Part 1

of 2, Slice 3 of 3 - BANKS to BASSOON]

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[v.03 p.0333] BANKS, GEORGE LINNAEUS (1821-1881), British miscellaneous writer, was born at Birmingham on the 2nd of March 1821. After a brief experience in a variety of trades, he became at the age of seventeen a contributor to various newspapers, and subsequently a playwright, being the author of two plays, a couple of burlesques and several lyrics. Between 1848 and 1864 he edited in succession a variety of newspapers, including the _Birmingham Mercury_ and the _Dublin Daily Express_, and published several volumes of miscellaneous prose and verse. He died in London on the 3rd of May 1881.

BANKS, SIR JOSEPH, BART. (1743-1820), English naturalist, was born in Argyle Street, London, on the 13th of February 1743. His father, William Banks, was the son of a successful Lincolnshire doctor, who became sheriff of his county, and represented Peterborough in parliament; and Joseph was brought up as the son of a rich man. In 1760 he went to Oxford, where he showed a decided taste for natural science and was the means of introducing botanical lectures into the university. In 1764 he came into possession of the ample fortune left by his father, and in 1766 he made his first scientific expedition to Newfoundland and Labrador, bringing back a rich collection of plants and insects. Shortly after his return, Captain Cook was sent by the government to observe the transit of Venus in the Pacific Ocean, and Banks, through the influence of his friend Lord Sandwich, obtained leave to join the expedition in the "Endeavour," which was fitted out at his own expense. He made the most careful preparations, in order to be able to profit by every opportunity, and induced Dr Daniel Solander, a distinguished pupil of Linnaeus, to accompany him. He even engaged draughtsmen and painters to delineate such objects of interest as did not admit of being transported or preserved. The voyage occupied three years and many hardships had to be undergone; but the rich harvest of discovery was more than adequate compensation. Banks was equally anxious to join Cook's second expedition and expended large sums in engaging assistants and furnishing the necessary equipment; but circumstances obliged him to relinquish his purpose. He, however, employed the assistants and materials he had collected in a voyage to Iceland in 1772, returning by the Hebrides and Staffa. In 1778 Banks succeeded Sir John Pringle as president of the Royal Society, of which he had been a fellow from 1766, and held the office until his death. In 1781 he was made a baronet; in 1795 he received the order of the Bath; and in 1797 he was admitted to the privy council. He died at Isleworth on the 19th of June 1820. As president of the Royal Society he did much to raise the state of science in Britain, and was at the same time most assiduous and successful in cultivating friendly relations with scientific men of all nations. It was, however, objected to him that from his own predilections he was inclined to overlook and depreciate the labours of the mathematical and physical sections of the Royal Society and that he exercised his authority somewhat despotically. He bequeathed his collections of books and botanical specimens to the British Museum. His fame rests rather on what his liberality enabled other workers to do than on his own achievements.

See J. H. Maiden, _Sir Joseph Banks_ (1909).

BANKS, NATHANIEL PRENTISS (1816-1894), American politician and soldier, was born at Waltham, Massachusetts, on the 30th of January 1816. He received only a common school education and at an early age began work as a bobbin-boy in a cotton factory of which his father was superintendent. Subsequently he edited a weekly paper at Waltham, studied law and was admitted to the bar, his energy and his ability as a public speaker soon winning him distinction. He served as a Free Soiler in the Massachusetts house of representatives from 1849 to 1853, and was speaker in 1851 and 1852; he was president of the state Constitutional Convention of 1853, and in the same year was elected to the national House of Representatives as a coalition candidate of Democrats and Free Soilers. Although re-elected in 1854 as an American or "Know-Nothing," he soon left this party, and in 1855 presided over a Republican convention in Massachusetts. At the opening of the Thirty-Fourth Congress the anti-Nebraska men gradually united in supporting Banks for speaker, and after one of the bitterest and most protracted speakership contests in the history of congress, lasting from the 3rd of December 1855 to the 2nd of February 1856, he was chosen on the 133rd ballot. This has been called the first national victory of the Republican party. Re-elected in 1856 as a Republican, he resigned his seat in December 1857, and was governor of Massachusetts from 1858 to 1861, a period marked by notable administrative and educational reforms. He then succeeded George B. McClellan as president of the Illinois Central railway. Although while governor he had been a strong advocate of peace, he was one of the earliest to offer his services to President Lincoln, who appointed him in 1861 major-general of volunteers. Banks was one of the most prominent of the volunteer officers. When McClellan entered upon his Peninsular Campaign in 1862 the important duty of defending Washington from the army of "Stonewall" Jackson fell to the corps commanded by Banks. In the spring Banks was ordered to move against Jackson in the Shenandoah Valley, but the latter with superior forces defeated him at Winchester, Virginia, on the 25th of May, and forced him back to the Potomac river. On the 9th of August Banks again encountered Jackson at Cedar Mountain, and, though greatly outnumbered, succeeded in holding his ground after a very sanguinary battle. He was later placed in command of the garrison at Washington, and in November sailed from New York with a strong force to replace General B. F. Butler at New Orleans as commander of the Department of the Gulf. Being ordered to co-operate with Grant, who was then before Vicksburg, he invested the defences of Port Hudson, Louisiana, in May 1863, and after three attempts to carry the works by storm he began a regular siege. The garrison surrendered to Banks on the 9th of July, on receiving word that Vicksburg had fallen. In the autumn of 1863 Banks organized a number of expeditions to Texas, chiefly for the purpose of preventing the French in Mexico from aiding the Confederates, and secured possession of the region near the mouths of the Nueces and the Rio Grande. But his Red River expedition, March-May 1864, forced upon him by superior authority, was a complete failure. In August 1865 he was mustered out of the service, and from 1865 to 1873 he was again a representative in congress, serving as chairman of the committee on foreign affairs. A personal quarrel with President Grant led in 1872, however, to his joining the Liberal-Republican revolt in support of Horace Greeley, and as the Liberal-Republican and Democratic candidate he was defeated for re-election. In 1874 he was successful as a Democratic candidate, serving one term (1875-1877). Having rejoined the Republican party in 1876, he was United States marshal for Massachusetts from 1879 until 1888, when for the ninth time he was elected to Congress. He retired at the close of his term (1891) and died at Waltham on the 1st of September 1894.

BANKS, THOMAS (1735-1805), English sculptor, son of a surveyor who was land steward to the duke of Beaufort, was born in London on the 29th of December 1735. He was taught drawing by his father, and in 1750 was apprenticed to a wood-carver. In his spare time he worked at sculpture, and before 1772, when he obtained a travelling studentship and proceeded to Rome, he had already exhibited several fine works. Returning to England in 1779 he found that the taste for classic poetry, ever the source of his inspiration, no longer existed, and he spent two years in St Petersburg, being employed by the empress Catherine, who purchased his "Cupid tormenting a Butterfly." On his return he modelled his colossal "Achilles mourning the loss of Briseis," a work full of force and passion; and thereupon he was elected, in 1784, an associate of the Royal Academy and in the following year a full member. Among other works in St Paul's cathedral are the monuments to Captain Westcott and Captain Burges, and in Westminster Abbey to Sir Eyre Coote. His bust of Warren Hastings is in the National Portrait Gallery. Banks's best-known work is perhaps the colossal group of "Shakespeare attended by Painting and Poetry," now in the garden of New Place, Stratford-on-Avon. He died in London on the 2nd of February 1805.

[v.03 p.0334] BANKS AND BANKING. The word "bank," in the economic sense, covers various meanings which all express one object, a contribution of money for a common purpose. Thus Bacon, in his essay on _Usury_, while explaining "how the discommodities of it may be best avoided and the commodities retained," refers to a "bank or common stock" as an expression with which his readers would be familiar. Originally connected with the idea of a mound or bank of earth--hence with that of a _monte_, an Italian word describing a heap--the term has been gradually applied to several classes of institutions established for the general purpose of dealing with money.

[Sidenote: Banking as a business.]

The manner in which a bank prospers is explained by David Ricardo, in his _Proposals for an Economical and Secure Currency_, in a passage where he tells us that a bank would never be established if it obtained no other profits but those derived from the employment of its own capital. The real advantage of a bank to the community it serves commences only when it employs the capital of others. The money which a bank controls in the form of the deposits which it receives and sometimes of the notes which it issues, is loaned out by it again to those who desire to borrow and can show that they may be trusted. A bank, in order to carry on business successfully, must possess a sufficient capital of its own to give it the standing which will enable it to collect capital belonging to others. But this it does not hoard. It only holds the funds with which it is entrusted till it can use them, and the use is found in the advances that it makes. Some of the deposits merely lie with the bank till the customer draws what he requires for his ordinary everyday wants. Some, the greater part by far, of the deposits enable the bank to make advances to men who employ the funds with which they are entrusted in reproductive industry, that is to say, in a manner which not only brings back a greater value than the amount originally lent to them, but assists the business development of the country by setting on foot and maintaining enterprises of a profitable description. It is possible that some part may be employed in loans required through extravagance on the part of the borrower, but these can only be a small proportion of the whole, as it is only through reproductive industry that the capital advanced by a banker can really be replaced. A loan sometimes, it is true, is repaid from the proceeds of the sale of a security, but this only means a transfer of capital from one hand to another; money that is not transferred in this way must be made by its owner. Granted that the security is complete, there is only one absolute rule as to loans if a bank desires to conduct its business on safe lines, that the advance should not be of fixed but of floating capital. Nothing seems simpler than such a business, but no business requires closer attention or more strong sense and prudence in its conduct. In other ways also, besides making loans, a well-conducted bank is of much service to the business prosperity of a country, as for example by providing facilities for the ready transmission of money from those who owe money to those to whom it is due. This is particularly obvious when the debtor lives in one town or district and the creditor in another at a considerable distance, but the convenience is very great under any circumstances. Where an easy method of transmission of cash does not exist, we become aware that a "rate of exchange" exists as truly between one place and another in the same country as between two places in different countries. The assistance that banking gives to the industries of a community, apart from these facilities, is constant and most valuable.

[Sidenote: Historical development.]

With these preliminary remarks on some main features of the business, we may pass on to a sketch of the history of modern banking. Banks in Europe from the 16th century onwards may be divided into two classes, the one described as "exchange banks," the other as "banks of deposits." These last are banks which, besides receiving deposits, make loans, and thus associate themselves with the trade and general industries of a country. The exchange banks included in former years institutions like the Bank of Hamburg and the Bank of Amsterdam. These were established to deal with foreign exchange and to facilitate trade with other countries. The others--founded at very different dates--were established as, or early became, banks of deposit, like the Bank of England, the Bank of Venice, the Bank of Sweden, the Bank of France, the Bank of Germany and others. Some reference to these will be made later. The exchange banks claim the first attention. Important as they were in their day, the period of their activity is now generally past, and the interest in their operations has become mainly historical.

In one respect, and that a very important one, the business carried on by the exchange banks differed from banking as generally understood at the present time. No exchange bank had a capital of its own nor did it require any for the performance of the business. The object for which exchange banks were established was to turn the values with which they were entrusted into "current money," "bank money" as it was called, that is to say, into a currency which was accepted immediately by merchants without the necessity of testing the value of the coin or the bullion brought to them. The "value" they provided was equal to the "value" they received, the only difference being the amount of the small charge they made to their customers, who gained by dealing with them more than equivalent advantages.

Short notices of the Bank of Amsterdam, which was one of the most important, and of the Bank of Hamburg, which survived the longest, its existence not terminating till 1873, will suffice to explain the working of these institutions.

The Amsterdamsche Wisselbank, or exchange bank, known later as the Bank of Amsterdam, was established by the ordinance of the city of Amsterdam of 31st January 1609. The increased commerce of Holland, which made Amsterdam a leading city in international dealings, led to the establishment of this bank, to which any person might bring money or bullion for deposit, and might withdraw at pleasure the money or the worth of the bullion. The ordinance which established the bank further required that all bills of 600 gulden (£50), or upwards--this limit was, in 1643, lowered to 300 gulden (£25)--should be paid through the bank, or in other words, by the transfer of deposits or credits at the bank. These transfers came afterwards to be known as "bank money." The charge for making the transfers was the sole source of income to the bank. The bank was established without any capital of its own, being understood to have actually in its vaults the whole amount of specie for which "bank money" was outstanding. This regulation was not, however, strictly observed. Loans were made at various dates to the Dutch East India Company. In 1795 a report was issued showing that the city of Amsterdam was largely indebted to the bank, which held as security the obligations of the states of Holland and West Friesland. The debt was paid, but it was too late to revive the bank, and in 1820 "the establishment which for generations had held the leading place in European commerce ceased to exist." (See _Chapters on the Theory and History of Banking_, by Charles F. Dunbar, p. 105.)

Similar banks had been established in Middelburg, (March 28th, 1616), in Hamburg (1619) and in Rotterdam (February 9th, 1635). Of these the Bank of Hamburg carried on much the largest business and survived the longest. It was not till the 15th of February 1873 that its existence was closed by the act of the German parliament which decreed that Germany should possess a gold standard, and thus removed those conditions of the local medium of exchange--silver coins of very different intrinsic values--whose circulation had provided an ample field for the operations of the bank. The business of the Bank of Hamburg had been conducted in absolute accordance with the regulations under which it was founded.

The exchange banks were established to remedy the inconvenience to which merchants were subject through the uncertain value of the currency of other countries in reference to that of the city where the exchange bank carried on its business. The following quotation from _Notes on Banking_, written in 1873, explains the method of operation in Hamburg. "In this city, the most vigorous offshoot of the once powerful Hansa, the latest representative of the free commercial cities of medieval Europe, [v.03 p.0335] there still remains a representative of those older banks which were once of the highest importance in commercial affairs. Similar institutions greatly aided the prosperity of Venice, Genoa, Amsterdam and Nuremberg. The Bank of Hamburg is now the last survivor of these banks, whose business lay in the assistance of commerce, not by loans, but by the local manufacture, so to speak, of an international coinage. In a city of the highest rank of commercial activity, but greatly circumscribed in territory, continually receiving payments for merchandise in the coin of other countries, a common standard of value was a matter of primary necessity. The invention of bank money, that is, of a money of account which could be transferred at pleasure from one holder to another, enabled the trade of the place to be carried on without any of those hindrances to business which must have followed on the delay and expense attendant on the verification of various coins differing from each other in weight, intrinsic value, standard of purity of metal, in every point in fact in which coins can differ from each other. By supplying a currency of universal acceptation the Bank of Hamburg greatly contributed to the prosperity of that city." The regulations being strictly carried out, the currency was purely metallic; the "Mark Banco" being merely the representative of an equal value of silver.

For the earliest example of a bank for the receipt of deposits carrying on a business on modern lines, we must turn, as in the case of the exchange banks, to a great commercial city of the middle ages. Private banking in Venice began as an adjunct of the business of the _campsores_ or dealers in foreign moneys. "As early as 1270 it was deemed necessary to require them to give security to the government as the condition of carrying on their business, but it is not shown that they were then receiving deposits. In an act of the 24th of September 1318, however, entitled _Bancherii scriptae dent plegiarias consulibus_, the receipt of deposits by the _campsores_ is recognized as an existing practice, and provision is made for better security for the depositors." From this act it becomes clear that between 1270 and 1318 the money-changers of Venice were becoming bankers, just as the same class of men became in Amsterdam a couple of centuries later, and as later still the goldsmiths in London.

[Sidenote: The first public bank in Europe.]

Of the early banks in Europe, the bank in Venice, the Banco di Rialto, was established by the acts of the Venetian senate of 1584 and 1587. This appears to have been the first public bank in that city and in Europe. The senate by the act of the 3rd of May 1619[1] established by the side of the Banco di Rialto a second public bank known as the Banco Giro, or Banco del Giro, which ultimately became the only public bank of the city and was for generations famous throughout Europe as the Bank of Venice. Earlier than this the _campsores_ or dealers in foreign moneys had carried on the business. The Bank of Venice (Banco del Giro) appears to have been called into existence by the natural developments of trade, but some banks have been established by governments and have been of great service to the development of the countries in which they have carried on their business. Of these, the Bank of Sweden (the _Riksbank_), established in 1656, is the earliest. This bank still exists and has always been the state bank of Sweden. It was founded by a Swede named Palmstruck, who also invented the use of the bank note--perhaps adapted for use in Europe is the better expression to employ, as notes were current in China about A.D. 800. The first bank note was issued by the _Riksbank_ in 1658. An _enquête_ made by the French government in 1729 recognizes the priority of Sweden in this matter, and declares the bank note to be an admirable Swedish invention, designed to facilitate commerce.

EUROPEAN COUNTRIES

[Sidenote: Foundation of the Bank of England.]

_United Kingdom_.--English banking may be traced back to the dealings in money carried on by the goldsmiths of London and thus certainly to the 16th century; but it has been so greatly influenced by the working of the Bank of England and by the acts of parliament connected with that institution, that a reference to this bank's foundation and development must precede any attempt at a detailed history of banking in the United Kingdom. The Bank of England was founded in 1694.[2] As in the case of some of the earlier continental banks, a loan to the government was the origin of its establishment. The loan, which was £1,200,000, was subscribed in little more than ten days, between Thursday, 21st June, and noon of Monday, 2nd July 1694. On Tuesday, 10th July, the subscribers appointed Sir John Houblon the governor, and Michael Godfrey (who was killed during the siege of Namur on the 17th of July 1695) deputy-governor. Michael Godfrey wrote a pamphlet explaining the purposes for which the bank was established and the use it would be to the country. The pamphlet supplies some curious illustrations of the dangers which some persons had imagined might arise from the establishment of the bank and its connexion with William III., deprecating the fear "lest it should hereafter joyn with the prince to make him absolute and so render parliaments useless."

