effect this object was necessary.

Within the 28 years which have elapsed since its passage, the operation of this law has three times been suspended, as doubtless it will be again whenever it is rendered necessary so to do. The first of these was on Oct. 25, 1847, the second on Nov. 12, 1857, and the third on May 11, 1866, on which latter day the bank raised the rate of discount to 10 per cent, it having been 6 per cent, nine days before. In its efforts to save itself and comply with the absurd provisions of the bank act, it spread ruin and desolation around it, and years have been necessary to enable the country to recover from the effects of the panic thus created. While the notes of the bank are legal tender elsewhere, they are not such in payments by the bank itself. Its condition on Oct. 16, 1872, was as follows:

Issue Department

Notes issued......

£34,328,780

£34,328,780

Government debt......

£11,015.100

Other securities.....

3.984.900

Gold coin and bullion.....

19.328,780

£34,328,780

Banking Department

Proprietors' capital....

£14.553.000

Rest....

3,145,478

Public deposits, including exchequer, savings banks, commissioners of national debt, and dividend accounts.....

5,510,196

Other deposits.....

19,465,772

Seven-day and other bills...

463,352

£43,137,798

Government securities.....

£13.256,546

Other securities......

21.330,271

Notes......

7,889,125

Gold and silver coin.....

661,856

£43,137,798

Prior to the establishment of the bank of England, banking in London was conducted first by the Jews, who were succeeded by the Lombards, who were in turn supplanted by the goldsmiths. The latter lent money at rates much below those charged by their predecessors, and they issued promissory notes payable on demand, or at a certain period after date. These bankers deposited their funds at the royal mint in the tower of London. This practice was discontinued when Charles I., being in want of money, seized the amount thus deposited, £200,000, by which means the bankers were utterly ruined. During the civil war the business of the goldsmiths largely increased, and during the commonwealth, as well as subsequently, various plans were devised by different individuals for the establishment of public banks. No action was, however, taken to mature and carry out these plans until the establishment of the bank of England. After the seizure of the funds by Charles I., it was the practice of the goldsmiths to deposit their surplus means in the exchequer, which funds were drawn once a week, to meet such demands as might be made upon their owners.

Charles II. in 1672, being in want of money, closed the exchequer, and seized the funds belonging to the goldsmiths, amounting to £1,328,5(52, on which there accrued 25 years' interest, making thereby a sum total of £3,321,-313. No consideration was given for any part of this large sum, except £064,203, for which government loan was issued, forming the basis of the present national debt of Great Britain. As may readily be imagined, the goldsmiths were ruined irretrievably by this infamous proceeding. - The earliest country bank established in England, of which there exists any record, was at Newcastle-on-Tyne, in 1755. This was a bank of issue. From that period the number of these institutions increased. On the renewal of the charter of the bank of England in 1708, the bank obtained the privilege of banking to the exclusion of all copartnerships of more than six persons. In consequence of this law, the various joint-stock banks in existence at the time were compelled to wind up their affairs. In 1825, however, an act was passed allowing copartnerships of more than six persons to carry on business in England as bankers 05 miles from London, with the provision that each stockholder should be liable for the entire debts of the bank.

Notwithstanding the provisions of this law, which would seem to prevent any joint-stock bank being established within 05 miles of London, in 1834 the London and Westminster bank was founded, and has been in operation ever since, although not without having troubles to encounter. Litigation with the bank of England, and other difficulties, at first beset it, but through all of these it passed, and has met with high success. Since the establishment this institution, various others of the kind have been founded in and about London. By the issue act of 1844, no bank in any part of the United Kingdom which did not on May 0, 1844, issue notes, was allowed thereafter to exercise that privilege. By an act passed during the same year, with reference to joint-stock banks in England, so many restrictive clauses were introduced as practically to prevent any new institutions of the kind from being established. Within a recent period, however, the passage of a new act more liberal in its provisions has recognized limited liability, and under it 30 institutions are in operation throughout the United Kingdom at the present time (December, 1872). Perhaps nowhere in the world does the history of banking show greater instability than in England, where during this century joint-stock banks have failed by scores.

Their profits have in many instances been very large, but their risks being correspondingly great, their failures have been most disastrous. - Greater freedom has always existed in Scotch banking than in that of England, and consequently there has been greater security - those institutions, unlike the great monopoly, trading upon their own capital. The earliest bank established was the bank of Scotland, founded in 1695; followed in 1727 by the royal bank of Scotland, in 1746 by the British Linen company, in 1810 by the Commercial bank, and in 1825 by the National bank. In addition to these, joint-stock banks with limited liability have been allowed freely to be established.

