It would go to the debit of "Bills Discounted," in the total of all the bills discounted that day, and it would go to the credit of "Drafts on London," in the total of all the drafts on London issued on that day.

The accounts in a merchant's Ledger are usually classified into Personal Accounts, Real Accounts, and Profit and Loss Accounts. The Personal Accounts are the accounts of persons who may owe the merchant money, or to whom he may owe money. The Real Accounts are accounts denoting property, such as cash, bills receivable, bills payable, merchandise, ship adventure, &c. The Profit and Loss accounts are rent, commissions, expenses, and all other accounts which are ultimately transferred to the debit or the credit of the Profit and Loss Account.

The banker's General-Ledger has no Personal Accounts, as these are all kept in the Current-Account-Ledger. The usual accounts are those I have enumerated in page 69, and are all either Real Accounts or Profit and Loss Accounts.

It would be possible (but not desirable) to introduce all the Personal Accounts into the banker's GeneralLedger, and thus to form the Current-Account-Ledger and the General-Ledger into one, and keep the whole by double entry. In this case we should omit the totals of Current Accounts, now introduced into the General-Ledger, and insert every transaction individually. If John Brown drew a cheque on the bank, the Journal entry would stand thus:

:

John Brown Dr. to Cash.

And if he paid in money to his credit, the Journal entry would stand thus::

Cash Dr. to John Brown.

All the entries passed to the Dr. and Cr. of these Personal

Accounts would of course pass to the Cr. and Dr. of Cash. Indeed, all the entries to the Dr. and Cr. of Cash would be the same as are now made in the Check-Ledger, except that the debtor column would be called creditor, and the creditor column would be called debtor. By the use of such a Check-Ledger as we have described, page 89 (for there are various kinds of Check-Ledgers), the Current Accounts are virtually kept by double entry; and we have the additional advantage that, when there are more than one Ledger, we are enabled to check each Ledger separately.

To accountants in banks where a General-Ledger is not kept, it appears strange that "Cash" should be credited for money which is paid away and debited for money which is received. But this strangeness will vanish, if for the word "Cash" they would fix in their mind the word "Cashier." If they had an account with a cashier, they would of course debit him, as they do their banker, for all moneys they paid into his hands, and credit him for all moneys they drew out. And the difference between the amounts of these debits and credits would be the balance either in their favour or against them.

In thus comparing the commercial and the banking systems of book-keeping, I have hitherto supposed that all merchants keep their books by double entry. But this is not always the case with the smaller houses. And then their system more nearly resembles the system of those bankers who do not keep a General-Ledger.

"In keeping books by single entry, the Daily-Books are kept in the same manner as in double entry, with the exception of a column of reference to the Ledger in each book, which takes the place of a column of reference in the Journal--this book being dispensed with. The entries are posted directly from the Daily-Books into the Ledger. In

the Ledger, by single entry, strictly speaking, there ought to be only one kind of accounts; namely, Personal Accounts, including all persons to whom a merchant becomes indebted, and all persons who become indebted to him." 1

It will be seen from this account, that, in mercantile book-keeping by single entry, the merchant's Ledger resembles the Current-Account-Ledger of the banker. In single entry the merchant dispenses altogether with his Journal; but the banker usually retains his Day-Book, even when he does not keep a General-Ledger. But, in this case, the Day-Book contains only the debits and credits, individually, of the Current Accounts, which are posted afterwards into the Current-Account-Ledger. In the horizontal system, as we have stated, the debits and credits of the current accounts are not entered individually in the Day-Book, but the total amounts are taken from the Paid and Received-Waste-Books.

"Wallace's Pocket Guide to Commercial Book-Keeping."

SECTION XXVII.

BANKING DOCUMENTS.

BY Y banking documents I mean prospectuses, applications for shares, letters of allotment, deeds of settlement, certificates of shares, deeds of transfer of shares, notices of calls for further payment on shares, &c., bonds of security by managers and clerks, declarations of secrecy by the same, agreements with reference to lodgment of deeds as security, cash credit bonds, letters of guarantee for the due payment of bills not endorsed by the person discounting same, or for the due payment of bills discounted to a third party, or for the due repayment of loans.

I. Forms of those documents above enumerated, used in the formation of a joint-stock bank, vary so greatly at the discretion of promoters and solicitors that it is not expedient to reproduce them here. Such forms are, however, easily obtainable.

When any persons propose to form a joint-stock bank in any district, they procure the statistical returns of the district; such as the tables of the population-the exports and imports-the duties paid-the returns of the sales in the various markets-and every other information respecting the trade and wealth of the district. If these prove satisfactory, they take notice of the banks already established there, and observe whether they are joint-stock banks or private banks-whether strong or weak-and whether likely to oppose or to join any new establishment. If the existing banks be joint-stock banks, the projectors

procure from the stamp-office a list of the shareholders, in order to observe the strength of their proprietary, and whether they reside chiefly in the district.

Having satisfied themselves that a new bank would be successful, the first document drawn up is a prospectus. This document usually sets forth the great advantage of joint-stock banking to both the public and the shareholders, and then points out the facilities of the district in which the bank is proposed to be established.

Previous to issuing the prospectus, some leading persons in the district are requested to become members of a provisional committee for the formation of the bank, and they obtain the assistance of an influential solicitor, to whose office the applications for shares are usually addressed. The committee then appoint a secretary, or sometimes the office of secretary is filled by the solicitor. Attached to the prospectus is the form of an application for shares.

As the applications come in, they are entered in a book prepared for the purpose. In the first column is entered the date of the application; then follow the name, profession, and residence of the applicant; then the number of shares applied for, and in a farther column the number of shares granted. After the committee have determined what number of shares to allot to each applicant, letters are addressed to the respective parties.

After the sums to be paid up have been received, a general meeting of the shareholders is called, when the provisional committee make a report of their proceedings. Resolutions are then passed.-1. That the report be received and printed.-2. That certain shareholders then named be appointed directors. The bank is now formed, and the government is assumed by the directors. They appoint the manager and other officers; they prepare the