The governor and the deputy-governor, having thus been appointed, the first twenty-four directors were elected on Wednesday, 11th July 1694. Two of them were brothers of the governor, Sir John Houblon. They were descended from James Houblon, a Flemish refugee who had escaped from the persecution of Alva. All the directors were men of high mercantile standing. The business of the bank was first carried on in the Mercers' chapel. It continued there till the 28th of September, when they moved to Grocers' Hall. They were tenants of the Grocers' Hall till 1732. The first stone of the building now occupied by the bank was laid on the 1st of August 1732. The bank has remained on the same site ever since. The structure occupied the space previously covered by the house and gardens of Sir John Houblon, the first governor, which had been bought for the purpose. Between 1764 and 1788 the wings were erected. In 1780 the directors, alarmed at the dangerous facilities which the adjacent church of St Christopher le Stocks might give to a mob, obtained parliamentary powers and acquired the fabric, on the site of which much of the present building stands. The structure was developed to its present form about the commencement of the 19th century.

The bank commenced business with fifty-four assistants, the salaries of whom amounted to £4350. The total number employed in 1847 was upwards of nine hundred and their salaries exceeded £210,000. Mr Thomson Hankey stated that in 1867 upwards of one thousand persons were employed, and the salaries and wages amounted to nearly £260,000, besides pensions to superannuated clerks of about £20,000 more. The number of persons of all classes employed in 1906 (head office and eleven branches) was about 1400.

Originally established to advance the government a loan of £1,200,000, the management of the British national debt has been confided to the Bank of England from the date of its foundation, and it has remained the banker of the government ever since. The interest on the stock in which the debt is inscribed has always been paid by the bank, originally half-yearly, now quarterly, and the registration of all transfers of the stock itself is carried on by the bank, which assumes the responsibility of the correctness of these transfers. The dignity which the position of banker to the government gives; the monopoly granted to it of being the only joint-stock bank allowed to exist in England and Wales till 1826, while the liability of its shareholders was limited to the amount of their holdings, an advantage which alone of English banks it possessed till 1862; the privilege of issuing notes which since 1833 have been legal tender in England and Wales everywhere except at the bank itself; the fact that it is the banker of the other banks of the country and for many years had the control of far larger deposits than any one of them individually--all these privileges gave it early a pre-eminence which it still maintains, though more than one competitor now holds larger [v.03 p.0336] deposits, and though, collectively, the deposits of the other banks of the country which have offices in London many times overpass its own. Some idea of the strength of its position may be gained from the fact that stocks are now inscribed in the bank books to an amount exceeding 1250 millions sterling.

[Sidenote: Bank Charter Act.]

In one sense, the power of the Bank of England is greater now than ever. By the act of 1844, regulating the note-issue of the country, the Bank of England became the sole source from which legal tender notes can be obtained; a power important at all times, but pre-eminently so in times of pressure. The authority to supply the notes required, when the notes needed by the public exceed in amount the limit fixed by the act of 1844, was granted by the government at the request of the bank on three occasions only between 1844 and 1906. Hence the Bank of England becomes the centre of interest in times of pressure when a "treasury letter" permitting an excess issue is required, and holds then a power the force of which can hardly be estimated.

One main feature of the act of 1844 was the manner in which the issue of notes was dealt with, as described by Sir Robert Peel in parliament on the 6th of May 1844:--"Two departments of the bank will be constituted: one for the issue of notes, the other for the transaction of the ordinary business of banking. The bullion now in the possession of the bank will be transferred to the issue department. The issue of notes will be restricted to an issue of £14,000,000 upon securities--the remainder being issued upon bullion and governed in amount by the fluctuations in the stock of bullion." The bank was required to issue weekly returns in a specified form (previously to the act of 1844 it was necessary only to publish every month a balance-sheet for the previous quarter), and the first of such returns was issued on the 7th of September 1844. The old form of return contained merely a statement of the liabilities and assets of the bank, but in the new form the balance-sheets of the Issue Department and the Banking Department are shown separately. A copy of the weekly return in both the old and new forms will be found in _A History of the Bank of England_, p. 290, by A. Andréadès (Eng. trans., 1909); see also R. H. I. Palgrave, _Bank Rate and the Money Market_, p. 297.

One result of the division of the accounts of the bank into two departments is that, if through any circumstance the Bank of England be called on for a _larger_ sum in notes or specie than the notes held in its banking department (technically spoken of as the "Reserve") amount to, permission has to be obtained from the government to "suspend the Bank Act" in order to allow the demand to be met, whatever the amount of specie in the "issue department" may be. Three times since the passing of the Bank Act--during the crises of 1847, 1857 and 1866--authority has been given for the suspension of that act. On one of these dates only, in 1857, the limits of the act were exceeded; on the other two occasions the fact that the permission had been given stayed the alarm. It should be remembered, whenever the act of 1844 is criticized, that since it came into force there has been no anxiety as to payment in specie of the note circulation; but the division of the specie held into two parts is an arrangement not without disadvantages. [Sidenote: Bank rate.] Certainly since the act of 1844 became law, the liability to constant fluctuations in the Bank's rate of discount--one main characteristic of the English money market--has greatly increased. To charge the responsibility of the increase in the number of those fluctuations on the Bank Act alone would not be justifiable, but the working of the act appears to have an influence in that direction, as the effect of the act is to cut the specie reserve held by the bank into two parts and to cause the smaller of these parts to receive the whole strain of any demands either for notes or for specie. Meanwhile the demands on the English money market are greater and more continuous than those on any other money market in the world. Of late years the changes in the bank rate have been frequent, and the fluctuations even in ordinary years very severe. From the day when the act came into operation in 1844, to the close of the year 1906, there had been more than 400 changes in the rate. The hopes which Sir Robert Peel expressed in 1844, that after the act came into force commercial crises would cease, have not been realized.

The number of changes in the bank rate from 1876[3] to 1906 in England, France, Germany, Holland and Belgium were as follows:--

England. France. Germany. Holland. Belgium. 183 27 110 55 77

There has been frequent discussion among bankers and occasionally with the government as to the advantage it might be to grant the Bank of England an automatic power to augment the note issue on securities when necessary, similar to that possessed by the Bank of Germany (_Reichsbank_). One of the hindrances to the success of such a plan has been that the government,

## acting on the advice of the treasury, required an extremely high rate of

interest, of which it would reap the advantage, to be paid on the advances made under these conditions. Those who made these suggestions did not bear in mind that the mere fact of so high a rate of interest being demanded intensifies the panic, a high rate being associated as a rule with risks in business. The object of the arrangement made between the _Reichsbank_ and the treasury of the empire of Germany is a different one--to provide the banking accommodation required and to prevent panic, hence a rate of only 5% has been generally charged, though in 1899 the rate was 7% for a short time. As is often the case in business, a moderate rate has been accompanied by higher profit. The duty on the extra issue between 1881, when the circulation of the Bank of Germany first exceeded the authorized limit, and the close of the year 1906 amounted to £839,052. Thus a considerable sum was provided for the relief of taxation, while business proceeded on its normal course. The proposal made by Mr Lowe (afterwards Lord Sherbrooke) in 1873 was to charge 12%, a rate which presupposes panic. Hence the negotiations came to nothing. The act of 1844 remains unaltered. The issue on securities allowed by it to the Bank of England was originally £14,000,000. This has since been increased under the provisions of the act to £18,450,000 (29th March 1901). Hence against the notes issued by the bank less gold by £4,450,000 is now held by the bank than would have been the case had the arrangements as to the securities remained as they were in 1844.

The Bank of England has, from the date of its establishment, possessed a practical, though perhaps not an absolutely legal, monopoly of issuing notes in London. It became gradually surrounded by a circle of private banks, some of considerable power.

[Sidenote: Early English banking.]

The state papers included in F. G. Hilton Price's _Handbook of London Bankers_ (1876) contain some of the earliest records about the establishment of banking in England. The first of these is a petition, printed in the original Italian, to Queen Elizabeth, of Christopher Hagenbuck and his partners in November 1581, representing "that he had found out a method and form in which it will be possible to institute an office into which shall enter every year a very large sum of money without expense to your Majesty," so "that not only your Majesty will be able to be always provided with whatever notable sum of money your Majesty may wish, but by this means your State and people also; and it shall keep the country in abundance and remove the extreme usuries that devour your Majesty and your people." Hagenbuck proposed to explain his plan on condition that he should receive "6% every year of the whole mass of money" received by the office for twenty years. The queen agreed "to grant to the said Christopher and partners 4% for a term of twenty years, and to confirm the said grant under the great seal." The document is signed by Francis Walsingham, but nothing further appears to have come of it. When we compare the date of this document with that of the establishment of the Banco della Piazza di Rialto at Venice, it is not unlikely that the idea of the establishment of a bank was floating in the minds of people connected with business and had become familiar to Hagenbuck from commerce with Venice. Other state papers in 1621 and 1622 and again in 1662 and 1666 contain somewhat similar proposals which however were never carried into practice.

The little _London Directory_, 1677, contains a list of goldsmiths mentioned as keeping "running cashes." Of these firms described in 1677, five houses were carrying on business in 1876. Three of these, or firms immediately descended from them, Child & Co. of Temple Bar, Martin & Co. of Lombard Street (as Martin's Bank, Ltd.), and Hoare & Co. of Fleet Street, are still carrying on business. Barnetts, Hoare & Co. and Willis, Percival & Co. have been absorbed since 1876, the first by Lloyds Bank (1884), the second by the Capital and Counties (1878). Many of the goldsmiths carried on a considerable business. Thus the books of Edward Blackwell, who was an eminent goldsmith and banker in the reign of Charles II., show that the king himself, the queen mother, Henrietta Maria, James, duke of York, the prince of Orange, Samuel Pepys, the East India Company, the Goldsmiths' Company and other city companies did business with him. Sir John Houblon, the first governor of the Bank of England, kept an account with Blackwell, who was, however, ruined by the closing of the exchequer in 1672. But his son married into the family of Sir Francis Child, and his grandsons became partners in Child's Bank.

[v.03 p.0337] Besides the banks in London already mentioned, one in the provinces claims to have been established before the Bank of England. Smiths' of Nottingham, since amalgamated with the Union of London Bank, is stated to have been founded in 1688. Others also claim considerable antiquity. The old Bank of Bristol (Bailey, Cave & Co.) was founded in 1750; the business amalgamated with Prescott & Co., Ltd., of London. The Hull Old Bank (Pease & Co.) dated from 1754; this business also still continues (amalgamated, 1894, with the York Union Banking Co., Ltd., and since with Barclay & Co., Ltd.). The banks of Gurney & Co., established at the end of the 18th century in the eastern counties, have with numerous other banks of similar standing amalgamated with the firm of Barclay & Co., Ltd., of Lombard Street.

The business of banking had been carried on by the goldsmiths of the city, who took deposits from the time of James I. onwards, and thus established "deposit-banking" as early as that reign. This is described in a pamphlet published in 1676, entitled _The Mystery of the New-Fashioned Goldsmiths or Bankers Discovered_, quoted by Adam Anderson in his _History of the Great Commercial Interests of the British Empire_, vol. ii. p. 402. During the Civil War "the goldsmiths or new-fashioned bankers began to receive the rents of gentlemen's estates remitted to town, and to allow them and others who put cash into their hands some interest for it, if it remained but for a single month in their hands, or even a lesser time. This was a great allurement for people to put their money into their hands, which would bear interest till the day they wanted it. And they could also draw it out by £100 or £50, &c., at a time, as they wanted it, with infinitely less trouble than if they had lent it out on either real or personal security. The consequence was that it quickly brought a great quantity of cash into their hands; so that the chief or greatest of them were now enabled to supply Cromwell with money in advance on the revenues as his occasion required, upon great advantage to themselves."

The Bank of England, as stated before, was incorporated by the act of 1694. The position of the other banks at that time was defined by that act and the act of 1697, which declared that no bank, that is, no joint-stock bank, was "to be established within England during the continuance of the Bank of England," and also by the act of 1708, which provided that "during the continuance of the Bank of England, no company or partnership exceeding six persons in England" should "borrow, owe or take up any sum or sums of money on their bills or notes payable on demand or at any less time than six months from the borrowing thereof." This was confirmed by the act of 1800. No change of importance was made till the act of 1826, which prohibited "bank notes under £5," and the second Banking Act of that year which allowed the establishment of co-partnerships of more than six persons, which necessarily were joint-stock companies, beyond 65 m. from London. The act of 1833 allowed the establishment of joint-stock banks within the 65 m. limit, and took away various restrictions of the amounts of notes for less than £50. But the power of issuing notes was not allowed to joint-stock banks within the 65 m. radius.

In the early days in England, issuing notes formed, as Bagehot says in his _Lombard Street_, the introduction to the system of deposit-banking--so much so, that a bank which had not the power of issuing notes could scarcely exist out of London.

[Sidenote: Bank notes.]

Bank notes in England originated in goldsmiths' notes. Goldsmiths received deposits of moneys and gave notes or receipts for such moneys payable on demand. The London bankers continued to give their customers notes or deposit-receipts for the sums left by them until about 1781, when in lieu of such notes they gave them books of cheques. Before the invention of cheque-books, the practice of issuing notes was considered so essentially the main feature of banking, that a prohibition of issue was considered an effectual bar against banking. Accordingly the prohibitory clause in the act of 6 Anne, c. 50, 1707 (in Record edition), which was repeated in the Bank of England Act 1708, 7 Anne, c. 30, § 66 (in Record edition), prohibiting more than six persons from issuing promissory notes, was intended to prevent any bank being formed with more than six partners, and was so understood at the time; and it did have the effect of preventing any joint-stock bank being formed.

The prohibition, as already related, was modified in the year 1826 and removed in 1833. Even then the privilege of limitation of liability was not permitted to any other bank but the Bank of England. The result was that when joint-stock banks were first formed many persons of good means were kept back from becoming shareholders, that is to say partners, in banks. For up to the date of the act of 1862 permitting "limited liability," every shareholder in a joint-stock bank was liable to the extent of the whole of his means (see the article COMPANY). Even as late as 1858 when the Western Bank of Scotland and 1878 when the City of Glasgow Bank failed, very great hardship was inflicted on many persons who had trusted with over confidence to the management of those banks. The failure of the City of Glasgow Bank was the cause of the Companies Act of 1879, passed to enable unlimited companies to adopt limited liability. In limited companies the shareholder who has paid up the nominal amount of his holding is not liable for any further amount, unless the company issues bank notes, in which case the shareholders are liable in the same way as if the company were registered as an unlimited company. The facilities allowed by this act were used by almost every joint-stock bank in the United Kingdom except those banks which were at that date limited by charter or by special act.

[Sidenote: Private banks.]

To return to the early history of banking--thus, as no bank could be formed with more than six partners during the whole of the period from 1694 to 1826 and 1833, the majority of the banks formed throughout England and Wales for more than a century were necessarily small and usually isolated firms. Further, when a partner died, his capital not infrequently went out of the business; then a fresh partner with sufficient means had to be found, constant change was the result, and confidence, "a plant of slow growth," could not thrive, except in those instances when a son or a relation filled the vacancy.

The banks in the country districts had frequently branches in the small market-towns close to them; those in London had never more than one office. These banks were sometimes powerful and generally well managed, a considerable number being established by members of the Society of Friends.

The restriction of partners in private banks to the number of six continued till 1862. By the act of that year they were allowed to be ten. This power, however, did not extend to issuing private banks, which were restricted to six partners as before. The power of increasing bank partnerships to ten has been made but little use of. The difficulties of carrying on business on a large scale by private firms were augmented by certain legal technicalities which practically rendered large private banks impossible in ordinary circumstances. Hence banking business did not begin to assume its present form till almost half-way through the 19th century. The gradual change followed the passing of the acts of 1826-1833, of 1844-1845, of 1862 and of 1879. Incidentally the act of 1844 had an unexpected influence on the constitution of the banking system. After favouring the existence of small banks for many years, it gradually led, as the time arrived when the establishment of large and powerful banks in England and Wales became necessary, to their formation. No new bank of issue whatever was allowed to be established--restrictions were placed on the English issuing banks--private issuing banks with not more than six partners were allowed to remain, to amalgamate with other private issuing banks and to retain their joint issues. The joint-stock banks which possessed issues were also allowed to continue these, but when two joint-stock banks amalgamated, the continuing bank only retained its issue. Also when a private issuing bank was formed into or joined a joint-stock bank, the issue lapsed.

The greater number of the provincial banks in England and Wales had been banks of issue up to 1844. The act of 1844 [v.03 p.0338] restricted their power of issuing notes, which at that date and even subsequently continued to be of importance to them, in such a manner that, as Sir R. H. Inglis Palgrave stated in giving evidence before the committee of the House of Commons at the banking inquiry of 1875, these banks possessed in their issues a property they could use, but were not able to sell. The statistics forming part of Appendix 14 to the report of the select committee of the House of Commons on banks of issue (1875) give interesting information as to the proportion of notes in circulation to the deposits of banks in various districts of the country and at various dates. The statements were supplied by twenty-one banks, some in agricultural districts, some in places where manufactures flourished, some in mixed districts, commercial and agricultural, or industrial and manufacturing. In all of these, the inquiry being carried as far back as 1844, the proportion of the circulation to the banking deposits had greatly diminished in recent years. In several cases the deposits had increased three-fold in the time. In one case it was five times as large, in another nearly seven times, in another nearly twelve and a half times. The proportion of the circulation to the deposits had very largely diminished in that time. In one instance, from being about one-third of the deposits, at which proportion it had remained for five years consecutively, it fell to 9% at the end of the term. In another from being 22% it had diminished to 1½% of the total. In all cases where the detail was given it had diminished greatly.

