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-i. 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 :"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. On the afternoon of Tuesday and Friday, however, the scene is very different. All idlers are then excluded, but any one may enter who has business to transact. The 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," . 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

the amount of money which requires to be sent thither, the bills may be purchased at a fraction below their normal value; but if the payments to be made in Calcutta exceed the amount of the bills, then a competition for the bills ensues, and their price is slightly enhanced. But the range of variation never exceeds the difference between the cost of postage on the one hand, and the expense and inconvenience of transmitting specie on the other. The normal price of a bill, as we have said, is simply the amount of the bill, minus the discount on the time it has to run. Accordingly, by means of these bills of exchange, the whole cost, risk, and inconvenience of collecting and transmitting specie from one country to another is saved. And this saving is really an immense one. If the payments of commerce had to be sent backward and forward from country to country, not all the specie in the world would suffice to carry on operations so vast. If the agency of bills were suspended for a few months even between England and India, the drain of currency would speedily produce a dead lock in both countries. Such is the importance of the operations in the Royal Exchange; and there are no others, even in this Capitol of money and trade, which display in so remarkable a manner the immense extent of British commerce, as well as the skill and mutual good-faith with which its operations are carried on.

The operations on the Stock Exchange are of quite a different nature. The property there dealt in is stocks and shares of all kinds: Government securities, ranging in solidity from British consols, the steadiest of all, to Greek coupons and Spanish passives railway shares, mining shares, and shares and bonds of joint-stock companies of all kinds. In these the public invests its spare capital, and the transfer of these stocks from one hand to another, by buying and selling, is so great that the daily average of transactions amounts to many millions

sterling. The commission upon these transactions - which varies from one-eighth per cent on the sale or purchase of Consols, to onefourth per cent on the dealings in other and more variable kinds of stock-amounts to a large sum; and this sum constitutes the profits of the stock-brokers, who conduct these sales and purchases for the public. A stock-broker ought not to deal or speculate in stocks at all. He is simply the agent by which such sales and purchases are effected. And if he himself becomes a dealer, the persons who employ him have no security that their interests will be properly attended to. He may buy for himself the stock which they commission him to sell; and in such a case it is not to be expected that he will give for it the highest price that can be obtained. But the stock-brokers are not the only parties in the Stock Exchange. There are also the stockjobbers-men who deal in stocks and shares, selling them at the highest price which they can get, and buying them at the lowest.

The entrance to the Stock Exchange-or Capel Court, as the large room is called where these operations are carried on - is through a large pillared front, or portico, facing the east end of the Bank. But it has other entrances. We remember the first time we stumbled upon this sanctuary of jobbing-upon this forbidden ground to the public, or to any one who is not a member of the brotherhood who carry on their operations here. Seeking a short cut from the eastern part of Threadneedle Street into Throgmorton Street, we entered an alley not so privatelooking as many which in this precinct connect one thoroughfare with another. Men were passing along it to and fro, and we did not doubt we should quickly emerge in Throgmorton Street. But suddenly it assumed the appearance of a cul-de-sac, and we found ourselves at the doors of a large hall, full of people and of a clamour of tongues. A porter was at the door to keep

out the profane vulgar: and the room into which we were looking, both through door and window, was the Stock Exchange. This place of business is the property of a corporation; and, unlike the Royal Exchange, no one can come there to sell or buy unless he be a member of the corporation. It is for its own members that the Stock Exchange reserves all the profits on the traffic which goes on within its walls. The business of the stockbroker is simple enough, and if he have good connections, it is as profitable as it is easy. When he gets an order to execute, all he has to do is to buy or sell at the current rate. He steps into Capel Court, and at once finds the dealers he wants. Every stock-jobber has a special line-one deals chiefly in Mexicans, another in Indian stock, and so on; and, moreover, there are places in the room where certain kinds of stock are specially dealt in. The broker finds the jobber, and, after ascertaining that the terms offered are in accordance with the ruling price, he makes the bargain, and in five minutes the business is over. The money, whether given to him to make a purchase, or received as the proceeds of a sale, passes through the hands of the broker, who deducts from it his commission, the cost of stamp or registry, &c. The business of the jobber is a much more difficult one. He is, in fact, a speculator. He buys stock in the hope of selling it again at a higher price. It is therefore indispensable that he should carefully examine the character of the stock in which he deals, and the circumstances, whether political or commercial, which from day to day affect its value. He knows that the value of stock, although substantially dependent upon the soundness of guarantee and the rate of interest which it yields, is nevertheless affected from day to day by what may be called merely moral influences-by passing gleams or shadows, flitting prejudices it may be, which affect the popularity though