These banks have passed readily through commercial crises which have destroyed large numbers of such institutions in England. - Various attempts to establish a public bank in Ireland were from time to time made, and, meeting with opposition in the Irish parliament, were defeated. It was not till 1782 that a bill was passed incorporating the "Governor and Company of the Bank of Ireland," which institution commenced business in Dublin, June 1, 1783, and is still in successful operation. This was succeeded by the Belfast bank in 1808, the Hibernian bank of Ireland in 1825, the Provincial bank of Ireland in 1834, the National bank, and others, all of which are joint-stock banks. - The notes in circulation in the United Kingdom, other than those of the bank of England, in September, 1872, were as follows: England, £5,057,910; Scotland, £5,313,560; Ireland, £7,242,081; total, £17,613,551. - The Bank of France. In 1716 a bank was founded in Paris under this name, which was two years subsequently changed to the Royal bank. Under this organization it remained till 1803, when, having been unsuccessful, it was placed upon its present organization as the bank of France, with a capital of 45,000,000 fr., which was in 1806 increased to 90,000,000 fr.

At present the capital is 182,500,000 fr., and the charter of the bank extends to Dec. 31, 1897. It is a bank of deposit, discount, and circulation, issuing its own notes, and having an exclusive monopoly of this privilege for the entire country. It is a public institution, the government appointing a governor and two deputy governors, all of whom must be stockholders in the bank. The affairs of the institution are managed by a council general of 20 members, who are elected by 200 of the principal stockholders. No bills are discounted having more than three months to run before maturity, and as a general thing must be guaranteed by three approved signatures, though in some instances two are accepted. The governor annually makes a report of the condition of the affairs of the bank, with statements in detail of its issues, assets, loans, and other particulars. The annual dividends are limited to 5 per cent.; all profits over that amount being invested in 5 per cent, consolidated stock, to be divided among the stockholders at the expiration of the charter.

In 1848 banks existed at Rouen, Lyons, Havre, Lille, Toulouse, Orleans, Marseilles, Nantes, and Bordeaux; but by the provisional government these were united to the bank of France. The bank has now 62 branches in various parts of France. In August, 1870, specie payments were suspended, and have so continued to the present time (December, 1872); but the premium on gold has never been over 1 per cent. In October, 1872, the bank had of notes in circulation 2,524,140,010 fr., held cash in hand 786,-534,812 fr., treasury bonds and rentes immobilisees 1,450,367,500 fr. - Belgian Banks. The oldest of these is the societe generate, founded Aug. 28, 1822, capital 50,000,000 florins. It was a bank of discount, and managed the finances of the government till after the separation of Belgium from Holland, when it resigned that function to the bank of Belgium. This latter institution, organized originally with a capital of 20,000,000 francs, was in 1838 compelled to suspend payment, a difficulty out of which it was extricated by the government. However, in 1839 it suspended again.

In 1841 its capital was increased by 10,000,000 fr., the subscribers to the new stock receiving 5 per cent., while the old stockholders were to have but 4. In addition to this rate of interest, the bank has paid a semi-annual dividend. Up to 1850 it had charge of the affairs of the government, when it resigned them to the National bank of Belgium, founded May 5, 1850. This institution, which is a joint-stock bank, has a capital of 25,000,000 fr. It is a bank of deposit and exchange, and is allowed to issue notes to three times the amount of the coin in its coffers, and issues them of the denominations of 20, 50, 100, 500, and 1,000 fr. In this bank the societe generate took 10,000,000 of the capital, and the bank of Belgium 15,000,000, both agreeing to cease their issues of notes and abandon their discount business, although retaining their organization and receiving deposits. Oct. 9, 1872, the National bank of Belgium held of specie 123,625,000 fr., had made discounts and advances 284,400,000 fr., and had a circulation of 253,550,000 fr.

It pays large dividends to its stockholders. - Netherlands. The bank of the Netherlands was first chartered in 1814, with a capital of 5,000,000 florins, which was increased to 10,000,000 in 1819 and 15,000,000 in 1838. Subsequent changes have been made, the last in 1863, when it was rechartered. On Oct. 14, 1872, the condition of the bank was as follows: coin and bullion, 117,768,000 fl.; discounts and advances, 106,056,000 fl.; notes in circulation, 163,332,000 fl.; deposits, 36,-456,000 fl. - Austria. The National bank of Austria was founded in Vienna in 1816, for the purpose of restoring the finances and credit of the government, which were greatly impaired. It has the exclusive privilege of issuing circulating notes. Its capital is 110,-250,000 florins, and its condition, Oct. 9, 1872, was as follows: coin and bullion, 138,760,000 fl.; discounts and advances, 186,480,000 fl.; circulation, 319,190,000 fl. Its charter extends to 1876, and it loans to the state, in consideration of the privileges granted it, 80,000,000 fl. without interest.