The Bank Act of 1844 was arranged with the intention of concentrating the note issues on the Bank of England in order to secure the monopoly of that bank as the one issuer in England and Wales. The result was that nearly all the provincial banks in England had by 1906 lost the right of issue. Doubtless all were destined to do so before long, a result by which banking in England and the industries of the country must lose the advantage which the local issues have been to Scotland and Ireland. Had the English country banks been allowed, as the Scottish banks were, to associate together and to retain their issues, powerful banks would many years since have been established throughout England and Wales, and the amalgamations of recent years would have been carried through at a much earlier date, and on terms much more favourable to the public.

[Sidenote: Security of note issue.]

No security was ever required to be given for the local issues in the United Kingdom. The provisions of the acts of 1844-1845 which compel the Irish and Scottish banks to hold specie against the notes issued beyond the legal limit, do not make the coin held a security for them. The legislation of 1879 which made the note issues a first charge, with unlimited liability, on the total assets of the joint-stock banks which accepted the principle of limited liability for the rest of their business, has been the only recognition by the state of the duty to the note-holders of rendering them secure. It has been a real disadvantage to England that this duty has never been sufficiently recognized, and that the provincial note issue, which is a very convenient power for a bank to possess, and incidentally a considerable advantage to its customers, has been swept away without any attempt being made to remedy its deficiencies. There may be objections raised to a note circulation secured by the bonds of the government, but the security of the note issues of the national banks of the United States made against such bonds, has scarcely ever been questioned.

A different policy was followed by Sir Robert Peel in Scotland and in Ireland from that which he established in England. By the acts of 1844-1845 the Scottish and Irish banks were allowed to exceed their authorized issues on holding specie to the amount of the excess, and no restrictions were placed on amalgamations among banks in these countries. In Scotland and in Ireland notes for less than £5 continued to be allowed. The result has been that the ten large banks in Scotland, and six of the nine banks in Ireland, possess the power of issuing notes. The large proportion of local branches in these countries has been greatly assisted by this power.

[Sidenote: Amounts in circulation.]

Originally, besides the Bank of England, nearly all the provincial banks in England and Wales possessed the privilege of issue. These banks continued their operations as previously during the time while the Bank Act was discussed in parliament. When the arrangements which that act created were made public, nine banks, of which eight were private and one was a joint-stock bank, ceased to issue their notes prior to the 12th of October 1844, when the act came into operation. Of these, the Western District Joint-Stock Banking Co. was dissolved, one of the private banks was closed, the remaining seven issued Bank of England notes and were allowed certain privileges for doing this. By the act of 1844 the maximum circulation of the English issuing banks was fixed at the average circulation of the twelve weeks before the 27th of April 1844.

The number of the banks to which the privilege of circulation was then allowed and the amount of notes permitted were, in England:--

207 private banks with an authorized issue of £5,153,417 72 joint-stock banks with an authorized issue of 3,478,230 ------------ £8,631,647

The actual circulation of the country in October 1844 was as follows:--

_Notes in Circulation_.--The monthly return of the circulation ending the 12th of October 1844 (stamps and taxes, 25th October);

_England._ Bank of England £20,228,800 Private banks 4,674,162 Joint-stock banks 3,331,516

_Scotland._ Chartered, private and joint-stock banks 2,987,665

_Ireland._ Bank of Ireland 3,597,850 Private and joint-stock banks 2,456,261 ----------- Total £37,276,254

In May 1907 the number and amounts were reduced to:--

Authorized Issue. Actual Issue. 12 private banks £482,744 £122,536 17 joint-stock banks 1,084,836 437,693

The reason why the actual circulation of these banks is so far below the authorized issue is that under existing circumstances their circulation can only extend over a very limited area. The notes of country banks are now almost unknown except in the immediate neighbourhood of the places where they are issued; though they may all be payable in London, yet there is often considerable difficulty in getting them cashed.

The average circulation in 1906 was as follows:--

Bank of England £28,890,000 Private banks 124,000 Joint-stock banks 429,000 ----------- Total in England £29,443,000 Scotland 7,477,000 Ireland 6,452,000 ----------- Total in United Kingdom £43,372,000

This shows an apparent increase of more than £6,000,000 since 1844. The decrease of the country circulation in England and the increase of the Scottish and Irish circulations may be set off against each other. The increase is mainly in the notes of the Bank of England. In 1844 the number of banking offices in England and Wales was 976, while in 1906 there were more than 5880. Each of these offices must hold some till-money, and of this Bank of England notes almost always form a part. Hence it is probable that a large part of the increase in the circulation of the Bank of England since 1844 is held in the tills of the banks in England and Wales, and that the active note circulation of the United Kingdom is but little larger than it was.

It may be added that the government received from the note circulation for a typical year (ending 5th of April 1904), out of the profits of issue (Bank of England) £184,930, 2s. 2d., and also composition for the duties on the bills and notes of the banks of England and Ireland and of country bankers, £120,768, 18s. 6d.

In 1906 the banking business of England was carried on practically by about ten private and sixty joint-stock banks of which more than one was properly a private firm under a joint-stock form of organization. Though the number of individual banks had diminished, the offices had greatly increased.

The records of the numbers of banks in the United Kingdom have up to quite recent years been very imperfect. Such as exist were made by individual observers. The banks of England and Wales are believed to have been 350 in number in 1792. Those registered from 1826 to 1842 were:--

[v.03 p.0339] /* Private. Joint-stock. 1826 554 ... 1827 465 6 1833 416 35 1842 311 118 */

The number of banking offices in England and Wales was estimated by Mr. William Leatham in 1840 as being 697. The _Banking Almanac_ for 1845 gives the number in 1844 for England and Wales as 336 private bank offices and 640 joint-stock offices, Scotland 368 offices, Ireland 180 offices.

The number of inhabitants to each office was as follows in 1844 and 1906:--

+-------------------+-------------+----------------+ | | Number of | Number of | | | Banking | Inhabitants to | | | Offices. | Each Office. | +-------------------+------+------+---------+------+ | | 1844.| 1906.| 1844. | 1906.| | England and Wales | 976 | 5527 | 16,305 | 5885 | | Isle of Man | ... | 23 | ... | 2417 | | Scotland | 368 | 1180 | 7,120 | 3790 | | Ireland | 180 | 777 | 45,417 | 5738 | +-------------------+------+------+---------+------+ | In United Kingdom | 1524 | 7507 | 17,526 | 5530 | +-------------------+------+------+---------+------+

In the latter years of the 18th century and the early years of the 19th, the note circulation was a very important part of the business, but about that date the deposits began to be, as they have continued since, far more important. It is unfortunately impossible to give any trustworthy statistics of the position of banking in the United Kingdom extending back for more than forty or fifty years. Even the Scottish banks, who have been less reticent as to their position than the English banks, did not publish their accounts generally till 1865. The figures of the total deposits and cash balances in the Irish joint-stock banks were published collectively from the year 1840 by the care of Dr Neilson Hancock, but it is only of quite recent years that any statement of the general position other than an estimate has been possible owing to the long-continued reluctance of many banks to allow any publication of their balance-sheets. A paper by W. Newmarch, printed in the _Journal of the Statistical Society_ for 1851, supplies the earliest basis for a trustworthy estimate. According to this the total amount of deposits, including the Bank of England, in England and Wales, Scotland and Ireland, may have been at that date from £250,000,000 to £360,000,000. The estimate in Palgrave's _Notes on Banking_ (1872), excluding deposits in discount houses and the capitals of banks, was from £430,000,000 to £450,000,000. The corresponding amounts at the close of 1906 were, in round figures, including acceptances &c., £997,000,000. The total resources, including capitals and reserves and note circulation (in round figures £177,500,000), were for 1906:--

England and Wales-- Bank of England and other banks £922,297,000 Scotland 135,042,000 Ireland 73,707,000 Isle of Man 898,000 ------------- £1,131,944,000

The progressive growth in bank deposits since it has been possible to keep a record of their amounts, affords some means of checking roughly the correctness of the estimates of 1851 and 1872. Broadly speaking, it may be said that the bank deposits of the United Kingdom have about doubled since 1872.

[Sidenote: Clearing.]

The purely city banks had associated themselves in a "Clearing House" certainly by 1776. An entry in the books of the Grasshopper,[4] namely--"1773 to quarterly charge for use of the Clearing-room of 19/6d.," points to an earlier and perhaps less definitely organized system of settlement. A house was taken for the purpose in 1810, in which year the number of banking houses who settled their accounts with each other at the "Clearing House" was forty-six (Gilbart's _History and Principles of Banking_, p. 78). The Bank of England has never been a member of the Clearing House, though it "clears on one side," _i.e._ its claim on the clearing bankers is made through the Clearing House, but the claims of the clearing bankers on the bank are forwarded direct to Threadneedle Street twice or thrice daily. Nor did the banks in Fleet Street or at Charing Cross belong to it. In 1858 the clearing of country cheques was added through arrangements made by Lord Avebury, then Sir John Lubbock. The "country clearing" is a great assistance to business, as it enables a cheque drawn on the most distant village in England to be dealt with as conveniently as a cheque on London. Of the forty-nine banks in London in 1844, twenty-six were connected with the Clearing House. At that time only private banks were allowed to be members. In 1854 the joint-stock banks made their way into that body, and in 1906 the numbers were one private bank and eighteen joint-stock banks who joined in the clearing--nineteen banks in all.

Practically at the present time every large transaction in the United Kingdom is settled by cheque, that is, by a series of ledger transfers, notes and specie being but the small change by which the fractional amounts are paid. A large proportion of these transactions are arranged through the operation of the London Clearing House. This is facilitated by the fact that every bank in the United Kingdom has an agent in London.

The annual circulation shown by the London Clearing House is more than £12,000,000,000. No one asks what stock of gold is held by the bank on which the cheques are drawn, or what the bank itself keeps in reserve. The whole is taken in faith on a well-founded trust. It is the most easily worked paper circulation and circulating medium in existence. Like the marvellous tent of the fairy Paribanou, it expands itself to meet every want and contracts again the moment the strain is passed. (See the article by R. H. Inglis Palgrave on "Gold and the Banks," _Quarterly Review_, January 1906.)

If we add to the returns of the London Clearing House those of the clearing houses in the large towns of England, Ireland and Scotland, and the numerous exchanges which occur daily, and the large number which the different offices of banks with a great many branches settle among themselves, and the number drawn by one customer of a bank and paid to another, we may form some notion of the vast amount of the yearly turnover in cheques. This may be roughly estimated to be at least twice as great as that registered by the London Clearing House. The earliest authentic statement as to the clearing is found in the _Appendix to the Second Report, Committee of House of Commons, Banks of Issue_ (1841).

In 1839 the figures of the London clearings were £954,401,600, 29 banks. In 1840 " " " " " 978,496,800, 29 " In 1899 " " " " " 9,150,269,000, 19 " In 1900 " " " " " 8,960,170,000, 19 " In 1906 " " " " " 12,711,334,000, 18 "

[Sidenote: Scottish banks.]

In 1695, shortly after the establishment of the Bank of England, the Scottish parliament passed an act for the establishment of a public bank. Amongst the first names is that of Thomas Coutts, a name still commemorated in one of the most substantial banks in London. The terms of the establishment were more favourable than those connected with the establishment of the Bank of England, for they obtained the exclusive privilege of banking for twenty-one years without giving any consideration whatever. It may have been the natural caution of the country, or the fact that William III. was then king, which led to the Bank of Scotland being prohibited under a heavy penalty from lending money under any circumstances to the king. It is the only Scottish bank established by act of parliament. The directors began at a very early period to receive deposits and to allow interest thereon, also to grant cash credit accounts, a minute of the directors respecting the mode of keeping the latter being dated so far back as 1729.

Though the system of branches forms now so marked a feature of banking in Scotland, a good many years had to pass before they obtained any hold. It was not till about the year 1700 that the directors of the Bank of Scotland established branches at Glasgow, Aberdeen, Dundee and Montrose, but so little encouragement was given to these branches, the expenses far exceeding the profits arising from them, that the directors resolved to close them. In 1731 another attempt was made, and agencies were established at Glasgow, Aberdeen and Dundee. But after a trial of two years they were discontinued. It was not till 1774 that branches were again established by the bank.

Soon after the establishment of the Bank of Scotland the directors began to issue notes, or, as they were then called, bills or tickets, for £100, £50, £20, £10, and £5. In 1704 £1 notes were issued for the first time. In 1727 the Royal Bank of Scotland was established by a charter of incorporation,--which granted them "perpetual succession and a common seal." There was a great rivalry between the two companies. The British Linen Company was incorporated in 1746 for the [v.03 p.0340] purpose of undertaking the manufacture of linen, but by 1763 they found it best to confine their operations to banking transactions. This bank also was incorporated by charter.

The note circulation was always an important item in the Scottish banks. Thus in the case of the Bank of Dundee, the receiving money from the public did not commence till 1792. Up to that time the whole business of the bank from 1764 onwards, twenty-eight years in all, had consisted in its issue of notes, which had varied from about £23,000 to £56,000. The Bank of Dundee was amalgamated with the Royal Bank of Scotland in 1864, when its deposits amounted in round figures to £700,000 and its note circulation to £41,000. After 1792, the money deposited with the banks in Scotland rapidly increased, but the habit of hoarding savings in a chest up to amounts of £10 or £20 continued to a much later period (_History of the Dundee Banking Co._).

Private banking never appears to have had any considerable hold in Scotland. In 1819 eight private banks were in existence. These had all disappeared by 1844. In 1906 there were only ten banks of issue in Scotland, which practically carried on the whole business of the country. There were two other small banks established comparatively recently. These ten banks had, in 1906, 1180 branches.

The history of the growth and expansion of Scottish banking since 1826 is, as far as can be traced, as follows:--

+------+---------------+----------------------------------------+ | Date.| Deposits. | Number of Offices. | +------+---------------+----------------------------------------+ | 1826 | £21,000,000 | 167 = 1 to every 13,170 inhabitants. | | | | | | 1841 | 27,000,000 | 380 = 1 to every 6,600 inhabitants. | | | | | | 1856 | 63,000,000 | 585 = 1 to every 5,230 inhabitants. | | | and capital | | | | | | | 1872 | 92,000,000 | 790 = 1 to every 4,250 inhabitants. | | | including all | | | | liabilities | | | | and capital | | | | | | | 1906 | 135,042,000 | 1,180 = 1 to every 3,790 inhabitants. | | | including all | | | | liabilities | | | | and capital | | +------+---------------+----------------------------------------+

Against every note issued in excess of the limit allowed by the acts of 1844-1845, gold has to be held at the offices of the issuing banks in Scotland and Ireland. The amount of the specie to be thus held was, as explained by Sir Robert Peel in his speech of the 25th of April 1845, to be ascertained by the average amount of the note-issue for four weeks preceding. The object of the holding of this amount of specie by the bank which issued the notes was designed by Sir Robert Peel to cause the circulating medium of the country, being partly of notes and partly of specie, to fluctuate in the same manner as if it had been a metallic circulation only. The specie held in Scotland and Ireland against the note-issue is not a special security for the note circulation, but is placed in the banks there for this purpose. The influence ascribed to the working of the note circulation in the earlier part of the 19th century accounts for this legislation, which, as Sir Robert Peel stated in his speech of the 6th of May 1844, was intended to "ensure the uniform equivalency of bank notes to coin." It is not applicable to the present position of the circulating medium of the United Kingdom, which now consists mainly of a circulation of cheques. This differs absolutely from what was contemplated by Sir Robert Peel; no attempt is or can be made to cause such a paper circulation to fluctuate as if it were one of specie only. One result of the limitation of the power of note-issue to the banks in Scotland which possessed that power in 1845 has been that no important bank has been established in that country since. Notes are so largely employed in ordinary business in Scotland that a bank which does not possess the power, practically cannot carry on business and supply the needs of its customers. This limitation in the number of the banks has, however, not been accompanied by any deficiency in the supply of banking accommodation to the people. There is a larger number of banking offices in proportion to the population in Scotland than in England and Wales or Ireland.

The large number of branches must, however, be a cause of great expense, and in several other respects it is obvious that a business carried on in such thinly peopled districts as are found in many parts of Scotland, must be conducted at a disadvantage in comparison with those banks which deal with more active centres of commerce. Although the profit derived from their large issue of notes may be thought to be considerable, yet, when we consider the many expenses incurred in conducting a large note circulation, the cost of printing, stamp duty, and the charges on importing gold from London when the circulation exceeds the limit fixed by the act of 1845. no small deductions must be made from the apparent profit to be derived from this head, if there is any direct profit at all.

On the other hand, the great number of branches possessed by the Scottish banks tends beyond doubt to their stability and prosperity. The network of banks on the surface of Scotland is as important to the development of the prosperity of the country as the network of the railways. It has caused a great economy of capital, as the universal practice of people, even of the most moderate means, is to lodge their money with the banks.

