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Deposit Receipts" is a summary of the Deposit-ReceiptBook. The account called "Bills discounted" is a summary of the Discount-Register and the Discount Journal. In this way every book in the office has a corresponding summary in the General Ledger. Hence, this book is a check upon all the other books; and by means of these summaries, the partners or directors of a bank can see at once the actual state of their affairs, and can trace the progress or decline of different branches of their business.

Every branch of a Joint-Stock Bank has a "General-BalanceBook," and sends to the head-office every week a balance-sheet of its affairs as they stood on the previous Saturday night. At the head-office these various balance-sheets are consolidated, and form a general statement of the affairs of the whole bank. This statement comprises the balance of the General-Ledger at the head-office, and that of each branch. These statements are printed and bound together beforehand, so as to form a book— it is called the Statement-Book, and is laid before the directors at their weekly meetings. The balances of the General-Ledger are given in the form on the opposite page (397), and those of the Statement-Book in the form at page 405.

It will be observed that the accounts introduced into the balance-sheet on page 397 are such as would be necessary to a London bank that had country agencies and branches, and issued notes. No such bank exists. But I have introduced all these accounts, that each bank may take those which are adapted to its transactions. It will also be observed that I have kept the country business distinct from the town business, so that the comparative extent of each may be immediately perceived. I have introduced cash columns for the AMOUNT as well as the BALANCES; for although the balances are sufficient to show the actual state of the bank, yet the amounts are necessary to show the business that has been done since the previous half-yearly balance.

1. The first class of accounts, under the head of LODGMENTS, are all credit accounts; that is, the balance is on the credit side.

CURRENT ACCOUNTS are those which are usually kept by the London bankers, and are called by the Bank of England "Drawing Accounts." DEPOSIT RECEIPTS are more permanent lodgments, upon which the joint-stock banks allow interest.

The

The account "BILLS DEPOSITED," not being a cash account, might be omitted without deranging the balance of the GeneralLedger. If introduced, its balance must be placed on both sides the balance-sheet, or the totals will not agree. General-Ledger is no check upon the accuracy of this account. It should, therefore, be checked periodically, by taking off the daily amounts current from the Journal, and comparing the total with the balance of "Bills Deposited in the GeneralLedger."

Some banks distribute their bills deposited into several accounts, as "Bills Deposited by Agents," "Bills Deposited by Branches," "Bills Deposited by Private Parties," &c. &c. On the debit side of the General-Ledger these "bills deposited" are mixed with the bills discounted in different accounts, according to the places where the bills are payable, as "London Bills," "Manchester Bills," "Branch Bills," &c. Those deposited bills that are payable in the place where the bank is established, are usually distinguished from the discounted bills; one account being called "Local Bills Discounted," and the other "Local Bills Deposited."

NOTES IN CIRCULATION.-When the notes are made payable at any other place beside the place of issue, this account will only show the "apparent circulation," as the notes that have been paid by the agents, or at the other branches of the bank, cannot be brought into the account until they have been returned for reissue. I have classed this account under the head of Lodgments, because it denotes a portion of the debt due from the bank to the public.

CREDITS ON AGENTS.-When a bank grants a Bill, or Letter of Credit, upon their agents, the money received is placed to the credit of this account. When the bill is due, or the credit paid, it is placed to the debit of this account, and to the credit of the agent's cash account. The business of some banks requires a subdivision of their credits, as "Credits on London Agents," "Credits on Bristol Agents," &c. Some banks have. also an account for "Credits on Branches;" but where all the credits granted are payable on demand, they are usually placed at once to the credit of the cash account of the branch on which they are drawn.

2. Investments.-The accounts belonging to this class are

all debit accounts; that is, the balance (if any) is always on the debit side.

In the foregoing balance-sheet it is presumed that all the bills are payable in London, as the London bankers do not discount bills payable elsewhere. The division into two accounts is merely to show the comparative extent of the town and the country business. The first account includes the bills discounted for parties resident in London, and the second includes the bills discounted for parties resident in the country. Where the bills are payable at different places, they are referred, as I have already intimated, to different accounts, as "London Bills,' "Bristol Bills," "Manchester Bills," &c. It is not usual, in these cases, to distinguish between the bills discounted and the bills deposited, but to place them together on the same account; for instance, the account "London Bills" would include all bills payable in London, whether discounted or deposited. If thought proper, however, they may be easily divided into separate accounts, as "London Bills Discounted," and "London Bills Deposited."

PAST-DUE-BILLS.-When a discounted bill is not paid, it is transferred to the debit of this account. "Bills deposited" never pass into this account, but if unpaid, are returned to the parties by whom they were deposited.

When the bank purchases "Government Stock," "Exchequer Bills," "India Bonds," &c., the purchase money is passed to the debit of an account raised for the purpose. Upon re-sale the account is credited for the money received, and the difference between the money invested and the money received is passed, at the end of the year, to the debit or the credit of profit and loss account.

LOANS. This account is debited for the amount of any loan granted to a customer, or to any other party, on security. When a customer wants a temporary advance, the usual way, in London banks, is not to let him overdraw his account, but to place to his credit the sum he may require, and debit the loan account. The interest is charged upon the full amount of the loan. When the loan is repaid, this account is credited.

3. EXPENDITURE.-The accounts under this head require little explanation. "Bank Premises" is debited for the expense of altering, painting, &c., the buildings and offices connected with the bank. The other accounts are debited for the different

classes of expenditure as they occur. At the end of the year these accounts are credited, and the several amounts are placed to the debit of profit and loss account.

4. CASH ACCOUNT WITH BRANCHES.-The title of this class of accounts is sufficiently explanatory. I will only observe, that in some banks each branch keeps a distinct cash account with every other branch, and with the several agents of the bank with whom it may have transactions. But, in other banks, each branch passes all its transactions through its cash account with the head-office. It debits the head-office for whatever it may remit to either a branch or an agent, and it credits the head-office for whatever sums it may receive from a branch or an agent.

5. PROPRIETORS' ACCOUNTS.-This class of accounts refers to the internal operations of the bank.

PAID-UP CAPITAL.-If the capital has been paid up at different times, this account may be divided into "First Instalment," "Second Instalment, "Third Instalment," &c.

PRELIMINARY EXPENSES.-Several joint-stock banks have passed to an account of this sort the expense of forming the company; and these expenses are discharged out of the profits, by equal portions, in the course of five or ten years. This is considered a more equitable mode than to pay these expenses out of the profits of the first two or three years.

SURPLUS FUND.-When the whole of the annual profits are not divided among the partners or proprietors, the surplus is transferred to an account called "Surplus Fund," where it remains for the purpose of being applied to meet any losses or contingencies that may occur in after years.

PROFIT AND LOss.-To the credit of this account is placed all interest and commission received; and to the debit is placed all interest paid. These entries are made at the time the transactions occur. At the end of the year this account is credited for all the profits that have been made during the year upon Government Stock, Exchequer Bills, &c., and is debited with the several items of expenditure. The Profit and Loss Account may be subdivided into several accounts, as "Interest Received on Bills Discounted," "Commission Received," "Interest Paid on Deposit Receipts," "Charge for Agency," &c. &c. When it is not thus divided, a complete abstract of the account should be made out at the end of the year.