The rate of discount varies between 4 and 5 per cent, per annum; it issues bills of 5, 10, 100, and 1,000 fl.; and it has 22 branches in different parts of the empire. - German Empire. The Royal bank of Prussia was established at Berlin, June 17, 1765, as an exchange and loan bank, with a capital of 400,000 thalers. Dec. 31, 1871, its capital was: bank shares, 20,000,000 thalers; state active capital, 1,906,800; and it had a reserve fund of 6,000,000 thalers, giving an actual working capital of 27,906,800. It held deposits of 20,577,088 thalers; notes either in circulation or in the hands of the bank or its branches, 360,-723,312; bills of exchange, 114,856,512; Lombard loans, 28,617,865; gold and silver coin and bullion, 277,528,846. Its total transactions, receipts, and disbursements for 1871 amounted to 6,866,889,600 thalers. At the close of 1871, the Prussian branch comprised the chief bank at Berlin and 163 branches in the several provinces of the state, including Alsace and Lorraine. For the year the average rate of discount was 4.16 per cent., Lombard rate 5.16 per cent. Although this institution is a government one, it does not possess niono-poly privileges, but other banks are permitted throughout the kingdom.

Indeed, much freedom in banking, under certain restraints, has been for years past permitted in northern Germany. The popular or cooperative banks established under the initiative of Sch'ultze-Delitzch have proved a highly important and most beneficent class of institutions in enabling workmen to combine their means for mutual financial assistance in business in a small way. Their study is a subject worthy of the attention of the workmen of this country. They are established without the assistance of capitalists, and make advances only to their members. - The Royal bank of Nuremberg, Bavaria, is an old institution, which does a business of exchange, discount, loan, and deposit. It is connected with the state, and its affairs are managed by finance ministers. It has several branches. No publication of its affairs is made. The Loan and Exchange bank of Bavaria began operations in 1835, and was chartered for 99 years from 1834. It lends on goods, and discounts bills of exchange, Bavarian securities, and specie, and effects fire and life insurance. Its issue is limited to 8,000,000 florins, 2,000,-000 being based on specie. - The bank of Leip-sic, Saxony, was founded in 1839, with a capital of 1,500,000 thalers, which has since been increased, provision also being made for a large reserve.

The Saxon bank in Dresden was founded in 1865, and on Dec. 31,1871, .held of coin and bullion 9,215,000 thalers, treasury and other notes 1,400,000 thalers, bills of exchange 11,678,000 thalers, Lombards 4,282,000 thalers, and had notes in circulation 20,988,000 thalers. - There are four banks at Stuttgart, Wtirtem-berg. There are also banks at Konigsberg, Frankfort, Cologne, Darmstadt, Weimar, Brunswick, Bremen, Dessau, and other points in the German empire, issuing circulating notes. - Switzerland. Basel and Geneva have long been famous for the character and wealth of their banks, but the earliest Swiss bank of issue, that of St. Gall, only dates from 1836. At the end of 1869 there were 19 such banks in that country - those of St. Gall, Zurich, Vaud, Basel, Geneva (bank of Commerce and bank of Geneva), Thurgau, Glarus, Neufchatel, Fribourg, Aargau, Valais, Lucerne, Soleure, Bern, Ticino, Grisons, and Schatfhausen. They make dividends of from 4 1/4 to 7 1/2 per cent. Their condition, Dec. 31, 1869, was as follows: circulation, 18,468,122 fr.; deposits, 49,166,405; specie, 19,380,922; capital, 73,357,784; loans (exclusive of those of the bank of St. Gall, capital 5,358,613 fr.), 71,667,706. - Italy. The oldest existing bank in Italy is that of the Monte di Paschi of Siena, founded in 1622. The National bank of Italy, created by royal decree Nov. 14, 1849, was the result of a union between the two banks at Genoa and Turin, the former founded in 1844, the latter in 1847. Its charter lasts till Dec. 31, 1889, and its capital, originally 40,000,000 lire, is now 100,000,000. By act of Sept. 3, 1868, the circulation of bank notes was limited to 700,000,000 lire.