[Sidenote: Irish banks.]

The early history of banking in Ireland was marked by legislation even less favourable to the formation of a steady and dependable system than in England, and in 1695 several of the principal merchants in Dublin met together for the purpose of forming a public bank for Ireland on the model of the Bank of England. For many years this proposal met with no favour. It was not till 1783 that the Bank of Ireland was established and commenced its business. The first governor was David La Touche, junior, and two other members of his family were amongst the first board of directors. The bank met with very great success, but the jealousy against rival establishments was extreme. By the act forming the Bank of Ireland it was enacted that no company or society exceeding six in number, except the Bank of Ireland, should borrow or take up money on their bills or notes payable on demand. In the year 1821 the act was so far modified as to permit the establishment of banking companies exceeding six in number at a distance of 50 m. from Dublin. In 1824, in consequence of the ambiguity of that act, an act had to be passed to explain it. It was not till 1845 that the restriction as to the 50-m. limit was withdrawn.

The establishment of any other bank but the Bank of Ireland was for a long time hindered by the legislation on the subject. Some of the restrictions were so extraordinary that it will be interesting to refer to three of the more important acts.

1741, 15 Geo. II.--Partnerships authorized for the purpose of trade and manufacture; but such partnerships were not to exceed nine in number, nor was the capital stock of such co-partnership to exceed, at any time, the sum of £10,000.

1780-1781, 21 and 22 Geo. III.--"Anonymous Partnership Act,"--limited liability not to exceed £50,000, but "business of banking or discounters of money" expressly excluded.

1759, 33 Geo. II.--By this act a person while he continued a banker could not make a marriage settlement on a son or daughter, a grandson or granddaughter, so as to be good against his creditors, though for a valuable consideration, and though such creditors were not creditors at the time the grant was made. This act gave power to creditors over all conveyances by bankers affecting real estates; and all dispositions after the 10th of May 1760 by bankers of real or leasehold interest therein to or for children were made void as against creditors, though for valuable consideration and though not creditors at the time. No banker to issue notes or receipts bearing interest after the 10th of May 1760. Some of these enactments appear to be in force at the present day; suggestions have been made, though apparently unsuccessfully, for their repeal.

So extraordinary were the views of the common people that a banker in Dublin of the name of Beresford having made himself very unpopular, a "large assemblage of ignorant country people having previously collected a quantity of Beresford's notes, publicly burnt them, crying out with enthusiasm while the promises to pay on demand were consuming, 'What will he do now; his bank will surely break.'"

The number of banks which failed in Ireland in earlier times was extraordinary; thus Sir Robert Peel in his speech of the 9th of June 1845 on the Bank Act of that year, made a quotation "from the report of the committee of Irish exchanges, which sat in 1804. At that period there were fifty registered banks, but they all failed, and their failures, I know personally, led to the most fearful distress." Since the legislation of 1845, however, the business has been carried on with equally extraordinary steadiness and success, and at the present time is on a footing fully equal to that of any other part of the United Kingdom.

The earlier history of banking in Ireland pursued very closely the same process of development as in England. Circulation preceded and fed deposits. The credit which the banks obtained [v.03 p.0341] by the ready acceptance of their notes brought customers to their counters, and thus the existing system, fortunate in excellent managers, was built up gradually and surely.

Alone in the three kingdoms, Ireland maintains the same limit of authorized circulation as that established by Peel's Act of 1845. Not one of the six banks which had the privilege of issue at that period has lost it since.

The names of the banks carrying on business in Ireland, the years when they were established and their position in 1906, are as follows:--

CAPITAL OF IRISH JOINT-STOCK BANKS IN 1906 +---------------------------+------------+------------+ | | | Rate of | | Name of Bank and Year | Capital | Dividend | | when established. | paid-up. | per annum. | +---------------------------+------------+------------+ | Bank of Ireland 1783 | £2,769,230 | 11 | | Hibernian Bank* 1824 | 500,000 | 10 | | Provincial Bank 1825 | 540,000 | 20 | | Northern Banking Co. 1825 | 500,000 | 18½ | | Belfast Banking Co. 1827 | 500,000 | 36 | | National Bank 1835 | 1,500,000 | 8 | | Ulster Banking Co. 1836 | 500,000 | 18 | | Royal Bank* 1836 | 300,000 | 12 | | Munster Bank, Ltd.* 1864 | 200,000 | 8 | +---------------------------+------------+------------+ * Thus marked are not banks of issue.

[Sidenote: Banking crises]

Banking, like every other business, has to pass through periods of difficulty. The severity of these in the case of banking is intensified by the vast number of interests affected. These, on the one hand, are world-wide in their scope, on the other they touch every home in the country. The stringency of such a time in England has since the passing of the act of 1844 been greatly enhanced by a doubt being sometimes felt as to whether a relaxation of the act of 1844 would be allowed. In any case, some little time must elapse before the assent of the ministers of the crown to the request of the Bank of England can be known. Since 1844 there have been five periods of pressure,--during 1847, 1857, 1866, 1870 and 1890. Of these in three, 1847, 1857 and 1866, the difficulties reached panic.

The crisis of 1847 was brought on by the speculation in railway enterprise which had gone on since 1845. So little had the anxieties of the autumn been anticipated that the bank rate of discount was 3% on the 1st of January. It was raised to 3½% on the 14th and to 4% on the 21st. It became 5% on 8th April, 5½% on 5th August, 6% on 30th September and 8% on 25th October. This was the highest. It was lowered to 7% on 22nd November, on 2nd December to 6% and on 23rd December to 5%. An announcement was made on the 1st of October that no advances would be made on public securities. This was followed by general anxiety and alarm.

The reserve of the bank was rapidly reduced to a very low ebb.

_Bank of England Reserve of Specie._ 1847, 16th October .... £3,070,000 " 23rd October .... 1,990,000 " 30th October .... 1,600,000

Meanwhile the anxiety and alarm prevailing were causing a general hoarding of coin and bank notes, and it really appeared not unlikely that the banking department of the Bank of England might be compelled to stop payment while there was more than £6,000,000 of specie in the issue department. The chancellor of the exchequer (Sir C. Wood, afterwards Lord Halifax) was urged by many deputations and remonstrances to relax the Bank Act, but he declined. At last, on the 22nd or 23rd of October, some of the leading city bankers had an interview with the prime minister (Lord John, afterwards Earl, Russell), and on their explaining the necessities of the position, the desired relaxation was given. The official letter (25th October) recommended "the directors of the Bank of England, in the present emergency, to enlarge the amount of their discounts and advances upon approved security." A high rate, 8%, was to be charged to keep these operations within reasonable limits; a bill of indemnity was promised if the arrangement led to a breach of the law. The extra profit derived was to be for the benefit of the public. The effect of the government letter in allaying the panic was complete.

The crisis of 1857 was the last occasion of an official inquiry. This is contained in the _Report and Evidence of the Select Committee of the House of Commons on the Bank Acts_ (1857, 1858). The evidence given by Mr Sheffield Neave, the governor, and Mr Bonamy Dobree, deputy-governor of the bank in 1858, gives a vivid picture not only of what occurred, but of what might be expected to recur on such occasions. The wildest alarm prevailed, exchequer bills were scarcely saleable, and the bank itself sold £3,000,000 government securities at a considerable loss.

The extreme pressure was relaxed by the letter issued by the government on the 12th of November 1857, signed by Lord Palmerston, then premier, and Sir G. C. Lewis, which allowed a temporary relaxation of the Bank Act of 1844. The public alarm, however, was so great that it was not until the 21st of November that the severity of the pressure was in any way diminished. On the 20th of November the notes issued to the public on securities beyond the statutory limit (then £14,475,000) reached the sum of £928,000. By the next week the issue was almost down to the limit, and in the week following it was within the limit. On the 1st of January 1858 the bank rate was lowered to 8% and the anxiety gradually passed away. Had the treasury letter been issued earlier, the pressure might not have been so severe, and the governor of the bank expressed a strong opinion that, if it had been later, it would not have been sufficient. November 1857 was the only occasion when the limits of the Bank Act as to issue were actually passed.

During the crisis of May 1866 £4,000,000 left the bank on one day in notes and coin, and the reserve of the bank was reduced in the return of the 1st of June of that year to £415,000. The bank rate was raised to 10% and permission was given by the government to suspend the act. This, however, was not done. Tradition says that the bank asked the bankers, during the period of heaviest pressure of that terrible crisis--pressure more severe than anything that had taken place before or that has occurred since, to pay in every night the notes they had drawn out in the morning which were still in their tills at the close of the day, and that hence the legal limit was never exceeded. But it was not till the 6th of August that the rate was reduced to 8%.

The effect of the crisis of October 1890 was far less severe. This was due to the judgment and skill displayed by the governor (Mr Lidderdale) and the directors of the bank, who imported £3,000,000 in gold from Paris. The reserve in that year never dropped below £10,000,000, and before the end of November the anxiety had greatly passed away. "Caution prevailed, but not panic, and the distinction is a very clear one." (See arts. on "Crises," _Dictionary of Political Economy_, vol. i.)

The most important requirement of banking in the United Kingdom is still the establishment of an efficient specie reserve. The reserve in the banking department of the Bank of England averaged:--

£8,500,000 in 1845. £11,600,000 in 1875. 8,400,000 in 1855. 15,100,000 in 1885. 8,000,000 in 1865. 29,900,000 in 1895. £23,500,000 in 1906.

[Sidenote: The "Reserve" question.]

This provides but a narrow basis for the whole business requirements of the country. Though much larger than in several previous years, it cannot be regarded as adequate. The figures fluctuate more severely than these decennial averages show, and the progress has not been one of uniform increase. Thus the £15,100,000 in 1885 was followed by £12,700,000 in 1888. The £29,900,000 of 1895 was followed by £34,600,000 in 1896 and £21,200,000 in 1899.

Beyond, or side by side with, the reserve of the Bank of England there are the reserves held by the other banks. Part of these are held in the form of balances at the Bank of England, part in specie and bank notes in their own tills. The latter, hence, are not unlikely to be estimated twice over. The published figures on this point are meagre.

The expectations expressed by Sir Robert Peel in his speech [v.03 p.0342] on the bank charter and the currency of the 6th of May 1844 have not yet been fulfilled. "I rejoice," he said, "on public grounds, in the hope that the wisdom of parliament will at length devise measures which shall inspire just confidence in the medium of exchange, shall put a check on improvident speculations, and shall ensure the just reward of industry and the legitimate profit of commercial enterprise conducted with integrity and controlled by provident calculation."

The extreme measures which have been required since the act af 1844 point out for themselves the necessity for reform. Three times since the date of the Bank Act of 1844 it has been needful to give permission for the suspension of that act which forms the very foundation of the monetary system of Great Britain. This, whenever it has occurred, has exercised a very injurious effect on credit abroad, as well as on prosperity at home.

The British money-market, the clearing-house of the world, is, in consequence of the smallness of its reserve, exposed to greater fluctuations than that of any other country. These fluctuations may arise from the need of meeting the requirements of other countries for specie or those arising from domestic trade. The recorded excess of imports over exports, £147,000,000 in 1906, though the difference is eventually balanced by the "invisible" exports, gives foreign nations at times a power over the British money-market greater than has ever previously been the case. The current must always have a tendency to flow outwards; this is enhanced by the great increase in the number of foreign banks which have branches in England. The need of providing sufficient reserves to meet requirements thus occasioned is obvious.

[Sidenote: British banking abroad.]

As regards the banks in which British interests are concerned in British colonies and other countries we can only speak briefly. It must not be overlooked that in the Dominion of Canada there are 29 banks, many of them large, managed much on the Scottish principle with capitals of nearly £19,000,000 and deposits of about £140,000,000. These banks have more than 1200 offices. In Australia and New Zealand there are 24 banks with capitals of nearly £18,000,000 and deposits of about £130,000,000. The number of offices is nearly 1700. There are, including the three Presidency banks, about 15 banks doing business mainly in India--in some cases connecting neighbouring countries and places like Bangkok, Hong-Kong and Zanzibar. These banks have capitals of more than £5,000,000 and deposits of fully £36,000,000 and over 210 offices. There are at least 8 banks in South and West Africa with capitals of nearly £5,000,000, deposits of nearly £50,000,000 and nearly 370 offices. There are 5 banks, including the Colonial Bank, in other British territories with capitals of about £1,000,000 and deposits of £3,300,000, and about 25 offices. There are thus, besides many private firms doing very considerable business, more than 80 joint-stock British banks working in the colonies with capitals amounting to £48,000,000, deposits £360,000,000 and offices 3505. Outside British territories there are 6 banks, principally in South America, with nearly £4,000,000 capital, £36,000,000 deposits and about 60 offices. There are 6 large banks doing business principally in the East with more than £6,700,000 capitals, £77,000,000 deposits and 106 offices: and 7 other banks, including Barings, with about £4,500,000 capitals and £22,000,000 deposits There are thus about 20 British banks doing business in foreign countries with capitals amounting to £15,200,000, deposits £135,000,000 and offices 173.

In this statement we have included only the more important banks, which collectively wield about £63,000,000 capital and more than £495,000,000 deposits--in all about £560,000,000 of resources operating at about 3700 offices situated in places as different from each other and as widely separated as California and Hong-Kong, Constantinople and New Zealand.

_France_.--In France the first bank of issue, originally called the _Banque Générale_, was established in 1716 by John Law, the author of the _Mississippi Scheme_ and the _Système_. Law's bank, which had been converted into the _Banque Royale_ in 1718, and its notes guaranteed by the king (Louis XV.), came to an end in 1721; an attempt at reconstruction was made in 1767, but the bank thus established was suppressed in 1793. Other banks, some issuing notes, then carried on operations with limited success, but these never attained any real power. There were many negotiations on the subject of the establishment of a bank in 1796. The financial difficulties of the times prevented any immediate result, but the advice of those engaged in this plan was of great assistance to Napoleon I., who, aided by his minister Mollien, founded in 1800 the Bank of France, which has remained from that time to the present by far the most powerful financial institution in the country. The objects for which it was established were to support the trade and industry of France and to supply the use of loanable capital at a moderate charge. These functions it has exercised ever since with great vigour and great judgment, extending itself through its branches and towns attached to branches over the whole country. At its establishment and for some time subsequently the operations of the bank did not extend over the whole of France. Departmental banks with the privilege of issue had been formed under a law adopted in 1803. At the close of 1847 there were nine of these banks existing in as many of the larger towns. In 1848, however, they were absorbed into the Bank of France, which has since possessed an exclusive privilege of issue, and in 1863 took over the Bank of Savoy after that province was united to France.

The Bank of France has successfully surmounted many political as well as financial troubles both during and since the times of Napoleon I. The overthrow of the government of Louis Philippe in 1848, the war with Germany in 1870, the many difficulties that followed when the Commune reigned in Paris in 1871, the payment of the war indemnity--not completed till 1873--were all happily overcome. Great pains, too, have been taken, especially of recent years, to render services to large and small businesses and to agricultural industry. In 1877 the offices of the Bank of France were 78 in number; in 1906 they were 447, including the towns "connected with the branches"--an arrangement which, without putting the bank to the expense of opening a branch, gives the place connected many of the advantages which a branch confers. The quantity of commercial paper discounted is very large. More than 20,000,000 bills were discounted in 1906, the total amount being £559,234,996. The advances on securities were in the same year £106,280,124. The rate of discount in Paris is as a rule lower and the number of alterations fewer than in London. From May 1900 to January 1906 there was no change, the rate remaining uniformly at 3%. Bills as low as 4s. 2d. are admitted to discount, including those below 8s.; about 232,000 of this class were discounted in 1906. Since the 27th of March 1890 loans of as small an amount as £10 are granted. In most cases three "names" must be furnished for each bill, or suitable guarantees or security given, but these necessary safeguards have not to be furnished in such a manner as to hamper applicants for loans unduly. In this manner the Bank of France is of great service to the industry of the country. It has never succeeded, however, in attracting deposits on anything like the scale of the Bank of England or the banks of the English-speaking peoples, but it held, as stated in the balance-sheet for the 23rd of December 1906, about £35,000,000 in deposits, of which £14,000,000 was on account of the treasury and £21,000,000 for individuals, and the amount held in this manner gradually increases. The report for 1904 says "each year the movement in these increases, and this economical and safe mode of effecting receipts and payments is more and more appreciated by the public." In one respect the Bank of France stands at a great advantage in connexion with this branch of its business. The average amount held in this manner for individuals during 1906 was about £23,000,000. As the accounts numbered 77,159 the average for each account was comparatively small. Accounts so subdivided give a great probability of permanence. The figures of the accounts for 1904 were as follows:--

11,178 current accounts, with power of discount. 4,576 simple current accounts. 26,709 current accounts, with advances. 24,106 accounts, deposits.

Total 66,569 accounts, against 59,182 at the end of 1903.

At the present time the Bank of France operates chiefly through its enormous note circulation (averaging in 1906 £186,300,000), by means of which most business transactions in France are carried on.

