Banks form the most conspicuous architectural feature of the precinct. And naturally so, for without them trade and financial operations could not acquire the remarkable development which is here to be witnessed. They are the reservoirs of the place, into which flows the spare money of the nation, and out of which flow the monetary streams which set agoing all the other operations of the place. Besides the Bank, which in external appearance, as well as in real power, throws into the shade all its compeers, we see conspicuous among the others the large building of the London and Westminster Bank, facing on the other side of Lothbury its old opponent the Bank of England, the huge but unattractive fabrics of the Union and London Joint-Stock Banks in Princes Street, -the London and County Bank in Lombard Street, and the handsome pile of the Oriental Bank. Next in importance, as architectural features of the place, are the Insurance offices, and chief among these, the Sun, the Imperial, and North British, all in good sites in Threadneedle Street. In the third rank and soon likely to take a higher place are the offices of the Discount-houses and new Credit companies: the massive and costly edifice of the National Discount Company in Cornhill, occupying the first place in point of architecture; while in Lombard Street, the great discount-house of Overend, Gurney, & Co. (familiarly called "the

display is proceeding to an extent which has excited considerable criticism and distrust among the older and more cautious grandees of the locality. Perhaps the "old fogies" are right, if we judge from a London point of view,-for London architecture (we except the fine old churches) is a very poor affair compared with the wealth of the place.

The classification which we have made of the edifices of this monetary metropolis is likewise applicable to the population-to the busy crowds whom we see rushing to and fro-and to the pursuits which they follow. Let us see what is the style of business which each of these classes carries on. We shall find that they are all closely connected

integral parts of one great system of monetary trade, and that the line of demarcation between some of them is not drawn with sufficient sharpness to be readily perceptible to the uninitiated.

Let us describe first, generically, the leading operations of the Banks. The fundamental part of their business is to receive deposits of money. They take money into safe keeping, and they manage it in such a way as to meet the requirements of the depositors. They give the depositors cheque-books, blank forms of drafts upon the bank; and when-. ever one of these cheques is presented, either by the depositor or by any one to whom he has made it payable, the bank hands the money across the counter, in notes or in gold as may be demanded. In some

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cases the banks give interest on the sums deposited, in others they do not: and the Bank of England does not pay interest in any case." The next part of the business of banks is to recompense themselves for this management of their customers' money, by employing at usury the balance of the deposits which is not likely to be called for by the depositors. This balance amounts in ordinary circumstances to about four-fifths of the whole money deposited with the bank. When trade is stagnant, this balance is at its highest amount; when trade is brisk, or when credit is shaken, it is at its lowest. A bank, in short, must mark well the signs of the times in order to know the exact amount of the deposits which may be safely lent out. If too much be lent out, the bank is embarrassed in meeting the demands of the depositors; if too little be lent out, the bank loses its profit on the sum thus needlessly kept on hand. Having determined what portion of the deposits is not likely to be called for, the bank invests or lends out at interest this sum in various ways. First of all, it invests a portion in the purchase of Consols a species of security which is of all others the most steady in value, and the most readily negotiable; in other words, which can be most readily sold and reconverted into money. Next, the bank makes advances to its customers. Any one who has an account with a bank may in ordinary times, by tendering Government or other good stock, obtain a temporary loan on that security to the amount of three-fourths of its current value. But the most extensive kind of advances made by the banks is in the discount of commercial bills. A customer of the bank has a bill, or bills, falling due say three months hence; but by taking them to the bank he deals with, he can get cash for the full amount of these bills at once, minus three months' inter

est on that amount. In extraordinary cases, the banks and espe cially the Bank of England, the great fountainhead of credit - will make advances to some large firm or company whose position is solvent, but which is in temporary embarrassment. In this case, an agent of the bank examines the books of the firm, sees what are its assets, and decides what amount may safely be lent to it: but the bank does not accept these assets as securities for the loan-it makes the loan to the firm itself, holding the firm responsible-and its object in ascertaining the amount of the assets is simply to see that the circumstances of the firm are such as to warrant the loan being made to it. The advances made on these various forms of security — viz., stocks, commercial bills, or in aid of wealthy but temporarily embarrassed firms are for considerable periods; say, on the average, three months. But there is a portion of the banks' deposits which it would not be prudent to lend for such periods, yet which may be safely lent for a week or a day. The great point in banking is to see that every pound which is not needed by the depositors is profitably employed. day there is a surplus available for short investments. What is done with it?