not the permanent value of the stock-or merely from sympathy with the rise or fall in other stock of a similar character. The public has neither the leisure nor the knowledge sufficient to judge with confidence, and is generally more encouraged or depressed by the rumours or facts of the day than there is reason to be. All these things the jobber has to take into account; and as it is no easy matter to be a prophet, he must either be a lucky or a clever fellow if he does not sometimes come to grief. Great gains usually alternate with great losses in this kind of busi

ness.

One would think these jobbers would soon die of worry and anxiety, and often enough they are to be seen very down-in-themouth. But Nature is kind, and fits the back to the burden. Or rather, most of these men have been born with the peculiar temperament of the speculator: they have an extra amount of hopefulness, and get through life, with more excitement indeed, but hardly with less equanimity, on the whole, than any other men engaged in trade.

The most novel feature in the economy of capital during the last year or two, has been the estab lishment of great credit-companies. The special object of these companies is to provide money for carrying out industrial or financial enterprises which are worthy of support. The credit-companies do not directly engage in these enterprises: they simply launch them, or at least provide the capital requisite for carrying them on,charging a commission for their aid. One of these, the International Land Credit Company, is worthy of notice here, because its operations display in a remarkable manner the system of financial cooperation which is now being established throughout Europe, as well as the great amount of social good which may be effected on the mere principle of self-interest. There is no safer security than land; but the prime requirement in financial

operations is, that the security should not only be perfectly safe, but readily negotiable. In other words, the bonds, representing the money advanced, should not only be certain to be paid when due, but the holders of them should be able to sell them easily, or get money advanced upon them. Not one, but several financial establishments are needed to accomplish these ends on a large scale; and the International is the last and crowning company of a series previously established. It will deal with land everywhere, but at present its field of operations is in Austria. In Austria there are estates of immense size, held by individual proprietors, many of them heavily burdened with mortgages contracted on the most usurious terms. Half-a-dozen years ago some foreign capitalists discerned the fine field that was here open to them; but before foreign capital to a large amount could be attracted, it was indispensable to establish the perfect soundness of the security and the negotiability of the mortgage bonds. The first step towards this was the establishment at Vienna of the Vindobona a joint-stock company which, on receiving a percentage or commission, guarantees the repayment of loans on estates, as well as the regular payment of the interest. In this way, the creditor acquired a double security -first, the land itself, secondly the capital of the Vindobona. Next, land-banks were established which advanced money on these bonds or mortgages to their full amount thus rendering them negotiable. Next it was seen that a large and most profitable business might be carried on by the purchase and re-sale of estates-purchasing them in block, and re-selling them immediately in comparatively small portions, say of 100 to 500 acres. To accomplish this, the Banque de Credit Foncier et Industriel was established, which has agents all over Austria, who examine into titles and values, who find out proprietors ready to sell and small capitalists ready to buy, and in fact