The limits of the circulation of the Bank of France and the dates when it has been extended are as follows:--

+--------------------------+-------------+-------------------+ | Dates | Millions of | Converting the | | | Francs | Franc as 25 = £1. | +--------------------------+-------------+-------------------+ | 15th March 1848 | 350 | £14,000,000 | | 27th April, 2nd May 1848 | 452 | 18,000,000 | | 2nd December 1849 | 525 | 21,000,000 | | 12th August 1870 | 1800 | 32,000,000 | | 14th August 1870 | 2400 | 96,000,000 | | 29th December 1871 | 2800 | 112,000,000 | | 15th July 1872 | 3200 | 128,000,000 | | 30th January 1884 | 3500 | 140,000,000 | | 25th January 1893 | 4000 | 160,000,000 | | 17th December 1897 | 5000 | 200,000,000 | | In 1906 | 5800 | 232,000,000 | +--------------------------+-------------+-------------------+

[v.03 p.0343] Most business transactions in France are liquidated, not in cheques as in England, but in notes of the Bank of France. These, owing to their convenience, are preferred to specie. This is accumulated in the vaults of the Bank of France, which in 1906 held on average £115,000,000 gold and £42,000,000 silver. The gold held by the Bank of France is generally considerably larger in amount than that held by the Bank of England, which in the autumn of 1890 had to borrow £3,000,000 in gold from the Bank of France at the time of the Baring crisis. The large specie reserve of the bank has given stability to the trade of France, and has enabled the bank to manage its business without the numerous fluctuations in the rate of discount which are constantly occurring in England. It is true that the holding this very large amount of specie imposes a very heavy burden on the shoulders of the shareholders of the bank, but they do not complain. The advantage to business from the low rate of interest which has to be paid for the use of borrowed capital in France is a great advantage to the trade and industry of that country.

The mass of the reserve in France is so great that the movements of the precious metals, when they are the result only of natural causes, are allowed to go on without corresponding movements in the discount rate. But it must be remembered that this large reserve is held in part against a gigantic note issue, and also that the trade activity and enterprise of the French people are less intense than in either the United Kingdom or Germany; thus it is much easier for the Bank of France to maintain a steady rate of discount.

Besides the Bank of France, several great credit institutions carry on business in the country; as the _Banque de Paris et des Pays-Bas_ (capital and reserve, £3,729,000; other liabilities, deposits, &c., £14,842,000), the _Banque Française pour le Commerce et l'Industrie_ (£2,450,000; and £3,505,000), the _Crédit Lyonnais_ (£14,000,000; and £82,570,000), the _Comptoir National d'Escompte de Paris_ (£6,772,000; and £47,593,000), the _Société Générale pour favoriser le développement du Commerce et de l'Industrie en France_ (£7,469,000; and £45,800,000), and the _Société Générale de Crédit Industriel et Commercial_ (£1,600,000; and £10,060,000).

There is also the _Crédit Foncier de France_ with a very considerable capital, but the business done is so largely that of mortgages that it can hardly be included among banks, though it carries on in some measure the business of banking.

Besides the six important joint-stock banks mentioned above, there exists in France a large number of banks, principally in the provinces, carrying on a very considerable business. Little is known as to their deposits, but their business appears to be conducted with great prudence and discretion. One hundred and eighty-two of these firms were members of the French Country Bankers' Association in 1898. They carry on business in 66 out of the 86 departments into which France is divided. More than one of these banks has several offices--one possessing 18, including the head office. These branches are situated in the small towns in the vicinity. In this the business follows more the English method of small branches. The French Country Bankers' Association holds its meetings in Paris, where matters of interest to bankers are discussed. (See _Bankers' Magazine_, July 1898.)

_Germany_.--Besides the Imperial Bank of Germany, the "Reichsbank," there are about 140 banks doing business in the states which form the German empire. These credit and industrial banks with their large resources have had an immense influence in bringing about the astonishing industrial development of their country. Five banks possess the right of uncovered note-issue; these are:--

The Imperial Bank of Germany with right of issue £23,641,450 The Bank of Saxony " " " 838,500 The Bank of Bavaria " " " 1,600,000 The Bank of Württemberg " " " 500,000 The Bank of Baden " " " 500,000 ----------- £27,079,950

At the Bank of Germany the coin and bullion held is sometimes larger than at the Bank of England. The statement of the specie in the weekly accounts includes silver. The amounts held in gold and silver are only separated once a year, when the balance-sheet is published. The figures of the balance-sheet for the 31st of December 1906 showed in round numbers £24,000,000 gold and £9,000,000 silver. As far as the capital is concerned the £18,000,000 of the Bank of England considerably exceeds the £9,000,000 of the Bank of France and the £12,200,000 of the Bank of Germany. The note circulation of both the other banks is considerably larger than that of the Bank of England, that of the Bank of France being £186,300,000, and of the Imperial Bank of Germany £69,000,000 in 1906.

The capitals and reserves of the German banks, including those of banks established to do business in other countries, as South America and the Far East, and of the Bank of Germany, are about £133,000,000, with further resources, including deposits, notes and mortgage bonds, amounting to fully £414,000,000. The amount of the capital compares very closely with that of the capitals of the banks of the United Kingdom. The deposits are increasing. The deposits, however, are not the whole of the resources of the German banks. The banks make use, besides, of their acceptances in a manner which is not practised by the banks of other countries, and the average note circulation of the Reichsbank, included in the statement given above, is between £60,000,000 and £70,000,000.

A large and apparently increasing proportion of the resources of the German banks is employed in industrial concerns, some of which are beyond the boundaries of the empire. The dangers of this practice have called forth many criticisms in Germany, among which may be quoted the remarks of Caesar Strauss and of Dr R. Koch, the president of the Reichsbank. Dr Koch especially points out the need of the development of powerful banks in Germany unconnected with speculative business of this kind. The object of employing their funds thus is the higher rate of interest to be obtained from these investments than from discounting bills or making loans at home. But such an employment of the resources of a bank is opposed to all regular rules of business and of banking tradition, which abstains from making fixed investments of any large part of the resources of a bank. On the other hand, Dr Koch observes that the risks of the one "reserve system" mentioned by Bagehot are not to be feared in Germany.[5] The recent movement in favour of concentration among the banks has been described by Dr E. Depitre and Dr Riesser, who give particulars of the business done by these banks, which does not correspond with banking as practised in the United Kingdom, being more of an industrial character.

There are also many private banking firms in Germany which do a considerable amount of business.

The Reichsbank, by far the most powerful banking institution in Germany, is managed by the bank directory appointed by the chancellor of the empire. The shareholders join in the management through a committee, of which each member must be qualified by holding not less than three shares. The government exercises complete powers of control through the chancellor of the empire. The influence of the Imperial Bank now permeates, by means of its branches, all the separate kingdoms of the empire--the uniformity of coinage introduced through the laws of 1871-1873 rendering this possible. The Imperial Bank assists business principally in two ways--first, through the clearing system (_Giro-Verkehr_), which it has greatly developed, and secondly, through the facilities given to business by its note circulation. The Imperial Bank also receives deposits, and cheques are drawn against these, but in Germany notes are principally used in payments for ordinary business.

Before the Reichsbank was established, Hamburg was the first, and for a long time the only, example of a clearing in Germany. This was taken up by the Reichsbank when it established its office in Hamburg in the time-honoured building which had belonged to the Hamburg Clearing House. Similar business had long been undertaken by the Bank of Prussia. This was absorbed and developed by the Reichsbank in 1876. Through the "clearing system" money can be remitted from any of the 443 places in which there is an office of the Reichsbank, to any of these places, without charge either to the sender or the receiver. It is sufficient that the person to whom the money is to be remitted should have an account at the bank. Any person owing him money in the remotest parts of the empire may go to the office of the bank which is most convenient to him and pay in the amount of his debt, which is credited on the following day at the office of the bank, without charge, to the account of his creditor wherever he may reside. The person who makes the payment need not have any account with the bank. The impetus given to business by this arrangement has been very considerable. It practically amounts to a money-order system without charge or risk of loss in transmission. From Hamburg and Bremen to the frontiers of Russia, from the shores of the Baltic to the frontiers of Switzerland, the whole of the empire of Germany has thus become for monetary purposes one country only. The amount of these transfers for the year 1906 exceeded £1,860,000,000.

The note circulation is also a powerful factor of the business of the Reichsbank. It is governed by the law of 1875 and the amending law of 1899, corresponding in some degree to Peel's act of 1844, which regulates the note circulation of the Bank of England. An uncovered limit, originally £12,500,000, increased to £14,811,450 by the lapse of the issues of other banks allowed to it, has been extended by these and by the act of the 5th of June 1902 to £23,641,450. Against the notes thus issued which are not represented by specie, treasury notes (_Reichskassenscheine_, the legal tender notes of the [v.03 p.0344] empire)[6] and notes of the issuing banks which are allowed to be reckoned as specie or discounted bills, must be held--maturing not later than three months after being taken--with, as a rule, three, but never less than two, good indorsements. There is also a provision that at least one-third of the notes in circulation must be covered by current German notes, money, notes of the imperial treasury, and gold in bullion or foreign coin reckoned at £69, 12s. per pound fine. The Reichsbank is bound by law to redeem its notes in current German money. It is stated that this may be gold coin or silver thalers, or bar-gold at the rate of 1392 marks (£69, 12s. reckoning marks as 20 = £1) the pound fine of gold. In practice, however, facilities have not always been given by the Reichsbank for the payment of its obligations in gold, though the importance of this is admitted. In the balance-sheet for 1906 the bills held amounted to £67,000,000, and the loans and advances to £14,200,000. The notes issued averaged for the year £69,000,000. The gold held amounted, 30th December 1906, to £24,069,000. If the condition of business requires that the notes in circulation should exceed the limits allowed by the law, the bank is permitted to do this on the payment of 5% on the surplus. In this respect the German act differs from the English act, which allows no such automatic statutory power of overpassing the limit of issue. Some good authorities consider that this arrangement is an advantage for the German bank, and the fact that it has been made use of annually since 1895 appears to show that it is needed by the business requirements of the country. Of late years the excess of issue of the Reichsbank has been annual and large, having been £25,267,000 on the 29th of September 1906 and £28,632,000 on the 31st of December of the same year. The amount of the duty paid on the excess issue in the year 1906 was £184,764, and the total amount paid thus from 1876 to 1906 was £839,052. The increase of the uncovered limit (untaxed limit of issue called in Germany the "note reserve") has not been sufficient to obviate the need for an excess of issue beyond the limit.

In accordance with a law passed in 1906 the Imperial Bank issues notes (_Reichsbanknoten_) of the value of 20 marks (£1), and 50 marks (£2, 10s.) in addition to the 5, 10, 100 and 1000 mark notes (5s., 10s., £5, £50) previously in circulation. Imperial paper currency of the value of 20 or 50 marks (£1 and £2, 10s.) had previously existed only in the form of treasury notes (_Reichskassenscheine_); these will in consequence be withdrawn from circulation.

The amendment of the banking law of Germany, passed in 1899, not only affects the position of the Reichsbank, but that of the four other note-issuing banks. The capital of the Reichsbank has been raised by the bill of that year to £9,000,000. The reserve fund has been raised out of surplus profits to £3,240,000. This exceeds the amount required by the act of 1899, which was £3,000,000. The amending act further diminishes the dividend receivable by the stockholders of the Reichsbank and increases the share which the government will obtain.

The arrangement with the four note-issuing banks is designed to cause them to work in harmony with the Reichsbank when the Reichsbank has to raise its bank-rate in order to protect its gold reserves. The official published rate of discount of the Reichsbank is to be binding on the private note-issuing banks after it has reached or when it reaches 4%. At other times they are not to discount at more than ¼% below the official rate of the Reichsbank, or in case the Reichsbank itself discounts at a lower rate than the official rate, at more than 1/8% below that rate. If the Reichsbank discounts below the official rate, it is to announce that fact in the _Gazette_.

The subject being important, we quote from the amending act the sections governing the discount rate:--_Gesetz, betreffend die Abänderung des Bankgesetzes vom 14. März 1875; vom 7. Juni 1899, Artikel 7, S. 1_. The private note-issuing banks are bound by _Artikel 7, S. 2_, after the 1st of January 1901:--"(1) Not to discount below the rate published in S. 15 of the bank law, so long as this rate attains or exceeds 4%, and (2) moreover, not to discount at more than ¼% below the Reichsbank rate, published in S. 15 of the bank law, or in case the Reichsbank itself discounts at a lower rate, not to discount at more than 1/8% below that rate."

It remains to be seen whether the note-issuing banks will find these conditions too onerous, and rather than be bound by them will give up their right of issuing notes. The object of the enactment is apparently to protect the specie reserve of the Reichsbank, but it may be doubted whether, considering the importance of the other banks of Germany--none of which is bound by similar conditions--relatively to the note-issuing banks, the restrictions put on the note-issuing banks will have any practical effect.

Since 1870 banking has made immense progress in Germany, but it may be some time before the habit of making payments by cheque instead of specie or notes becomes general.

AUTHORITIES.--_Parliamentary Papers: Report, together with Minutes of Evidence and Accounts, from the Select Committee on the High Price of Gold Bullion_, House of Commons, 8th of June 1810; _Reports, Committee of Secrecy on Bank of England Charter_, House of Commons, 1832; _Select Committee on Banks of Issue_, House of Commons, 1840; _First and Second Reports, Select Committee on Banks of Issue_, House of Commons, 1841; _First and Second Reports, Secret Committee on Commercial Distress_, House of Commons, 1848; _Report, Select Committee on Bank Acts_, House of Commons, 1857; _Report, Select Committee on Bank Acts_, House of Commons, 1858; _Report, Select Committee on Banks of Issue_, House of Commons, 1875; _Report from Secret Committee of the House of Lords on the Causes of the Distress which has for some time prevailed among the Commercial Classes, and how far it had been affected by the Laws for regulating the Issue of Bank Notes payable on demand_, session 1847-1848; _Analysis of the Minutes of Evidence taken before the Select Committee of the House of Commons on Banks of Issue, 1875, with a selection from the evidence_, by R. H. Inglis Palgrave, London, 1876 (printed for private circulation).

GENERAL INFORMATION.--Articles on banking, &c., _Dictionary of Political Economy_, edited by R. H. Inglis Palgrave (Macmillan & Co., 1894-1906); _Handwörterbuch der Staatswissenschaften_, edited by Conrad, Elster, Lexis and Löning, 1899; _Wörterbuch der Volkswirthschaft_, 2 vols. (ed. Elster, 1898); _Dictionnaire des finances_, edited under the direction of Léon Say, by L. Foyot and A. Lanjalley (1889); _Dictionnaire du commerce, de l'industrie et de la banque_, edited by A. Raffalovich and Yves Guyot; _Bankers' Magazine_, commenced 1844, to present time; _Journal of the Institute of Bankers_, commenced 1879, to present time; _Bankers' Magazine_ (New York); _Economist_ newspaper, commenced 1843, to present time; _Banking Almanac_, commenced 1845, to present time; _Reports of the Comptroller of the Currency_ (Washington).

EARLY.--_De Monetarum Augmento, variatione et diminutione, Tractatus varii_ (1509); _A proposal to supply His Majesty with twelve or fourteen Millions of Money (or more if requir'd)_, by A. D. of Grey's Inn, Esq., and some Others, his Friends (1697); Hayes' _Negociators' Magazine of Monies and Exchanges_, 1730; Lord King, _Thoughts on Bank Restrictions_ (1804); _The Theory of Money with considerations on the Bank of England_ (1811); William Cobbett, _Paper against Gold and Glory against Prosperity_, 2 vols. (1815); _Circulating Credit with Hints for improving the Banking System of Britain, by a Scottish Banker_ (1832); W. Leckie, _Bank Restriction_ (1841); _Debates in the House of Commons on Sir R. Peel's Bank Bills of 1844 and 1845_, reprinted verbatim from "Hansard's Parliamentary Debates," 1875; _Gilbart's Works_, 6 vols. (1865); _The History, Principles and Practice of Banking_, by J. W. Gilbart, edited and revised by A. S. Michie, 1882; Thomson Hankey, _Principles of Banking_ (1867); Walter Bagehot, _Lombard Street_ (1873), a brilliant picture of the city at that date (new ed., 1906); A. S. Cobb, _Threadneedle Street, a reply to "Lombard Street"_ (1891); John Dun, _British Banking Statistics_ (1876); R. H. Inglis Palgrave, _Notes on Banking_; George Rae, _The Country Banker_ (1886), and several editions later (many sound hints on practice); J. George Kiddy, _The Country Banker's Handbook_, 4th ed. (1903); C. F. Dunbar, _Chapters on the Theory and History of Banking_ (1891); Charles Gairdner, _The Making of the Gold Reserves_ (1891); J. B. Attfield, _English and Foreign Banks_ (1893) (refers to management of banks); T. B. Moxon, _English Practical Banking_, 10th ed. (1899); A. Crump, _The Key to the London Money Market_ (1872); W. Y. Duncan, _Notes on the Rate of Discount in London_, 3 vols., 1822-1856, 1856-1866, 1866-1873, privately printed, Edinburgh, 1856, 1867 and 1877; R. H. Inglis Palgrave, _Bank Rate and the Money Market in England, France, Germany, Holland and Belgium_, 1844-1900 (1903); Ernest Seyd, _The Bank of England Note Issue and its Error_ (1874); Ernest Seyd, _London Banking and Bankers' Clearing House System_; Ernest Seyd, _The Silver Question in 1893_; Walter Bagehot, _Depreciation of Silver_ (1877); Ernest Seyd, _Bullion and the Foreign Exchanges_ (1868); Clare, _The A B C of the Foreign Exchanges_ (1895, 2nd ed. 1895); _Tracts_, by Lord Overstone (1837-1857); _Select Tracts on Money, &c._, reprinted privately by Lord Overstone, 1856-1859 (containing much valuable and interesting information on early history); A. Crump, _A Practical Treatise on Banking, Currency and the Exchanges_ (1866); Bonamy Price, _Currency and Banking_ (1876) (the interest of this volume to the student of banking is found mainly in the correspondence between Mr Henry Hucks Gibbs (Lord Aldenham) and Professor Bonamy Price on the reserve of the Bank of England); R. H. Inglis Palgrave, _On the Influence of a Note Circulation in the Conduct of Banking Business_, read before the Manchester Statistical Society, 1877; Edgar Jaffé, _Das englische Bankwesen_ (Leipzig, 1905); _A History of Banks_ (1837); D. Hardcastle, _Banks and Bankers_ (1843); W. J. Lawson, _The History of Banking_ (1850); R. Baxter, _The Panic of 1866_ (1866); F. G. H. Price, _A Handbook of London Bankers_ (1876); Conant, _History of Modern Banks of Issue_ (New York, 1896); _History of Banking in all Leading Nations_, 4 vols. (New York, 1896); Viscount Goschen, _Essays and Addresses on Economic Questions, 1865-1893_ (1905), (arts. on "Seven per cent," "Two per cent," "Our cash reserves and central stock of gold"); C. F. Dunbar, _Economic Essays_, edited by O. M. W. Sprague (1904), (containing many articles on banking, particularly in the United States).