Each

It is handed over to the bankbrokers, who may be called moneybrokers pure and simple. This is another class of business. These men are the intermediaries between the banks and the various other institutions, companies, or individ uals who flourish in this monetary precinct. It is the duty of these bank-brokers whose position is most onerous, and who are few in number to employ the sums at their disposal in loans at call, or for a week, or a single day. Their vigilance must be unceasing. They have to keep their eye on the expiry of each of those brief loans, and find a new investment for it;

is increased, in consequence of the bills falling due to them being in excess of the amount which they are discounting. To discount a bill is to purchase a debt falling due at a specified time. Ordinary commercial bills are as good as money; and the larger portion of what figures in the returns of the joint-stock banks as "deposits" is held by these banks in the form of commercial bills which they have discounted. The money deposited with a bank is employed in the purchase of these bills, and the rate of discount charged upon them is a chief source of bankers' profits. If a firm which has purchased a bill (by discounting it) is in need of ready cash, money can be obtained by re-discounting the bill —¿. e., selling it to a bank or other party which deals in that kind of business. And every time a bill is thus paid away, the more solid does its value become; because every party through whose hands it passes endorses it, and becomes security for its ultimate payment. In this way, bills to some extent become part of the currency, circulating from hand to hand in payments which would otherwise have to be made in cheques, notes, or gold. As every discount-house keeps an account at a bank, it can (if in temporary need of money) take some of the bills which it has discounted, and get them re-discounted at the bank with which it deals. Some years ago, however, the Bank of England refused to treat the discount-houses on the same terms in this respect as its ordinary customers. They are rivals of the Bank in the discounting line, and manage to get the lion's share of the business; and the Bank, with considerable justice, said:

แ "We have to keep on hand reserves to meet all demands that can be made upon us, whereas you trade to the full extent of your resources; in this way you make larger profits in ordinary times than we can do; and it is rather too much, when you become embarrassed by so trading, to come upon us to help you.' The discount-houses are the great

rivals of the Bank; and whenever a monetary crisis takes place, a great deal of bitter feeling arises between them; and the Bank is seldom loth to see one of these rival establishments brought to the ground.

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Let us now come to another important branch of business carried on in this precinct. Let us enter the Royal Exchange. For the greater part of every day a stranger will be at a loss to discover for what purpose so fine an edifice was erected. he enters the central court, the place looks deserted-only a few loungers, looking neither very business-like nor respectable, sauntering or sitting beneath the verandah. One may guess that some of those people have met here by appointment, as a convenient rendezvous; and what the others are waiting for, it is not easy to see. the afternoon of Tuesday and Friday, however, the scene is very different. All idlers are then excluded, but any one who has business to transact. Royal Exchange belongs to the Gresham Committee, but the public has full right of entry on the simple condition that they come there on business and not as idlers. The business consists in the buying and selling of "bills of exchange,' i. e., orders for money payable in foreign countries,-bills on China, India, Egypt, Paris, Hamburg, New York-on all the chief seats of commerce. A merchant who has to pay a sum of £10,000 in Calcutta, instead of sending specie, goes on 'Change and buys bills to that amount, which he transmits at the mere expense of postage. The price of these bills is regulated by two considerations. First, there is the length of time which a bill has to run. If it is payable four months after date, it is of course less valuable than one at three months-the discount, or rate of interest, having in each case to be deducted. But the value of these bills is also affected, like everything else, by the amount of supply and demand. If the amount of bills upon Calcutta happens to be greater than