Bank, in commerce, signifies a common repository, where persons consent to keep their money : it is also applied to certain societies or communities, who take charge of the money of others, either for the. purpose of accumulating it by interest, or preserving it in safety.
There are two principal kinds of banks ; either public, consisting of a society of monied men, who, being duly incorporated according to law, agree to deposit a considerable fund, or joint stock, to be employed for their use; by lending money upon good security, buying and selling bullion, discounting bills of exchange, etc, or private, which are established by individuals, or co-partners, who deal in the same way as the former, upon their own stock and credit.
The greatest bank of circulation in Europe, or perhaps in the world, is that of England The Company was incorporated by an act of parliament, in the fifth and sixth years of Willi am and Mary. Dividends of the profits are made half yearly, of which public notice is given, when those who have occasion for their money; mav readily receive. it; but private individuals are permitted to continue their funds, if they think proper, and may have their interest added to the principal.
The. Company of the Bank of England is under the superintend-' ance of a Governor, Deputy-gover-nor, and twenty-four Directors, who are annually elected by the general court, in a manner similar to that of the East India Company.
The stability of the Lank of Eng land is considered as equal to that of the British Government; for, before its creditors can sustain any injury, all that it has advanced to the public must be lost.
At Edinburgh, there are two public banks ; the one, called the Bank of Scotland, was established by act of parliament in 1695 ; the other, denominated the Royal Bank, was instituted by charter, in 1727Private banking companies have also, within these thirty years, been formed in almost every considerable town in Great Britain ; their purchases and payments of all kinds are made by notes, and thus the country business is in a great degree carried on by paper currency. It is almost generally believed, that the community at large has derived considerable benefit from this artificial method of increasing the circulating medium : a proposition, the truth or fallacy of which it would not be easy to demonstrate.
There is another kind of Banks, which are instituted wholly upon . the public account, and are called Banks of Deposit: their nature is not generally understood ; but their object is to reform the currency which may at any time be worn, clipped, or otherwise reduced below its standard value. Such were the banks of Venice, Genoa, Amsterdam, Hamburgh, etc. when originally established; the last in particular, being always obliged to pay in good money, according to the standard of the State. As the cash of such banks was more valuable than the common currency of the country, it necessarily bore . an agio, or an additional per cent-age, in proportion as the currency was supposed to be more or less depreciated. Thus the agio of the bank of Hamburgh, which is said to vary from fourteen to twenty per cent., constitutes the supposed difference between the standard money of the State, and the dipt, worn, and debased currency poured in from the neighbouring countries.