They are a legal tender by act of May, 1866. The bank has gradually extended its action over Italy, and besides seats in Genoa, Turin, Milan, Naples, Palermo, Florence, and Venice, had in 1870 55 branches in all parts of the kingdom. It is a bank of discount, deposit, and circulation. Its condition in 1870 was as follows: Discounts, 828,666,172 lire; average circulation, 775,879,-712. On Oct. 31, 1868, it had specie and bullion 178,000,000 lire. The state is a large debtor to this institution, and its financial operations are mainly conducted by the aid of it. There are also the following: Bank of Naples, bank of Palermo, National bank of Tuscany, Credit bank of Tuscany, Mercantile Establishment of Venetia, Anglo-Italian bank (founded in London in 1864), Farmers' Credit bank of Pisa, National Discount bank of Tuscany, General bank of Genoa, Italian Credit bank of Turin, Discount and Silk bank of Turin, etc. In August, 1871, there were in Italy 39 credit institutions and banks (the National bank and branches counting as 1), and 57 people's banks.

Of the former 31 publish reports showing a paid-up capital of 86,141,268 lire; and of the latter 51 give reports showing a paid-up capital of 17,501,855 lire. - Spain, Portugal, Denmark, Sweden and Norway, Russia, and Greece, all have their baling systems, more or less intimately connected.with the fiscal operations of their resped governments. - Banking in THE United States. The Bank of North America. During the war of the revolution, the country being extremely poor, with few industries but agriculture, and quite denuded of the precious metals, from a heavy and long continued adverse foreign trade, the congress of the United States experienced great difficulty in providing the requisite means for carrying on hostilities. On May 10, 1775, soon after the battle of Lexington, congress made preparation to issue continental paper, $2,000,000 of which were put in circulation on June 22 following. From month to month these issues, which in the aggregate reached $300,000,000, depreciated, until eventually they became entirely valueless, notwithstanding the passage of laws making them a legal tender for the payment of debts.

On May 17, 1781, a plan of a national bank was submitted to congress by Robert Morris of Pennsylvania, the principal provisions of which were as follows: The capital to be $400,000, in shares of $400 each; that each share be entitled to a vote for directors; that there be 12 directors chosen from those entitled to vote, who at their first meeting shall choose one as president; that the directors meet quarterly; that the board be empowered from time to time to open new subscriptions for the purpose of increasing the capital of the bank; statements to be made to the superintendent of the finances of America; that the bank notes payable on demand shall by law be made receivable for duties and taxes in every state, and from the respective states by the treasury of the United States; that the superintendent of the finances of America shall have a right at all times to examine into the affairs of the bank. On May 26 congress passed the following: "Resolved, that congress do approve of the plan for the establishment of a national bank in these United States, submitted for their consideration by Mr. R. Morris, May 17, 1781, and that they will promote and support the same by such ways and means, from time to time, as may appear necessary for the institution and consistent with the public good; that the sub-scribers to the said bank shall be incorporated agreeably to the principles and terms of the plan, under the name of ' The President, Directors, and Company of the Bank of North America,' so soon as the subscription shall be filled, the directors and president chosen, and application for that purpose made to congress by the president and directors elected." On Dec. 31 following congress passed "an ordinance to incorporate the subscribers to the bank of North America." The first president was Thomas Willing, and the bank became at once a most important auxiliary in aid of the finances of the government, and so continued to the conclusion of the war.

This institution was also incorporated by the state of Pennsylvania, on April 18, 1782 the bank commenced business in January 82, with a capital of $400,000, of which2,000 had been subscribed by the government. In the year 1785, when an ill feeling had arisen between the government of the state of Pennsylvania and the bank, the former repealed the charter which it had granted in 1782. The bank, however, continued its operations under the charter granted by the general government till 1787, when it was rechartered by the state of Pennsylvania. It has from time to time been re-chartered, and now exists under the national system with a capital of $1,000,000, and a surplus of $1,000,000. - The First Bank of the United States. On the organization of the government of the United States under the constitution, Alexander Hamilton, in his masterly report on the finances in 1790, urged upon congress the importance of establishing a bank of the United States. This measure, although it met with vigorous opposition in the house of representatives, passed that body Feb. 8, 1791, having on Jan. 20 passed the senate with but slight resistance.

