tween the
savings function and the commercial discount function, which are more
and more being performed by one and the same bank. The trust company
usually well exemplifies this union of functions. This will best be
explained in connection with the subject to which we now turn, the
analysis of the functions which banks perform.

Sec. 2. #Functions of banks.# Almost every bank performs various
functions useful to its customers, but some of which are not
essentially bound up with banking, and may be performed by
institutions that are not truly banks. Among these are:

(a) Maintaining a safe deposit vault, where space may be rented by an
individual to keep his valuable papers, jewels, etc. The customer
does not usually deliver to the bank possession of the valuables,
but himself retains the key to the box which the bank has no right
to open. In larger cities this work is often done by separate
institutions.

(b) Acting as money-changer to buy and sell moneys of different
nations. This function is of less importance in America than elsewhere
because of the great size of our country and of the small portion
of our boundaries touching those of other nations using different
monetary units. Moreover, the function is in large part performed for
Americans by ticket agencies at the ports of embarkation and by the
steamship companies en route.

(c) Selling bonds and other investments to customers. In smaller
communities the customers of a bank turn to it as the best source
of information for safe investments of personal or trust funds. This
opens to it a new possibility of service. Large investments, however,
are usually made through the agency of more specialized investment
brokers.

(d) Acting as trustee and business manager for passive investors, and
especially as executor and administrator of estates or as guardian of
a minor heir. This function has been taken up rapidly since about 1890
by the trust company[3] organized under state laws.

Sec. 3. #The essential banking function.# The one essential function of
a bank, however, is selling (lending) its credit to its customers in
some form which will conveniently serve the same function as money. A
bank is sometimes defined as a business whose income is derived from
lending its promises. The bank's credit is sold in the form of its
promises, the evidences of which are its receipts, depositors'
account books, drafts and checks on other banks, and bank notes. The
indispen