BANK OF ENGLAND.--T. Fortune, _A Concise and Authentic History of the Bank of England_ (1802); John Francis, _History of the Bank of England_ (1847); J. E. Thorold Rogers, _The First Nine Years of [v.03 p.0345] the Bank of England_ (1887); B. B. Turner, _Chronicles of the Bank of England_ (1897); T. A. Stephens, _Bibliography of the Bank of England_ (1897); A. Andréadès, _Histoire de la banque d'Angleterre_ (1904; Eng. trans., 1909); Sir F. Schuster, _The Bank of England and the State_ (1906).

HISTORY OF BANKING HOUSES.--L. H. Grindon, _Manchester Banks and Bankers_ (1877); J. B. Martin, _"The Grasshopper" in Lombard Street_ (1892); M. Phillips, _Banks, Bankers, and Banking in Northumberland, Durham and North Yorkshire_ (1894); C. H. Cave, _History of Banking in Bristol_ (1899); Bidwell, _Annals of an East Anglian Bank_ (1900); Richardson, _Coutts & Co., Bankers, Edinburgh and London_; H. T. Easton, _History of a Banking House_ (Smith, Payne & Smiths) (1903); J. Hughes, _Liverpool Banks and Bankers, 1760-1837_ (1906).

SCOTLAND.--W. H. Logan, _The Scottish Banker_ (1847); Robert Somers, _The Scotch Banks and System of Issue_ (1873); W. Mitchell, _Scotch Banks and Limited Liability_ (1879); A. W. Kerr, _History of Scotch Banking_ (1884); A. W. Kerr, _Scottish Banking, 1865-1896_ (1898); Boase, _A Century of Banking in Dundee_ (1867).

IRELAND.--Malcolm Dillon, _History and Development of Banking in Ireland_ (1889).

BRITISH COLONIES.--Edward B. Hamilton, _A Manual of the Law and Practice of Banking in Australia and New Zealand_ (1880); _Banking in Australasia_ (1883); _The Canadian System of Banking and the National Banking System of the United States_ (Toronto, 1890); _Journal of the Canadian Bankers' Association_ (Montreal).

FRANCE.--Annuaire-Chaix, _Les Principales Sociétés par actions_ (1905); A. Raffalovich, _Le Marché financier_ (1905).

GERMANY.--Dr W. Scharling, _Bank Politik_ (Jena, 1900); _Die Reichsbank, 1876-1900_ (a history and description of the operations of the bank); Dr Adolf Weber, _Depositenbanken und Spekulationsbanken, Ein Vergleich deutschen und englischen Bankwesens_ (Leipzig, 1902); Dr Felix Hecht, _Die Mannheimer Banken, 1870 bis 1900_ (Leipzig, 1902); Siegfried Buff, _Das Kontokurrentgeschaft im deutschen Bankwerbe_ (Stuttgart and Berlin, 1904); Dr Riesser, _Zur Entwicklungsgeschichte der deutschen Grossbanken mit besonderer Rucksicht auf die Konzentrationsbestrebungen_ (1905); G. M. Boissevain, _Duitsche en Engelsche Deposito-Banken_ (1905).

ITALY.--_La Banca Popolare di Milano_ (1881).

AUSTRIA.--Compass, _Finanzielles Jahrbuch für Österreich-Ungarn_ (Vienna).

JAPAN.--_The House of Mitsui_ (Tokio); _The Law and the By-Laws of the Nippon Kogyo Ginko (The Industrial Bank of Japan)_ (1903).

H. W. Wolff, _People's Banks_ (1893). (On systems worked by Schulze-Delitzsch, Raiffeisen, Luzzatti, Banche Popolari, Dr Wollemborg, Popular Banks in Belgium, Switzerland, France, England).

(R. H. I. P.)

UNITED STATES

The early history of the American colonies is strewn, like that of most new countries, with many crude experiments in banking and currency issues. Most of these colonial enterprises, however, were projects for the issue of paper money rather than the creation of commercial banks. Speculative banking was checked to a large extent in the colonies by the Bubble Act (6 Geo. I. c. 18), which was passed in England after the bursting of the South Sea Bubble. This act, which forbade the formation of banking companies without a special charter, was in 1740 extended to the colonies.

The serious history of banking in the United States may be said to have begun with the foundation of the Bank of Pennsylvania. This bank originated in the project of a number of the citizens of Philadelphia to supply the continental army with rations. The first bills, issued in 1780, were nothing more than interest-bearing notes payable at a future time. The advances in continental money made by the shareholders were secured by bills of exchange for £150,000, drawn on the American envoys in Europe, but not intended to be negotiated.

A further outgrowth of the needs of the continental government was the Bank of North America, which was authorized by congress on May 26, 1781. The act gave to Robert Morris, the financier, power to create a bank with a capital of $400,000, to be increased if desirable. Morris arranged with the Bank of Pennsylvania to take over its holdings of foreign bills and paid in cash its claims against the Federation. The Bank of North America did not begin business until the 7th of January 1782, and there was so much doubt of the power of the continental congress to charter a bank that it was thought advisable to obtain a charter from the state of Pennsylvania. Under this charter the bank continued to operate until it was absorbed in the national banking system in 1863, and it may be considered the oldest organized banking institution in the United States.

The bank did much, during the first eight years after its organization, to restore order to the chaos of Federation finances. It loaned to Morris, as government superintendent of finance, $1,249,975, of which $996,581 was repaid in cash and the remainder by surrendering the stock in the bank owned by the government.

_The Bank of the United States._--A national bank of issue was one of the essential parts of the system built up by Alexander Hamilton in organizing the finances of the Federal government under the constitution of 1789. The first "Bank of the United States" was accordingly incorporated in 1791, with a capital of $10,000,000, divided into 25,000 shares of $400 each. This bank issued circulating notes, discounted commercial paper and aided the government in its financial operations. The government subscribed one-fifth of the capital, but paid for it by a roundabout process which actually resulted in the loan of the amount by the bank to the treasury. Other loans were made by the bank to the government, which gradually carried the obligation by the end of 1795 to $6,200,000. In order to meet these obligations, the government gradually disposed of its bank stock, until by 1802 its entire holdings had been disposed of at a profit of $671,860. The bank did not publish regular reports, but a statement submitted by Gallatin to congress for January 24, 1811, showed resources of $24,183,046, of which $14,578,294 was in loans and discounts, $2,750,000 in United States stock and $5,009,567 in specie.

The expiration of the charter of the bank in 1811 was the occasion of a party contest, which prevented renewal and added greatly to the financial difficulties of the government in the war with Great Britain which began in the next year. Although foreign shareholders were not permitted to vote by proxy, and the twenty-five directors were required to be citizens of the United States, the bank was attacked on the ground of foreign ownership as well as on the constitutional ground that congress had no power to create such an institution.

The government was compelled in the war of 1812 to rely on the state banks. Their suspension of specie payments, in 1814, made it very difficult for the treasury to transfer funds from one part of the Union to the other, because the notes of one section did not circulate readily in another. Gallatin left on record the opinion that the suspension of specie payments "might have been prevented at the time when it took place, had the former Bank of the United States been still in existence."

The financial condition of the government became so bad during the war that the second Bank of the United States was authorized in April 1816. The general project was that of Alexander J. Dallas, who in October 1814 had become secretary of the treasury. The capital of the new bank was $35,000,000, and the government again appeared as owner of one-fifth of the stock, which was paid in a stock note. The president of the United States was authorized to appoint five of the twenty-five directors and public funds were to be deposited in the bank, "unless the secretary of the treasury shall at any time otherwise order and direct." The right of congress to charter the bank came before the Supreme Court in 1819 in the famous case of _McCulloch_ v. _Maryland_. Chief Justice Marshall rendered the decision that the right to create the bank was within the implied powers granted by the Federal constitution, and that it was not competent for the states to levy taxes upon the circulating notes of the bank or upon its property except in common with other property.

The second Bank of the United States was not well managed in the early part of its career, but was upon a firmer foundation under the presidency of Langdon Cheves in 1819. Its policy greatly benefited commerce, but invited bitter complaints from the private dealers in exchange, who had been enabled to make excessive profits while the currency was below par, because of its different values in different states and the constant fluctuations in these values. The Bank, in the language of the report of Senator Samuel Smith of Maryland in 1832, furnished "a currency as safe as silver, more convenient, and more valuable [v.03 p.0346] than silver, which through the whole western and southern and interior parts of the Union, is eagerly sought in exchange for silver; which, in those sections, often bears a premium paid in silver; which is, throughout the Union, equal to silver, in payment to the government, and payments to individuals in business."

The bank in 1835 had attained a circulation of $23,075,422; loans of $59,232,445; and deposits of $5,061,456. The institution was ultimately destroyed by the open enmity of President Jackson, who in 1833 had suspended the deposit of public money in its custody. This policy known as the "removal of the deposits," excited a bitter political controversy in which Clay and Webster led the opposition, but Jackson was supported by the public (see JACKSON, ANDREW). The Federal charter of the bank expired in 1836. Under a charter obtained by President Nicholas Biddle from the state of Pennsylvania, the bank continued its business, but without success, and in 1841 it went into liquidation.

_The State Banks_.--The Bank of the United States found powerful rivals during its life and successors after its death in the banks chartered by the separate states. In the undeveloped state of the country in the early days there was much unsound and speculative banking. The most successful systems were those of New York and New England, where the surplus capital of the country in the early days was chiefly concentrated. The least successful banking systems were those in the newer and poorer sections of the country, and they grew progressively worse as poverty and inexperience added to the difficulty of setting aside capital for investment in the tools of exchange.

The termination of the first charter of the Bank of the United States was followed by a banking mania. In Pennsylvania a bill authorizing 41 new banks was passed over the veto of the governor, and 37 of them were in operation in 1814. Similar movements in other states increased the number of banks in four years (1811-1815) from 88 to 208. The amount of specie was not adequate to support the mass of credit which these banks created, and what there was in the country drifted to New England, which was upon a metallic basis. A number of banks collapsed in 1814, and business prostration was prolonged for several years.

The banking laws of the states varied considerably. Some states authorized the issue of notes upon state bonds, many of which, especially at the outbreak of the Civil War, proved valueless. In New England, however, a system prevailed which required the prompt redemption of the banks' notes at par. The New England Bank was the pioneer of this movement in 1814. In 1824 what was known as the "Suffolk system" of redemption came into operation. This system provided for the deposit by a bank in the Suffolk Bank in Boston of a redemption fund, from which the notes were redeemed and afterwards sent home by the Suffolk Bank for collection. This system, with slight modifications, continued in successful operation until 1858. The circulation of the New England banks in 1858 was less than $40,000,000 and the redemptions in the course of the year through the Suffolk Bank were $400,000,000. It was the essential merit claimed for the system that it tended to keep the volume of the circulation constantly adjusted to the requirements of business. A branch redemption agency was established at Providence. Legal sanction was given to the system in Vermont by an act of 1842, which levied a tax of 1% upon bank capital, but remitted this tax to any bank which should "keep a sufficient deposit of funds in the city of Boston, and should at that city uniformly cause its bills to be redeemed at par."

The period from 1836 to 1842 was a trying one for American banking. It was preceded by another great expansion in financial ventures, made without sufficient circulating capital or adherence to conservative banking methods. Foreign capital had come into the country in considerable amounts after the English crisis of 1825, the entire debt of the general government was paid off and a tremendous speculation occurred in public lands, which were expected to advance rapidly in value as the result of immigration and the growth of the country. The sales of public lands in 1836, on the eve of the crisis, reached 20,074,870 acres and brought receipts to the treasury of $25,167,833. How essentially speculative was the mass of these sales is indicated by the fact that such receipts declined in 1842 to only $1,417,972. President Jackson pricked the bubble of speculation by the "Specie circular" of July 11, 1836, requiring payments for public lands to be made only in specie or notes of specie value. Practically every bank in the Union stopped payment, and banking capital fell from $358,442,692 in 1840 to $196,894,309 in 1846. As usual in periods of business collapse the shrinkage of capital did not follow at once the outbreak of the panic, but was the result of gradual liquidation. Specie payments were resumed in 1838, but there was another crash in 1842, after the United States Bank finally suspended.

In New York, which was becoming the chief commercial state of the Union, the banks of New York City were generally sound, but several different systems were tried of securing the circulating notes. The "safety-fund system," inaugurated in 1829, provided for a contribution by each bank towards a fund to meet the deficit of any contributing bank which might fail with assets insufficient to meet its liabilities. It was the intention of the act to protect by this fund only the bank-notes, but it was treated as a fund for the payment of all the liabilities of a failed bank and in consequence the fund was exhausted by important failures which occurred in the panics of 1837 and 1857. Before 1843 the issue of notes was not controlled by the state, so that in several cases there were illegal over-issues.

What was called the "free-banking system" was inaugurated in New York by the act of 1838. This system permitted any body of persons, complying with the requirements of the law, to form a bank and issue circulation secured by the deposit of various classes of public bonds. This system was in operation at the outbreak of the Civil War, was imitated in several other states, and became in a measure the model of the national banking system. The state banks of Indiana and Ohio were among the most successful of the state banks, being modelled somewhat on the European plan of a central bank. They held in their states an exclusive charter for issuing notes and had branches at important points throughout the state. Under the management of Hugh McCulloch, afterwards secretary of the treasury, the bank of Indiana weathered the crisis of 1857 without suspending specie payments, and retired its circulation when gold went to a premium in 1862.

One of the defects of the state system of note-issues was the inconvenience which it occasioned. Notes issued outside a state could not safely be received without careful scrutiny as to the responsibility of their issuers. The systems prevailing in New England, in Louisiana, in Ohio and in Indiana were eminently successful, and proved the soundness of the issue of bank-notes upon the assets of a well-conducted commercial bank. But the speculation fostered by loose banking laws in some other states, and the need for uniformity, cast a certain degree of discredit upon the state banks, and prepared the way for the acceptance of a uniform banking system in 1864.

The power of note-issue formed a more important part of banking resources before the Civil War than in later years, because the deposit system had not attained its full development. Thus in 1835 circulation and capital of state banks combined were about $335,000,000 and deposits were only $83,000,000, in 1907 circulation and capital of national banks $1,430,000,000, while deposits were $4,322,000,000--in the earlier period deposits forming less than one-third of the other two items and in the later period three times the other items. The circulation of the state banks fluctuated widely at different periods. A maximum of $149,185,890 was attained in 1837, to decline to $106,968,572 three years later and to a minimum of $58,563,608 in 1843. From this point there was a tendency upward, with some variations, which put the circulation in 1845 at $89,608,711; 1848, $128,506,091; 1850, $131,366,526; 1854, $204,689,207; 1856, $195,747,950; 1858, $155,208,344; 1860, $207,102,477; 1863, $238,677,218.

Other leading items of the accounts of the state banks for representative years are as follows:--

[v.03 p.0347]

_State Banking Progress_, 1835-1863. +------+--------+---------------+-------------+-------------+ | | No. of | | Loans and | | | Year.| Banks. | Capital Stock.| Discounts. | Deposits. | +------+--------+---------------+-------------+-------------+ | 1835 | 704 | $231,250,337 |$365,163,834 | $83,081,365 | | 1845 | 707 | 206,045,969 | 288,617,131 | 88,020,646 | | 1850 | 824 | 217,317,211 | 364,204,078 | 109,586,595 | | 1855 | 1307 | 332,177,288 | 576,144,758 | 190,400,342 | | 1860 | 1562 | 421,880,095 | 691,945,580 | 253,802,129 | | 1863 | 1466 | 405,045,829 | 648,601,863 | 393,686,226 | +------+--------+---------------+-------------+-------------+

_The National Banking System._--The creation of the national banking system was mainly the outcome of the financial necessities of the Federal government in the Civil War. It was found difficult to float government bonds at profitable rates, and Mr Chase, the secretary of the treasury, devised the scheme of creating a compulsory market for the bonds by offering special privileges to banks organized under Federal charters, which would issue circulating notes only when secured by the deposit of government bonds. But this plan, authorized by the act of 25th February 1863 (supplemented by the act of 3rd June 1864), was not sufficient to give predominance to the national banks. The state banking systems in the older states were so firmly entrenched in the confidence of the commercial community that it became necessary to provide for imposing a tax of 10% upon the face-value of the notes of state banks in circulation after the 1st of July 1866. The state banks were thus driven out of the note-issuing business, some being converted into national banks, while others continued their commercial business under state laws without the privilege of note-issue. A remarkable growth in the national banking system took place; in 1864 there were 453 national banks with an aggregate capital of $79,366,950, and in 1865 there were 1014 banks with an aggregate capital of $242,542,982.