The following abstract of the 12 clauses of the charter will give an idea of the act: 1. The capital shall be $10,000,000, to be divided into 25,000 shares- of $400 each. 2. Any person, copartnership, or body politic may subscribe for such number of shares as he, she, or they may think proper, not exceeding 1,000, except as regards the subscription of the United States. The subscriptions, except those of the United States, shall be payable one fourth in gold and silver, and the remaining three fourths in certain 6 per cent, stocks of the United States. 3. The sub- scribers are incorporated under the name and style of "The President, Directors, and Com- pany of the Bank of the United States," and to continue till March 4, 1811. The bank is authorized to hold property of all kinds, inclusive of its capital, to the amount of $15,-000,000. 4. Twenty-five directors are to be elected by a plurality of the votes cast, on the first Monday in January of each and every year, for one year only, and the directors are empowered to choose one of their number for president. 5. As soon as the sum of $400,000 is received on account of the subscriptions, in gold and silver, on proper notice being given, the bank may be organized. 6. The directors are authorized to choose such other officers, clerks, and servants as may be necessary for the bank, and shall otherwise manage the affairs of the bank. 7. This clause prescribes the " rules, restrictions, limitations, and provisions which shall form and be fundamental articles of the constitution of said corporation." 8. If the corporation, or any person or persons for or to the use of the same, shall buy or sell any goods, wares, or merchandise whatsoever, contrary to the provisions of this act, such person or persons shall forfeit and lose treble the value of said goods, wares, and merchandise, one half to the United States, and the remainder to the informer. 9. If the corporation shall lend to the government of the United States any sum of money to an amount exceeding $100,000, or to any state to an amount exceeding $50,000, or to any foreign prince or state (unless previously authorized by law), all and every person concerned in any way in causing the same to be lent shall for each and every offence, on conviction, forfeit and pay a sum treble the value of said loan or loans - one fifth to the informer, and four fifths to the United States. 10. Bills or notes of the bank payable in coin shall be taken in payments to the United States. 11. The president of the United States may within 18 months from April 1, 1791, cause a subscription to be made to the stock on behalf of the United States for' an amount not exceeding $2,000,000, to be paid out of the moneys which shall be borrowed by virtue of either of two certain acts providing for the payment of the debt of the United States, "borrowing from the bank an equal sura to be applied to the purposes for which the said moneys shall have been procured; reimbursable in 10 years in equal annual instalments, or at any time sooner, or in any greater proportions that the government may think fit 12. That no other bank shall be established by any future law of the United States during the continuance of the corporation hereby created, for which the faith of the United States is hereby pledged." The bank was established in Philadelphia, with branches at different points.

The dividends of the bank averaged from 8 to 10 per cent. per annum, being much below those of the bank of North America in previous years; which, in the words of a distinguished writer, now "gradually declined as other banks sprang into existence." In 1808, three years prior to the expiration of the charter, application was made to congress for a renewal of the charter, and Mr. Gallatin, the then able head of the treasury department, in obedience to a resolution of the senate, reported to congress upon the memorial. Mr. Gallatin proposed some changes in the new act of incorporation, and highly recommended the reincorporation of the bank, for which he gave his reasons in a clear and conclusive manner. Nothing, however, was done. From time to time the matter was brought to the attention of congress, until Feb. 5, 1811, when a bill was brought forward, but was on Feb. 20 defeated by the casting vote of Vice President Clinton. The bank was now obliged to wind up its affairs, which was done without at all convulsing the country. Within about 18 months the stockholders had received 88 per cent, on their stock. On finally closing its business, the assets yielded to the stockholders a premium over the par value of 8 1/2 per cent.

An application had previously been unsuccessfully made to the legislature of Pennsylvania for the re-charter of this institution, with a capital of $5,000,000. - Second Bank of the United States. During the war of 1812-15 the government, which was embarrassed for the want of means, had received important aid from the banks. By this means the banks, with the exception of those in New England, were, in August and September, 1814, driven to a suspension of specie payments. The finances of the government were now in a terrible condition, when, on Oct. 6, Alexander J. Dallas was called to the head of the treasury department. Never before had there been greater need of a master mind in that important office. Within Jess than a fortnight the new secretary communicated to congress a report of extraordinary ability, in which he strongly recommended the establishment of a national bank, as the remedy required again to bring the finances into order. Various plans for a bank were brought forward in congress, which resulted in nothing, until, on Jan. 20, 1815, a bill was passed. This bill was vetoed by President Madison, on the ground that it would not accomplish the objects rendered necessary by the state of the revenue and the condition of the country.

