e, although the agent may have fraudulently exceeded and
abused his authority and the case does not fall within the provisions of
the Bills of Exchange Act.

[Sidenote: Guarantees.]

With regard to guarantees, the main incidents peculiarly affecting bankers
are the following. The existence of a guarantee does not oblige the banker
to any particular system of keeping the account. So long as it is not
unfairly manipulated to the detriment of the guarantor, there is no
obligation to put moneys paid in, without appropriation, to the guaranteed
rather than to the unguaranteed account, and on the termination of a
guarantee, the banker may close the account, leaving it to be covered by
the guarantee, and open a new one with the customer, to which he may devote
payments in, not otherwise appropriated. Where by its nature or terms a
continuing guarantee is revocable either summarily or on specified notice,
difficult questions may arise on such revocation as to the banker's duty
and obligations towards the customer, who has probably incurred liabilities
on the strength of the credit afforded by the guarantee. Although the
existence of a guarantee does not bind the banker to advance up to the
prescribed limit, he could not well, on revocation, immediately shut off
all facilities from the customer without notice, while subsequent purely
voluntary advances might not be covered by the guarantee. These
contingencies should therefore be fully provided for by the guarantee,
particularly the crucial period of the pendency of notice.

AUTHORITIES.--The Institute of Bankers (London), _Questions on Banking
Practice_ (6th ed., 1909); J. Douglas Walker, _A Treatise on Banking Law_
(2nd ed., 1885); Chalmers, _Bills of Exchange_ (7th ed., 1909); Sir J. R.
Paget, _The Law of Banking_ (2nd ed., 1908); H. Hart, _The Law of Banking_
(2nd ed., 1906).

(J. R. P.)

[1] A translation of the act of the 3rd of May 1619 may be found in the
appendix to the _Quarterly Journal of Economics_ (Boston, U.S.A.) for April
1892. These documents present a distinct picture of banking in its true
sense.

[2] The clearest account of its early days is found in Thorold Rogers'
_History of the First Nine Years of the Bank of England._

[3] The date 1876 is taken as being that when the Imperial Bank of Germany
came into full operation.

[4] _"The Grasshopper" in Lombard Street_, by John Biddulph Masters (1892).

[5] See _Vortraege und Aufsaetze hauptsaechlich au