The national banking system was specially marked by the issue of circulating notes upon United States bonds. Any national bank desiring to issue notes might by law deposit with the United States treasurer bonds of the United States to an amount not exceeding its capital stock, and upon such bonds it might receive circulation equal to 90% of their par-value. No bank could be established which did not invest one-third of its capital in bonds. This was changed in 1874 so as to reduce the requirement to 25%, with a maximum mandatory requirement of $50,000. Notes were taxed at the rate of 1% per annum. The banks obtained from the provision for circulation the benefit of what was described by critics as "double interest," being credited with the interest on bonds in the custody of the treasury department, and being also able to lend their notes to the public. But several deductions had to be made: notes could not be issued to the full par-value of the bonds; the tax of 1% upon circulation reduced by that amount the profit which would otherwise be earned; and the banks had to set aside in gold or other lawful money what was needed for redemption purposes and for reserves. As the banks suspended specie payments at the close of 1861 and great masses of government paper-money were issued, gold ceased to be a medium of exchange except in California, and the new banks redeemed their notes in government paper. The gold-value of the bank-notes, therefore, rose and fell with that of government notes until the resumption of payments in specie by the national treasury on the 1st of January 1879.

The amount of bank-notes in circulation proved in practice to be influenced largely by the price of bonds. The maximum originally set for bank circulation was $300,000,000. This was increased in 1870 by $54,000,000, and in 1875 the limit was removed. The circulation reached $362,651,169 on the 1st of January 1883, but afterwards declined materially as bonds became scarce and the price rose. The fact that circulation could be issued to only 90% of the par-value of the bonds greatly reduced the net profits on circulation when the price of 4% bonds rose in 1889 above 129 and other classes of bonds rose in like ratio. The circulation of bank-notes fell as low as $167,927,574 on the 1st of July 1891, but afterwards increased somewhat as the supply of bonds was increased to meet the treasury deficiencies of 1894-1896 and the expenses of the war with Spain.

The national banks supported the government cordially in the measures taken to bring about resumption of gold payments on the 1st of January 1879 under the law of 1875. The banks held more than $125,000,000 in legal tender notes, of which sum nearly one-third was held in New York City. A run upon the treasury for the redemption of these notes would have exhausted the gold funds laboriously accumulated by secretary Sherman and compelled a new suspension. But the banks appointed a committee to co-operate with the treasury, declined to receive gold longer as a special deposit, and resolved to receive and pay balances without discrimination between gold and government notes. Thus resumption was accomplished without jar, and as early as the 17th of December 1878 gold sold at par in paper.

The silver legislation enacted by Congress in 1878 and 1890 caused uneasiness in banking circles, and the banks discriminated against silver dollars and silver certificates in their cash. When the treasury began to lose gold heavily, however, in 1893, a combination of leading bankers in New York, Boston, Philadelphia, Baltimore and Chicago turned over a large part of their holdings to replenish the government reserves. About 150 national banks suspended during the panic of 1893, but 84 of these afterwards resumed business. As in former periods of depression, the system suffered the greatest decline during the years of liquidation following the actual panic, the number of banks falling from 3856 on the 1st of June 1893 to 3585 on the 1st of June 1899, and aggregate capital falling during the same period from $698,454,665 to $610,028,895.

A new extension was given to the national banking system by the provisions of the gold standard law of 14th March 1900. Banks were authorized to issue circulation to the full par-value of bonds deposited, and the tax upon circulation was reduced from 1% to ½ of 1% in the case of circulation which was secured by the 2% refunding bonds, which were authorized by this law. By issuing 2% bonds in exchange for those paying a higher interest, at approximately the market-price, it became possible to obtain a given amount of notes upon a smaller investment in bonds, independent of other provisions of the law. Under these provisions the volume of notes outstanding, secured by bonds, which stood on the 31st of October 1899 at $207,920,774, reached on the same date in 1900, $298,829,064; in 1901, $328,198,613; in 1902, $335,783,189; in 1903, $380,650,821; in 1904, $424,530,581; in 1905, $490,037,806; in 1906, $536,933,169; and in 1907 $562,727,614.

The lowest denomination of national bank-notes authorized by law is $5, and not more than one-third of any bank's issues can be of this denomination. The government issues notes for $1 and $2, as well as for higher denominations. The largest amount of bank-notes of one denomination is in bills for $10, which on the 31st of October 1907 constituted $249,946,530 in total outstanding issues of $609,905,441. Of this total circulation $562,727,614 was secured by bonds, and the remainder, $47,252,852, was covered by lawful money in the government treasury, deposited for the redemption and retirement of the notes as they might be received.

An important extension of the national system resulted from the authority given by the act of 1900 to incorporate national banks with a capital as low as $25,000, in places having a population not in excess of 3000. The previous minimum limit had been $50,000. Under this provision there were incorporated to the 31st of October 1907 2389 national banks with capitals of less than $50,000, with aggregate capital of $62,312,500, of which 272 banks were conversions of state and private institutions, 752 were reorganizations and 1365 were new institutions.

The national banks possess most of the powers of commercial banks, but are not permitted to hold real estate other than their banking houses, unless taken for debt. Five reports are required each year to the comptroller of the currency at dates selected by him without notice, and each bank is subject to the visitation of bank examiners acting under the comptroller. No reserves against notes are required by existing law except 5%, which is [v.03 p.0348] kept in Washington for current redemption purposes. The redemption system is defective in that redemptions are not authorized at other places, and the notes reach the treasury on an average only about once in two years. For many years the banks were prohibited from retiring more than $3,000,000 of notes monthly, but the limit was raised by an act of 4th March 1907 to $9,000,000 per month.

Reserves are required against deposits to the amount of 25% in so-called "reserve cities," and 15% in what are called the "country banks" outside of reserve cities. Not all these amounts, however, are required to be kept in cash. The three central reserve cities, where cash is required, with only trifling deductions, are New York, Chicago and St Louis. In other reserve cities, which in 1908 numbered forty, the banks are permitted to deposit half their cash in national banks in central reserve cities, while country banks may deposit three-fifths of their cash in any reserve city. The shareholders of national banks are subject in case of liquidation to double liability upon their shares, and this is now the rule in most of the conservative state banking systems. National bank-notes are not legal tender, but are receivable by the government for all obligations except customs dues.

The panic of 1907 imposed a severe strain upon the cash resources of the banks of New York City, but did not cause any such considerable number of failures as occurred in 1893.

Payment of cheques in currency was suspended in New York on the 28th of October 1907, and continued until about the beginning of the year 1908. The panic was precipitated by over-speculation by a group of national banks, followed by the suspension of the Knickerbocker Trust Company on the 22nd of October with deposits of $48,000,000. Then came runs on other companies, a deficit in the required reserves of New York banks of $38,838,825 in the week of 2nd November, and arrangements for the importation of foreign gold to an amount which soon approached $100,000,000. With an increase during the autumn of about $77,000,000 in national bank circulation, a transfer of $72,000,000 from the treasury to the banks, and a further decline in required reserves in New York during the next week, the amount of currency which was added to the circulation or disappeared during a few weeks of the panic amounted to more than $275,000,000, or nearly one-tenth of the usual volume of circulation in the country. The total bank-note circulation on the 28th of December 1907 had risen to $687,340,835; but this amount was abnormal and was reduced somewhat during the spring of 1908.

The position of the trust companies, especially those of the city of New York, was one of the disturbing features of the panic. These companies were comparatively a small factor in New York finance at the time of the panic of 1893. The capitalization of all the trust companies in the United States, even as late as 1897, was only $106,968,253, and individual deposits were $566,922,205. The capital of these companies had risen in 1907 to $276,146,081 and their deposits to $2,061,623,035. The trust companies of New York were required by the law of the state to maintain only 5% of their demand deposits in cash in their vaults. Whilst most of them had also large amounts on deposit in national banks, these reserves proved inadequate to sustain the vast mass of credit which was built upon them. The absolute amount of the reserves, however, was perhaps less important than the class of business to which some of the less conservative of these companies had committed themselves. Instead of keeping their assets liquid by purchases of commercial paper and loans on first-class negotiable securities, they had in some cases engaged in speculative underwritings and had locked up their funds in enterprises requiring a long time for their consummation.

It was these combined influences which led to distrust of the Knickerbocker Trust Company, and to the runs upon that company and others during the late days of October and early November. The result was to reduce the total resources of the forty-eight trust companies of Greater New York from $1,205,019,700 on the 22nd of August 1907 to $858,674,000 on the 19th of December 1907. Individual deposits subject to cheque fell from $692,744,900 to $437,733,400. Such a reduction of resources within so short a time, most of it being accomplished within a few weeks, has hardly ever been recorded in the history of banking, and the fact that the stronger companies were able to call in their cash and meet such demands was evidence to a certain extent that the criticisms upon them were exaggerated. The necessity for stronger reserves and for greater safeguards against speculative operations was so strongly impressed upon the public mind, however, that several restrictive measures were enacted at the session of the New York legislature in 1908, designed to prevent any abuses of this sort in the future.

The function of issuing notes, which is exclusively a privilege of national banks, has diminished in importance in America, as other methods of transferring credit have attained a wide development. This has not only been true of the national banks themselves, but has accounted for the development alongside the national banking system of state banks, private banks and trust companies, which have not had the privilege of note-issue, but have obtained other privileges sometimes greater than those of the national banks.

The aggregate resources of all classes of banks in the United States have greatly increased in recent years. The following table shows the increase in the chief items of the accounts of national banks for representative years from the reports made nearest to the beginning of the year:--

PROGRESS OF NATIONAL BANKS, 1865-1908 +--------+----------+-------------------+-----------------+ | | No of | Loans and | Individual | | Year. | Banks | Discounts. | Deposits | +--------+----------+-------------------+-----------------+ | 1865 | 638 | $166,448,718 | $183,479,636 | | 1870 | 1615 | 688,875,203 | 546,236,881 | | 1875 | 2027 | 955,862,580 | 682,846,607 | | 1880 | 2052 | 933,543,661 | 755,459,966 | | 1885 | 2664 | 1,234,202,226 | 987,649,055 | | 1890 | 3326 | 1,811,686,891 | 1,436,402,685 | | 1895 | 3737 | 1,991,913,123 | 1,695,489,346 | | 1897 | 3661 | 1,901,160,110 | 1,639,688,393 | | 1899 | 3590 | 2,214,394,838 | 2,225,269,813 | | 1900 | 3602 | 2,479,819,494 | 2,380,610,361 | | 1901 | 3942 | 2,706,534,643 | 2,623,997,521 | | 1902 | 4291 | 3,038,255,447 | 2,964,417,965 | | 1903 | 4666 | 3,303,148,091 | 3,152,878,796 | | 1904 | 5180 | 3,469,195,043 | 3,300,619,898 | | 1905 | 5528 | 3,728,166,086 | 3,612,499,598 | | 1906 | 5911 | 4,071,041,164 | 4,088,420,135 | | 1907 | 6288 | 4,463,267,629 | 4,115,650,294 | | 1908 | 6625 | 4,585,337,094 | 4,176,873,717 | +--------+----------+-------------------+-----------------+

The combined returns of state and private banks, savings banks and loan and trust companies in the United States show a growth within a few years which is indicated by the principal items of their accounts:--

RESOURCES OF STATE BANKS, TRUST COMPANIES, &c.

+-----------------------+------------------+----------------+ | Items. | 1897. | 1907. | +-----------------------+------------------+----------------+ | Capital stock | $380,090,778 | $807,178,262 | | Surplus and profits | 382,436,990 | 924,655,010 | | Loans | 2,231,013,262 | 6,099,897,535 | | Deposits | 3,324,254,807 | 8,776,755,207 | | Total Resources | 4,258,677,065 | 11,168,514,516 | +-----------------------+------------------+----------------+

The aggregate banking power of the United States, as computed by the comptroller of the currency in his annual report for 1907, increased from $5,150,000,000 in 1890 to $17,824,800,000 in 1907, and the banking power of foreign countries from $10,835,000,000 to $27,034,200,000, representing an increase for all reporting countries from $15,985,000,000 to $44,859,000,000.

The system of clearing cheques has attained a higher development in the United States than in any other country, except perhaps, Great Britain. Clearing-houses exist in about 112 leading cities, and the aggregate clearings for the year ending 30th September 1907 reached $154,662,515,258. The New York Clearing-House inevitably does a large proportion of this business; its clearings constituted in 1906 67.2% of the total clearings in 55 of the larger cities. The volume of clearings fluctuates greatly with the volume of stock-exchange transactions and with the business prosperity of the country. An indication of these fluctuations at New York is afforded by the following table, taken from Conant's _Principles of Money and Banking_, brought down to 1907.

[v.03 p.0349]

VARIATIONS IN CLEARINGS AT NEW YORK

+------+-------------+-------------+-----------------------------+ | | Average | Per cent | | |Year. | Daily | Balances to | Remarks. | | | Clearings. | Clearings. | | +------+-------------+-------------+-----------------------------+ | 1870 | $90,274,479 | 3.72 | | | 1873 | 115,885,794 | 4.15 | Great business activity. | | 1874 | 74,692,574 | 5.62 | Industrial depression. | | 1881 | 159,232,191 | 3.66 | Renewal of railway building.| | 1885 | 82,789,480 | 5.12 | Results of bank panic. | | 1890 | 123,074,139 | 4.65 | Business expansion. | | 1894 | 79,704,426 | 6.54 | Depression following panic. | | 1896 | 96,232,442 | 6.28 | Free silver panic. | | 1899 | 189,961,029 | 5.37 | Renewed confidence and | | | | | activity. | | 1901 | 254,193,639 | 4.56 | Culmination of industrial | | | | | flotations. | | 1904 | 195,648,514 | 5.20 | Diminished stock-exchange | | | | | and business activity. | | 1906 | 342,422,773 | 3.69 | Stock-market activity. | +------+-------------+-------------+-----------------------------+

The Clearing-House Committee of the New York Clearing-House exercises a powerful influence over the banking situation through its ability to refuse aid in emergencies to a bank which is unwisely conducted. This power was used in the panic of 1907 to eliminate several important, but speculative, financial interests from control of national banks. Only national and state banks and the sub-Treasury were members of the Clearing-House at this time. Their weekly reports of condition were awaited every Saturday as an index of the state of the money-market and the exchanges; but this index was incomplete and sometimes misleading, because regular weekly reports were not made by trust companies. It was announced early in 1908 by the state superintendent of banking that he would exercise a power vested in him by law to require weekly reports in future from trust companies, so that the two classes of reports would present a substantially complete mirror of banking conditions in New York.

AUTHORITIES.--William M. Gouge, _A History of Paper Money and Banking in the United States_ (Philadelphia, 1833); Condy Raguet, _A Treatise on Currency and Banking_ (Philadelphia, 1840); J. S. Gibbons, _The Banks of New York, their Dealers, the Clearing-House and the Panic of 1857_ (New York, 1858); Albert S. Bolles. _Financial History of the United States_ (3 vols., New York, 1884-1886); Charles F. Dunbar, _Chapters on the Theory and History of Banking_ (New York and London, 1891); Horace White, _Money and Banking_ (Boston, 1902); Charles A. Conant, _A History of Modern Banks of Issue_ (New York, 1896); Alexander D. Noyes, _Thirty Years of American Finance_ (New York, 1898); Davis Rich Dewey, _Financial History of the United States_ (New York and London, 1903); John C. Schwab, _The Confederate States of America_, 1861-1865 (New York, 1901); David Kinley, _The Independent Treasury of the United States_ (New York, 1893); _Report of the Monetary Commission of the Indianapolis Convention_ (Chicago, 1898); Charles A. Conant, _The Principles of Money and Banking_ (2 vols., New York, 1905); William G. Sumner, _A History of American Currency_ (New York, 1884); Amos Kidder Fiske, _The Modern Bank_ (New York, 1904); William G. Sumner, _A History of Banking in the United States_ (New York, 1896), being vol. i. in _A History of Banking in All the Leading Nations_; John Jay Knox, _History of Banking in the United States_ (rev. ed., New York, 1900); and R. C. H. Catterall, _The Second Bank of the United States_ (Chicago, 1903).

Much statistical information is contained in the annual reports of the comptroller of the currency of the United States, published annually at Washington.

(C. A. C.)