On April 3, 1816, however, a bill for a bank of the United States, which had previously passed the house of representatives, was adopted by the senate, and, receiving the signature of the president, became a law. The corporate title of this institution was "The President, Directors, and Company of the Bank of the United States." Its capital was to be $35,000,000, composed of 350,000 shares of $100 each; $7,000,000 of the stock was to be subscribed by the United Statesv and the remaining $28,000,000 by individuals, companies, or corporations. The charter was to extend to March, 3, 1836, and the bank was authorized to organize and commence business so soon as $8,400,000, exclusive of the subscription of the United States, was paid in. It was prohibited from lending on account of the United States more than $500,000, or to any state more than $50,000, or to any foreign prince or power any sum whatever, without the sanction of law previously being obtained. The bank went into operation Jan. 7, 1817, and through its agency the other banks throughout the country were enabled and induced to resume specie payments. An unsuccessful effort was made in 1818 to repeal the charter, on the ground of alleged mismanagement.

President Jackson in his message of December, 1829, intimated that "constitutional difficulties" might interfere to prevent its recharter, and expressed the desire that congress might take the matter into early consideration. Committees of both houses reported favorably to a recharter, but no application was made by the bank until the session of 1831-'2. On July 4, 1832, a bill re-chartering the bank was sent to the president, who on the 10th of the same month returned it with a message stating his objections to it. An effort now being made to pass the bill over the veto of the president, but without success, the bank on March 3, 1836, ceased to act under the charter granted by the United States, but was in the same year rechartered by the state of Pennsylvania, with the same capital. On Oct. 9, 1839, the United States bank suspended specie payments for a second time, having previously suspended in 1837, a measure which was adopted immediately by all the banks throughout the state of Pennsylvania, and eventually, with comparatively limited exceptions, throughout the country.

On Jan. 15, 1840, in compliance with an act of the legislature, it resumed specie payments - to suspend finally on Feb. 4. On winding up its affairs, after payment of its debts, there remained nothing to its stockholders, the entire capital having been sunk. - State Banks. Prior to the passage of the act "to provide a national currency," etc, by congress, in 1864, the charter of all banks of issue and deposit was by the several states. No fewer than 1,400 of these state institutions existed in 1856-'7. In the New England states at that date there were 507 banks and branches, with a capital of $114,611,752. An important feature in New England banking at that time was the " Suffolk bank system," through which the notes of all New England banks were collected and redeemed at the Suffolk bank in Boston, each bank making a stipulated deposit for that purpose, amounting in the aggregate to $300,000. - National Banks. The exigencies of the civil war, 1861-'5, requiring that the government of the United States should have other than the ordinary demand among the people for the absorption of the bonds which it was from time to time issuing, led to the law of 1864 entitled "An act to provide a national currency, secured by a pledge of United States bonds, and to provide for the circulation and redemption thereof." This act was approved June 3, 1864, and provides among other things for a separate bureau in the treasury department, the chief officer of which shall be denominated the comptroller of the currency, and it shall be under the general direction of the secretary of the treasury; that associations for carrying on the business of banking may be formed, consisting of not less than five persons; that no association shall be organized under this act with a less capital than $100,000, nor in a city whose population exceeds 50,000 with a less capital than $200,000, but that banks with a capital of not less than $50,000 may, with the approval of the secretary of the treasury, be established in any place the population of which does not exceed 6,000; that such associations shall have existence for 20 years, and may exercise the general powers of banking companies; the capital shall be divided into shares of $100 each; that stockholders shall be equally and ratably liable to the extent of the stock for the debts and contracts of the bank; that every association, preliminary to the commencement of banking business, shall transfer United States bonds to an amount not less than $30,000, and not less than one third of the capital stock paid in; that upon the proper examination being made into the affairs of the proposed institution, it shall be entitled to receive from the comptroller of the currency circulating notes equal in amount to 90 per cent, of the current market value of the bonds transferred, but not exceeding 90 per cent, of the par value of said bonds; that notes to an amount not exceeding $300,000,000 may be issued under this act; that these notes shall be received at par in all parts of the United States in payment of taxes, excises, public lands, and all other dues to the United States, except for duties on imports, and also for all salaries and other debts and demands owing by the United States to individuals, corporations, and associations within the United States, except interest on the public debt, and in redemption of the national currency; that the rate of interest to be charged shall be that allowed by the laws of the state or territory where the bank is located, or in the absence of any such rate, not exceeding 7 per cent.; that each of the banks in St. Louis, Louisville, Chicago, Detroit, Milwaukee, New Orleans, Cincinnati, Cleveland, Pittsburgh, Baltimore, Philadelphia, Boston, New York, Albany, Leavenworth, San Francisco, and Washington city shall at all times have on hand in lawful money of the United States an amount equal to at least 25 per cent, of the amount of its notes in circulation and its deposits, and that all others shall keep a reserve of not less than 15 per cent.; that every association shall pay to the treasurer of the United States in the months of January and July 1/2 per cent, each half year on the average amount of its notes in circulation, and a duty of 1/4 per cent. each half year upon the average amount of its deposits, and a duty of 1/4 per cent, each half year on the average amount of its capital stock beyond the amount invested in United States bonds; that any state bank may become a national bank under this act.

