PREFACE.

THE following pages are the result of a revision and enlargement of a small book on banking and kindred subjects which was published in 1866 under the title of 'Banking Currency and the Exchanges.' Exceedingly imperfect as that little work was in many respects, the public absorbed nearly one thousand copies, and that satisfactory result, all things considered, has been we think due almost entirely to the fact that it was a book about banks and banking, written after going over the ground and ascertaining by years of experience among bankers what the uninitiated wanted to know on the subject. While distinctly repudiating the smallest intention to disparage the meritorious and useful works on banking which many writers, having little besides theoretical knowledge to guide them, have published, we cannot refrain from remarking that it is impossible for writers thus equipped for the work to produce books on banking or any other science which shall be anything better than a partially safe and sound guide. No demonstration is required to prove to any one that unless a writer has practically seen for himself why this and that reform has been introduced, what has been the ensuing result, and why one way of doing the business is preferable to another and so forth, the teacher is a self-taught guide, who as

Constable the painter said has been taught by a very ignorant person. Theoretical works on banking differ from practical treatises in this, that the theorist who knows little or nothing of the practice beyond what he has gained from books and hearsay, teaches to a great extent what he imagines to be instead of what he knows to be the practice. Readers can always feel whether their guide is treading along as if he did not fear to be heard by those who know, and whether or not he is quite familiar with the streams to be forded and the passes to be traversed. This revised and enlarged manual of banking makes no pretence to do anything more than to show to the best of our ability what banks are for and how they are worked. We have certainly in some respects gone over the limits marked out for the book of which this is the second edition, but that has been necessary for the simple reason that in ten years there have been some changes. These changes have likewise given rise to certain suggestions upon which we have ventured. We have not gone much into the subject of foreign banking, because banking abroad is very little developed as compared with this Kingdom; but we have devoted a few pages to it that the reader may compare the progress which neighbouring countries are making in this important science.

To preserve satisfactory and truthful records of the practice prevailing among bankers at different periods they should be taken as direct as possible to the pages of the book. This of course prescribes what is the most difficult of all methods of book-making. One of the reasons why people are so entertained by some of the best works of fiction is, that the narrative is made up in so many cases of the real truthful experience of the writer. Persons in the same class of life who read such works of fiction have had very similar experience; and if certain

circumstances have not arisen within the knowledge of all in that class they will probably have had such a complete second-hand experience that they will appreciate the reproduction of those circumstances with almost as lively a sense of pleasure as if they were of first hand. The rapid spread of knowledge in these times SO familiarises every grown person with the elements out of which the doctrine of probabilities is constructed that every one can better gauge the truthfulness of statements generally regarding the ordinary affairs of life than in times when people had more to feel their way than to see it. This is why the simple tale that is true pleases most people more than a finely written narrative of a writer who trusts entirely to his imagination.

Treatises composed on the ground and in the atmosphere of the subject, although they may be in some respects inferior to those produced by purely theoretical writers, will have the colours nearer the truth, if we may use the expression.

The banking practice of the present day is the result of an infinite number of reforms, and from an economic point of view it has been brought to a perfection that leaves little to be desired so far as existing conditions are concerned. As business people of the better class have gradually forsaken the city, and indeed a great part of the metropolis as a place to live in, and have spread themselves over the suburbs, the business days have been shortened. A reduction in the hours during which the banks are open necessitates an earlier closing of mercantile offices. Saturday may be called now almost a dies non, and bids fair to be given up permanently to holiday making, a reform, if completely carried out, from which we believe more good than harm would result. The institution of Bank-holidays is a further encroachment