manage the whole of this part of the business, while the Bank furnished the funds. This business proved so profitable, and the field of operations was found to be so extensive, that it was resolved to invite the co-operation of capitalists all over Europe. Hence the establishment of the International Land Credit Company. The business of this company is simply to raise funds for carrying on the highly profitable operations above-mentioned, the money being readily obtained from the public upon bonds issued by the Company, and bearing 5 per cent interest, and which are rendered more than usually negotiable, owing to the number of local land-banks and other financial establishments which are affiliated with the International. The credit of conceiving so remarkable a series of co-operative companies, and of successfully establishing it, is due to M. Langrand-Dumonceau, of Brussels. The security offered is the most complete that can be imagined-1. The land; 2. The double amount for which the purchasers give their bond; 3. The capital of the Vindobona; 4. The capital of the Banque de Credit Foncier et Industriel; and lastly, The immense capital of the International. But what is chiefly remarkable, from our point of view, is the system of financial co-operation herein displayed-a system which is destined to be ere long immensely developed - until, in fact, Europe shall become but one country as regards industrial finance, the spare capital of each country being drawn to common centres, and seeking the best market wherever that may chance to be found.

This wealthy and busy precinct has a literature of its own-journals whose special task it is to record its operations and set forth its condition. But it has more than this; for the whole country takes an interest in its bulletins. In all our daily newspapers there is a department of news, never omitted, which is scanned with devout attention by

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hundreds of thousands of readers, yet which is certainly not indebted for its popularity to any attractiveness of style or appearance. It is the driest column or columns in the paper. It is full of figures, and tables of figures (usually so repulsive to readers), preceded by a few paragraphs, seemingly of a very stereotyped aspect, and couched in language peculiar to itself. Therein we read of "Consols for delivery," "Reduced and New Threes," "Turkish Consolidés," Danish Scrip," "Greek Coupons," "New Granada Deferred," "Spanish Passives," "Russian Threes," Chilian Sixes," and other such things hard to be understood by the uninitiated, however conversant they may be with the grammar of Lindley Murray and the Dictionary of Dr Johnson. We also read that "the market is easier," or that it "opened flat," that it "assumed a more lively appearance," or that it "showed a falling tendency," or great depression." This never-omitted and much-studied portion of the paper is the City article, in which the health and spirits of the Money Market are described pathologically; and the price of stocks and shares, and the condition of all established companies quoted on 'Change, are carefully recorded. A single glance at this portion of the 'Times' will show the magnitude and variety of the enterprises quoted on 'Change. Besides the loans to foreign governments, there are upwards of 600 kinds of stock or shares in the official list, connected with railways, mines, docks, jointstock banks, colonial government securities, and miscellaneous enterprises.

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The City article is no longer read merely by a particular class of the community. All classes, and all places in the country, have a direct interest in the facts which it records. It is read with interest not merely in London, Liverpool, Manchester, Birmingham, Glasgow, and the other great centres of industry, but even in uncommercial cities like

Edinburgh, where men live by the learned professions only, and who scorn trade in the old sense of the word. In truth, nearly all men in this country are traders now, though many of them trade as it were by proxy. The joint-stock system of enterprise has of late years drawn the whole community into its vortex. As a nation, we have grown very rich. It is computed that the annual savings of the nation amount to the enormous sum of £80,000,000. Like thrifty men, we desire to employ that sum, our spare money, in the most profitable manner. Nowadays, too, we have the whole world open to us as a field of commercial and financial enterprise. In commerce, at least, nations are now brethren. No nation objects to the introduction of foreign capital to develop its resources. These two facts the vast increase of wealth in this country, and the magnitude of the field open for its employment -have given an extraordinary expansion to the joint-stock system; an expansion which has been greatly aided by the passing of the Limited Liability Act. Previous to the passing of that Act, it had been proved by long experience that business could be conducted as ably by a board of directors as by a private firm. True, the management of a public company is never so economical as that of a private firm, and the supervision of a salaried board of directors is seldom so vigilant as that of private partners, whose whole fortune is at stake in the concern. But, on the other hand, a joint-stock company obtains the command of a far larger amount of capital than private firms-which gives it a great advantage; and, moreover, in many cases, it is insured of a large amount of business, in consequence of its shareholders being also its customers. Take, for example, the case of a joint-stock bank. It may have a thousand shareholders, and all these shareholders are its customers. They have not only subscribed the capital by which the business is carried on, but they intrust