their capital, upon
the money to be received for the transportation of passengers and
freight. Such portion of the income of the road as remains after paying
all expenses of running and repairs, is divided semi-annually among the
stockholders. Hence the sums thus divided are called _dividends_. The
earnings of some roads are so large as to make the investment a
profitable one; so that the holder of shares is enabled to sell them at
an advance. When shares in the stock of any institution are sold at
their nominal value, the price named in the certificates, the stock is
said to be at _par_. When they are sold for more or less than their
nominal value, they are said to be above or below _par_. In large
commercial cities, as New York, Boston, Philadelphia, and others, the
purchase and sale of state stocks, and stocks in rail-roads, banks, &c.,
is a regular and extensive business of capitalists.

Chapter XXIV.

Banks and Insurance Companies.

Sec.1. Banks, we are told, were first instituted in Italy, where certain
Jews assembled, seated on benches, ready to lend money, and to exchange
money and bills; and _banco_ being the Italian name for bench, banks
took their title from this word. The first banks are said to have been
only places where money was laid up or deposited for safe-keeping. But
banks at the present day are not used for depositing alone.

Sec.2. Banks in this country can be established only by authority of law.
They are incorporated by an act of the legislature. The capital stock is
raised by the sale of shares, and issue of certificates, as in the case
of rail-roads. (Chap. XXIII., Sec.13.) The stockholders elect of their
number (usually) thirteen _directors_, who choose one of themselves as
_president_. The president and directors choose a cashier and clerks.

Sec.3. Merchants and others in commercial places, deposit in banks, for
safe-keeping, the money they receive in the course of business, and then
draw it out on their written orders as they have occasion to use it. An
order of this kind is called a _check_.

Sec.4. Persons depositing money only once, or very seldom, and intending to
draw for the same at once, usually receive from the cashier a
_certificate of deposit_, which states the name of the depositor, the
sum deposited, and to whose order it is to be paid. For the use of money
deposited for any considerable period, banks agree to pay interest,
usually less, however, than the rate es