of the bank's business.

This same law prescribed the conditions under which notes could be
issued. It provided that the Bank of England might issue L14,500,000
of notes in exchange for securities, and any amount in addition in
exchange for an equal amount of coin or bullion. Additions to the
amount issued in exchange for securities might be made by order of the
government to the extent of two-thirds the amount of issues
relinquished by the other issuing banks, all such banks in existence
at the time the act was passed being permitted to retain, without
increasing, their existing issues. Most of these other issues having
been abandoned since 1844, the Bank of England is now permitted to
issue in exchange for securities L18,450,000. The securities against
which these issues are made were transferred to the issue department
by the banking department, and consist of the debt owed by the
government to the bank and of other government or governmentally
guaranteed securities. The issue department freely issues additional
notes in exchange for an equal amount of gold coin or bullion, and on
demand redeems notes in gold coin. Since the amount of notes all the
time outstanding greatly exceeds L18,450,000, the business of the
issue department is confined to the exchange of notes for gold coin
and bullion and the redemption of notes in gold.

The banking department receives and disburses the funds of the
government, manages the public debt, and serves as the government's
agent in most of its other financial operations; receives on deposit
from other financial institutions the money which comes into their
possession, and supplies them with such money funds as they need from
day to day in payment of checks drawn against their balances;
discounts bills of exchange with a minimum maturity of four, and in
exceptional cases six, months; and to a limited extent makes advances
on and invests in high-grade public and other securities. Besides the
English government and financial institutions, it has other customers,
but it is to be presumed that these are of a special character, since
the conditions under which it does business with private persons are
in most cases more onerous than those prescribed by other banks, and
consequently not attractive to the ordinary business man.

The so-called English Joint-Stock Banks are classified into three
groups, known as metropolitan, metropolitan and provincial, and
provincial banks. The metropoli