By an act amending the foregoing act, approved March 3, 1865, it was provided that notes shall be issued to associations according to capital as follows: to each not exceeding $500,-000, 90 per cent.; to each whose capital exceeds $500,000, but does not exceed $1,000,000, 80 per cent.; to each whose capital exceeds $1,000,000, but does not exceed $3,000,000, 75 per cent.; to each whose capital exceeds $3,-000,000, 60 per cent.; and that $150,000,000 of the entire amount of circulating notes authorized to be issued shall be appropriated to associations in the states, in the District of Columbia, and in the territories, according to representative population, and the remainder shall be apportioned by the secretary of the treasury among associations formed in the several states, in the District of Columbia, and in the territories, having due regard to the existing banking capital, resources, and business of such state, district, or territory. By an act to provide ways and means for the payment of compound-interest notes, approved March 2, 1867, it was provided that temporary loan certificates, bearing 3 per cent, per annum interest, may be issued to an amount not exceeding $50,000,000, and used for this purpose; and further, that said certificates may constitute for any national bank a part of the reserve provided for by law, provided that not less than three fifths of the reserve of such bank shall consist of lawful money of the United States. By a further act approved July 25, 1868, provision was made for the issue of an additional amount of $25,000,000 of temporary loan certificates.

By an act approved July 12, 1870, it was provided that $54,000,000 additional circulation may be issued to national banks; that the circulation of no bank thereafter organized shall exceed $500,000; that at the end of each month an amount of certificates of indebtedness equal to the amount of notes issued during that month shall be called in, paid, and cancelled. This act also provides for the issue of circulating notes redeemable in coin to such banks as may be instituted, the circulation of no such bank under said act to exceed $1,000,000, these notes to be secured by pledge of United States bonds. This act further provided for the redistribution of $25,000,000 of bank circulation to banks in states not having their proper proportion, to be taken from banks in states having circulation in excess. This, however, was not to be done until the full amount of $54,000,000 of new circulation provided for in this act had been applied for and issued. Under the provisions of this act four gold banks have been authorized: one in Massachusetts, with a capital of $200,000 - circulation issued, $120,000; and three in California, with an aggregate capital of $2,800,000 - circulation issued $1,481,100. By means of a provision in "An act to amend an act entitled 'An act to provide internal revenue,"' etc, approved March 8, 1865, congress effectually drove from circulation the notes of all banks chartered under state laws by taxing all such circulation paid out by them 10 per cent, per annum.

On Oct. 3, 1872, there were in operation in the United States 1,919 national banks, and their condition was as follows:

RESOURCES.

Loans and discounts.....

$372,520,104 35

Overdrafts.....

4,677,819 12

United States bonds to secure circulation...

382,046,400 00

United states bonds to secure deposits.....

15.479,750 00

United States bonds and securities on hand.

12.242.550 00

Other stocks bonds and mortgages....

23.533,151 73

Due from redeeming and reserve agents....

80,717.071 30

Due from other national banks ............

84,486,598 87

Due from state banks and bankers.........

12,976.378 01

Real estate, furniture, and fixtures.........

82.270,498 17

Current expenses......

6,310,428 79

Premiums..........

6,546,848 54

Checks and other cash items..............

14.916.784 34

Exchanges for clearing house.....

110,036,815 37

Bills of other national banks...............

15,734.098 00

Bills of state banks

53 198 00

Fractional currency......

2,151.747 88

Specie.......

10,229,756 79

Legal tender notes......

102.074,104 00

Clearing-house certificates.....

8.632,000 00

United States certificates of deposit.........

6,710,000 00

Three per cent, certificates................

1.555.000 00

$1,755,857,098 24

LIABILITIES.

Capital stock.............

$479,629,174 00

Surplus fund.............

110,257,516,45

Undivided profits...................

46,628,784 50

National bank notes outstanding....

833,495.027 00

State bonk notes outstanding.............

1,567 143 00

Dividends unpaid................

3.149,749 61

Individual deposits......

613.290,671 45

United States deposit's.....

7,858,772 41

Deposits of United states disbursing officers.

4 563 833 79

Due to national banks..........

110,047,847 67

Due to state banks and bankers......

88,789,088 82

Notes and bills rediscounted.......

5 549.431 8

Bills payable.......................

6,040,562 66

$1,755,S57,098 24

The distribution of national banking capital throughout the country is very unequal, and based upon no sound or equitable principles. This is shown by the tact that Boston, with a population of 250,000 and a manufacturing industry of $111,000,000 per annum, has 48 banks With a capital of $48,600,000 and circulation of $26,059,468; while Philadelphia, with a population of 674,000 and a manufacturing industry of $325,000,000 per annum, has but 29 banks with a capital of $16,235,000 and a circulation of $11,383,620. - In several of the states banks exist under state charters, but without circulation. In the state of New York there are 70 state banks, having on Sept. 21, 1872, a combined capital of $24,845,040; circulation (not yet sent in for redemption), $126,027; deposits, $78,305,491; loans, $66,-076,361; and specie, $1,261,772. In Pennsylvania, and especially in Philadelphia, the effort has been made, and to some extent with success, to supply the great deficiency of national banks with state banks - the former being quite inadequate to the present large and rapidly ex-tending manufacturing business and trade of that city. - Banks of Canada. The condition of the Canada banks, Sept. 30, 1872, was as follows: paid-up capital, $44,157,690; circulation, $24,422,451; deposits, $57,581,646; specie, $6,601,380; loans to government, $557,238 - to corporations and individuals, $109,521,798. - Clearing Home. The clearing house is an institution founded, not merely upon the idea of saving time and trouble in the use of the precious metals, but also of circulating notes.

All the banks and bankers associated as members of a clearing house are for this purpose, as it were, but one individual. The clearing house of London, the first of its kind, originated among the bankers of that city, whose transactions in the checks, bills, and drafts drawn upon each other became so large as to call for the daily and even hourly use of vast sums in bank notes by all of them. Appreciating how readily the debits and credits respectively due or held by them might be set off the one against the other, they formed the clearing house, where up to 4 o'clock each day all drafts, bills, etc, drawn upon each individual member were taken. The system of the London clearing house has recently been much extended and improved, and all balances are settled by checks drawn upon the bank of England - no bank notes being required at all. Clearing houses exist in New York, Philadelphia, Boston, and other cities of the United States. The system in that of Philadelphia is equal and in some respects superior to that of any other in the United States. The clearings are made each morning at 8.30, just before which hour a messenger and a clerk from each bank are at the clearing house. The clerks take their seats inside a series of desks arranged in the form of a hollow oval.

Each messenger brings with him from his bank a sealed package for each other bank, containing all the checks or drafts on such bank. The name of the bank sending and that of the bank to which it is sent are printed on each package, and the amount sent is written thereon. The messengers take their places near the desks of their respective banks, and they have with them tabular statements of the amount sent to each bank and the aggregates. These are exhibited to the respective clerks and noted by them on the blank forms. At 8.30 precisely the manager calls to order and gives the word, when all the messengers move forward from left to right of the clerks, handing in to those clerks the packages addressed to their respective banks, and taking receipts for them on their statements. When the circuit is completed all the packages have been delivered and received, and the amounts and the aggregates, both debtor and creditor, noted by the clerks. When the clerks find all correct the messengers take the packages received, and return to bank. The several clerks then pass round a memorandum of the debits, credits, and balance, each of his respective bank.

When these memoranda have made the circuit, each clerk has on his statement the debits, credits, and balance, whether debtor or creditor, of each bank. If these debits and credits and debtor and creditor balances are found to balance, the clerks now leave the clearing house. If not, they remain until the error or errors are discovered. The balances due by the several banks are paid in to the clearinghouse that day by 11.30 A. M., and are receivable by the creditor banks by 12.30 P. M. A second clearing of drafts, etc, received by the morning's mail, is made at the clearing house by the messengers at 11.30 A. M. Each bank is obliged daily to furnish to the clearing house a statement of its condition at the end of business hours on that day; and tables are daily furnished to the several banks of the condition of all the banks in the clearing house. Complete records of all the transactions, of the state of the banks, etc, are preserved in the books of the clearing house, precisely as are the business transactions of any bank, or other corporation or mercantile firm.

From October, 1871, to October, 1872, the operations of the New York clearing house were as follows: exchanges, $33,844,309,508; cash balances, $1,428,582,707; average daily exchanges, $105,904,277; average daily balances, $3,939,205, or less than 3 3/4 per cent.; so that by the intervention of this institution $3 75 are made to do the work which would require $100 without it, and which in fact does require $100 in the country, where men are isolated. (See also Savings Bank).