ENGLISH LAW AFFECTING BANKS AND THEIR CUSTOMERS

_Issue of Notes_.--The legislation which culminated in the Bank Charter Acts of 1844 and 1845 secured to the Bank of England the absolute monopoly of the note issue within the city of London and a 3-m. radius. Outside that radius, and within 65 m. of the city, there is a concurrent right in banks, consisting of six or less than six persons, established before 1844, and issuing notes at that date; beyond the 65-m. radius the privilege may be exercised by all banks established before 1844, and then issuing notes, who have not since lost their right to do so by bankruptcy, abandonment of business, or temporary suspension of issue. According to some authorities, the effect of 20 and 21 Vict. cap. 49, sec. 12 [re-enacted Companies Consolidation Act 1908, sec. 286 (d)] was to sanction the increase in the constitution of any bank issuing notes outside the 3-m. and within the 65-m. radius from six to ten persons without affecting the power to issue notes. The rule as formulated above is, however, that enunciated by Bowen J. in _Capital and Counties Bank_ v. _Bank of England_, 1889; 61 L.T. 516. The increase in the number of joint-stock banks and the gradual absorption of the smaller and older concerns have had the effect of minimizing the output of notes other than those issued by the Bank of England, and, as exemplified by the case of _The Attorney-General_ v. _Birkbeck_, 12 Q.B.D. 57, it would seem impossible to devise any scheme by which the note-issuing power of an absorbed bank could be continued to the new or amalgamated body. But a bank having the right would not necessarily lose it by absorbing other banks (_Capital and Counties Bank_ v. _Bank of England_). Foreign banks may establish branches in Great Britain on complying with the regulations imposed on them by the Companies Consolidation Act 1908, but cannot apparently issue notes, even though payable abroad.

[Sidenote: Relation between banker and customer.]

_Deposit Business_.--The term "bank of deposit" gives a mistaken idea of the real relation between banker and customer. So long ago as 1848 it was decided by the House of Lords in _Foley_ v. _Hill_, 2 H. of L. 28, that the real relation between banker and customer was that of debtor and creditor, not in any sense that of trustee and _cestui que trust_, or depositee and depositor, as had been formerly supposed and contended. The ordinary process by which a man pays money in to his account at his banker's is in law simply lending the money to the banker; it fixes the banker with no fiduciary relation, and he is in no way responsible to the customer for the use he may make of the money so paid in. And as being a mere debt, a customer's right to recover money paid in is barred on the expiration of six years by the Statute of Limitations, if there has been no payment meantime on account of principal or interest, and no acknowledgment sufficient to bar the statute (_Pott_ v. _Clegg_, 16 M. & W. 321). Such a state of affairs, however, is hardly likely to arise, inasmuch as, in the absence of specific appropriation, earlier drawings out are attributed to the earlier payments in, as in the ordinary case of current accounts, and so the items on the credit and debit side cancel each other. An apparent exception to this system of appropriation exists in cases where a man wrongfully pays into his own account moneys held by him in a fiduciary capacity. In such circumstances he is presumed to have drawn out his own moneys rather than those affected by the trust, and so long as the account is in credit, any balance will be attributed to the trust money. As between contending claims to the money, based on different breaches of trust, the ordinary rule of appropriation will apply.

[Sidenote: Cheques.]

It has often been suggested that the only method of withdrawing money from a banker is by cheque, that the presentation of a cheque is a condition precedent to the liability of the banker to repay. This is not so; such view being inconsistent with the cases establishing the effect of the Statute of Limitations on money left in a banker's hands, and with the numerous cases in which a balance at a bank has been attached as a simple and unconditional debt by a garnishee order, as, for instance, in _Rogers_ v. _Whiteley_, 1892, A.C. 118. The banker's position with regard to cheques is that, superadded to the relation of debtor and creditor, there is an obligation to honour the customer's cheques provided the banker has a sufficient and available balance in his hands for the purpose (_Foley_ v. _Hill_). If, having such funds in his hands, the banker dishonours a cheque, he is liable to the customer in substantial damages without proof of actual injury having accrued (_Rolin_ v. _Steward_, 14 C.B. 595). Where several cheques are presented simultaneously and the available balance is insufficient to pay all, the banker should pay as many as the funds will cover, and is not bound to discriminate between particular cheques. It would seem a legitimate condition that a cheque should be drawn in the ordinary recognized form, not in one raising any question or doubt as to its validity or effect. Cheques drawn to "wages or order," "petty cash or order," or the like, are common, and are sometimes regarded as payable to bearer. Such payees are not, however, "fictitious or non-existent persons," so as to render the cheques payable to the bearer under sec. 7, subs. 3 of the Bills of Exchange Act 1882, nor can such payees endorse. Some banks refuse to pay such cheques, and it is conceived they are justified in so doing. Money paid in so shortly before the presentation of the cheque that there would not have been time to pass it through the books of the bank would not be treated as available for drawing against. If a person have an account at one branch of a bank, he is not entitled to draw cheques on another branch [v.03 p.0350] where he has either no account or is overdrawn, but the bank has, as against the customer, the right to combine accounts at different branches and treat them as one account (_Garnet_ v. _McEwen_, L.R. 8 Ex. 10). Funds are not available so long as a garnishee order, founded on a judgment against the customer, is pending, since it attaches all moneys on current account irrespective of the amount of the judgment (_Rogers_ v. _Whiteley_).

The very questionable practice of post-dating cheques has been the source of considerable doubt and inconvenience to bankers. The use of such documents enables the drawer to obtain the results of a bill at a fixed future date without the expense of a regular bill-stamp. But the Bills of Exchange Act 1882, sec. 13, subs. 1, provides that "a bill is not invalid by reason only that it is ante-dated or post-dated, or that it bears date on a Sunday." The banker cannot therefore refuse to pay a cheque presented after the apparent date of its issue on the ground that he knows it to have been post-dated. On the other hand, he is entitled and indeed bound to refuse payment if such a cheque is presented before the apparent date of its issue (_Morley_ v. _Culverwell_, 7 M. & W. at p. 178). Revocation of authority to pay a cheque must come to the banker's conscious knowledge and be unequivocal both in terms and method of communication. He is not bound to act on an unconfirmed telegram (_Curtice_ v. _London City & Midland Bank_ [1908], 1 K.B. 293). The banker's authority to pay cheques is terminated by the death, insanity or bankruptcy of the customer, or by notice of an available act of bankruptcy committed by him.

The banker is bound to observe secrecy with respect to the customer's account, unless good cause exists for disclosure, and the obligation does not cease if the account becomes overdrawn (_Hardy_ v. _Veasey_, L.R. 3 Ex. 107). In England a cheque is not an assignment of funds in the banker's hands (Bills of Exchange Act 1882, sec. 53). The holder of the cheque has therefore no claim on the banker in the event of payment being refused, his remedy being against the drawer and endorser, if any. On this section is also based the custom of English bankers not to pay part of the amount of a cheque where there are funds, though not sufficient to meet the whole amount. The section does not apply to Scotland, where it would seem that the bank is bound to pay over what funds it has towards satisfaction of the cheque. A banker is entitled to hold paid cheques as vouchers until there has been a settlement of account between him and the customer. The entries in a pass-book constitute _prima facie_ evidence against the banker, and when returned by the customer without comment, against him; but the proposition that such return constitutes a settlement of account has been much disputed. Indeed where forgery is the ground of repudiation of a cheque, no dealings or omissions of the customer with regard to the pass-book would seem to preclude him from objecting to being debited and throwing the loss on the banker (_Kepitigalla Rubber Co._ v. _National Bank of India_, 25 Times L.R. 402). As against the banker, however, credit entries in the pass-book cannot be disputed if the customer has altered his position in reliance thereon, and cheques drawn against an apparent balance must be honoured (_Holland_ v. _Manchester & Liverpool District Bank_, 25 Times L.R. 386).

The rule by which the holder of a cheque has no direct recourse against the banker who dishonours it, holds good even where the banker has before issue marked the cheque as good for the amount, such marking not amounting to an acceptance by the banker. As between banker and banker, however, such marking or certifying probably amounts to a binding representation that the cheque will be paid, and, if done by request of the drawer, the latter cannot subsequently revoke the authority to pay. In certain circumstances, marking at the instance of the person presenting the cheque for payment may amount to an undertaking by the banker to hold the money for his benefit (_In re Beaumont_ [1902], 1 Ch. p. 895).

A banker either paying or collecting money on a cheque to which the person tendering it for payment or collection has no title or a defective title is _prima facie_ liable to the true owner for conversion or money had and received, notwithstanding he acted in perfect good faith and derived no benefit from the operation. Payment of an open cheque, payable to bearer either originally or by endorsement, is, however, in all cases a good payment and discharge (_Charles_ v. _Blackwell_, 2 C.P.D. at p. 158). Limited protection in other cases has been extended by legislation to the banker with regard to both payment and collection of cheques, usually on the principle of counterbalancing some particular risk imposed on him by enactments primarily designed to safeguard the public.

By sec. 19 of the Stamp Act 1853, the banker paying a draft or order payable to order on demand, drawn upon him, was relieved from liability in the event of the endorsement having been forged or unauthorized. This enactment was not repealed by the Bills of Exchange Act 1882, and, in _London City & Midland Bank_ v. _Gordon_ (1903), A.C. 240, was held to cover the case of drafts drawn by a branch of a bank on its head office. Sec. 60 of the Bills of Exchange Act 1882 extends like protection to the banker in the case of cheques, the definition of which therein as "bills drawn on a banker payable on demand" debars drafts of the above-mentioned description. Such definition, involving the unconditional character of the instrument, also precludes from the protection of this section the documents now frequently issued by corporations and others, which direct bankers to make payments on a specific attached receipt being duly signed (_London City & Midland Bank_ v. _Gordon_). Sec. 17 of the Revenue Act 1883, however, applies to these documents the crossed cheques sections of the Bills of Exchange Act 1882 (see _Bavius, Jr., & Sims_ v. _London & South-Western Bank_ [1900], 1 Q.B. 270), while denying them the position of negotiable instruments, and a banker paying one of them crossed, in accordance with the crossing and in the absence of any indication of its having been transferred, could probably claim immunity under sec. 80. The Bills of Exchange Act 1882 contains no direct prohibition against a banker paying a crossed cheque otherwise than in accordance with the crossing, but if he do so he is liable to the true owner for any loss suffered by him in consequence of such payment (sec. 79), and is probably unable to charge his customer with the amount. A banker paying a crossed cheque in accordance with its ostensible tenor obtains protection under sec. 80 and the proviso to sec. 79. Questions have arisen as to the bearing of the crossed cheques sections when a crossed cheque drawn on one branch of a bank is paid in for collection by a customer at another branch; but the transaction is so obviously a legitimate and necessary one that either by the collecting branch may be regarded as a separate bank for this purpose, or sec. 79 may be ignored as inapplicable (_Gordon_ v. _London City & Midland Bank_ [1902], 1 K.B. 242 C.A.).

The collection of crossed cheques for a customer being virtually incumbent on a banker, qualified immunity is accorded him in so doing by sec. 82, a final exposition of which was given by the House of Lords in _London City & Midland Bank_ v. _Gordon_ (1903), A.C. 240. To come within its provisions, the banker must fulfil the following conditions. He must receive the cheque from, and the money for, a customer, _i.e._ a person with whom he has definite and existing business relations (see _Great Western Ry. Co._ v. _London & County Bank_ [1901], A.C. 414). He must take the cheque already crossed generally or specially to himself. His own crossing under sec. 77 is absolutely inefficacious in this connexion. He must take the cheque and receive the money in good faith and without negligence. Negligence in this relation is the omission to exercise due care in the interest of the true owner, not necessarily the customer. To avoid this disqualification of negligence, the banker must see that the endorsements, where necessary, are ostensibly correct; he must satisfy himself of the authority where an endorsement is per procuration; he must not take for private account a cheque which on its face indicates that the holder is in possession of it as agent, or in an official capacity, or for partnership purposes (_Hannan's Lake View Central Ld._ v. _Armstrong & Co._, 16 Times L.R. 236; _Bevan_ v. _National Bank_, 23 Times L.R. 65); he must not take a cheque marked "account payee" for an account other than that [v.03 p.0351] indicated (_Bevan_ v. _National Bank_). It is further demonstrated by the Gordon case that the banker only secures protection so long as he is acting strictly as a conduit pipe, or as agent for the customer. If he put himself in the position of owner of the cheque, he no longer fulfils the condition of receiving the money only for the customer. In the Gordon case, adoption of the not uncommon practice of crediting cheques as cash in the bank's books before the money was actually received was held equivalent to taking them as transferee or owner, and to debar the bank from the protection of sec. 82. The anxiety and inconvenience caused to bankers by this unexpected decision was ultimately removed by the Bills of Exchange (Crossed Cheques)

## Act 1906, which enacts that a banker receives payment of a crossed cheque

for a customer within the meaning of sec. 82 of the Bills of Exchange Act 1882, notwithstanding that he credits his customer's account with the amount of the cheque before receiving payment thereof. Apparently the scope of this act must be confined to its immediate object, and it does not affect the relations and rights between the banker and his customer or

## parties to the cheque arising from such crediting as cash. For instance,

the customer, in the absence of agreement to the contrary, may at once draw against cheques so credited, while the banker may still debit the customer with the amount of the cheque if returned unpaid, or sue the drawer or indorser thereon.

The protection to the collecting banker is in no way affected by the cheque being crossed "not negotiable," or by the nature of the fraud or crime by which the cheque was obtained by the customer or any previous possessor, although there are dicta which have been interpreted in the contrary sense. Nor does the fact that the customer is overdrawn deprive the banker of the character of a collecting agent, unless the cheque be definitely given and taken in reduction of such overdraft. Where the conditions requisite for protection exist, the protection covers not only the receipt of the money, but all operations usual in business and leading up to such receipt, on the basis of the customer's title being unimpeachable. The provisions of the crossed cheques sections of the Bills of Exchange Act 1882 are extended to dividend warrants by sec. 95 of that act, and to certain orders for payment issued by a customer of a banker by sec. 17 of the Revenue Act 1883, as before stated. But the wording of the Bills of Exchange (Crossed Cheques)

## Act 1906, specifying as it does cheques alone, appears to exclude documents

of both these classes from its operation. With regard to the orders for payment, inasmuch as the same section which brings them within the crossed cheques sections expressly provides that they shall not be negotiable, a banker would probably be protected only in taking them from the specified payee, though this distinction has been ignored in some recently decided cases.

[Sidenote: Fraud.]

Where a banker incurs loss through forgery or fraud in circumstances not covered by statutory protection, his right to relief, if any, must depend on general principles. He cannot charge his customer with payments made on a forgery of that customer's signature, on the ground either that he is presumed to know such signature or that the payment is unauthorized. But if the customer has accredited the forgery, or, having knowledge or reasonable ground for belief that it has been committed, has failed to warn the banker, who has thereby suffered loss or prejudice, the customer will be held estopped from disputing the banker's right to debit him with the amount (_Vagliano_ v. _Bank of England_ [1891], A.C. 107; _McKenzie_ v. _British Linen Co._ 6 A.C. 82; _Ewing_ v. _Dominion Bank_ [1904], A.C. 806). The doctrine of the fictitious person as payee may also exonerate a banker who has paid an order bill to a wrongful possessor. Payment on a forgery to an innocent holder is payment under mistake of fact; but the ordinary right of the payor to recover money so paid is subordinated to the necessity of safeguarding the characteristics of negotiability. Views differ as to whether the recovery is precluded only where the opportunity of giving notice of dishonour is lost or prejudiced by delay in reclaiming payment, or whether mere possibility of damage is sufficient (cf. _London & River Plate Bank_ v. _Bank of Liverpool_ [1896], 1 Q.B. 7, and _Imperial Bank of Canada_ v. _Bank of Hamilton_ [1903], A.C. 49).

Cases have frequently arisen where the carelessness of a customer in filling up cheques has enabled a person to fraudulently increase the sum for which such cheques were originally drawn. In _Colonial Bank of Australasia_ v. _Marshall_ [1906], A.C. 559, the judicial committee of the privy council held that the affording such facilities for forgery was no breach of the customer's duty to his banker, and that the latter was not entitled to debit the customer with more than the original amount. As before stated, the customer's dealings with the pass-book cannot, in the present state of the authorities, be relied on as debarring him from disputing unauthorized payments appearing therein.

[Sidenote: Custody of valuables.]

The payment of bills accepted payable at the bank is not, like the payment of cheques, an essential obligation of the banker, and the risk involved is enhanced by the fact that the banker must pay or refuse payment at once, no interval being allowed for verification of endorsements. The abolition or modification of the practice has frequently been advocated, but it is one of the facilities which competition compels bankers to extend to their customers. On the same basis stands the receipt of a customer's valuables for safe custody. The question of the banker's responsibility for the loss of goods so deposited with him was raised, but not decided, in an action brought by Mrs Langtry against the Union Bank of London in 1896. Certain jewels belonging to her had been delivered up by the bank to an unauthorized person on a forged order. The case was settled; but bankers being desirous to ascertain their real position, many legal opinions were taken on the point, and after consideration of these, the Central Association of Bankers issued a memorandum, in which they stated that the best legal opinion appeared to be that a distinction must be drawn between cases in which valuables were by mistake delivered to the wrong person and cases in which they were destroyed, lost, stolen or fraudulently abstracted, whether by an officer of the bank or some other person. That in the former case the question of negligence did not arise, the case being one of wrongful conversion of the goods by a voluntary act for which the bank was liable apart from any question of negligence. That, in the second case, that of loss or theft, the banker, being a gratuitous bailee, would only be liable if he had failed to use such care as an ordinary prudent man would take of valuables of his own. The latter rule is practically that laid down in _Giblin_ v. _MacMullen_, L.R. 2 P.C. 318, but in estimating the amount of care to be taken by the banker, the nature of the goods, if known or suspected, and the exceptional means of protection at the disposition of bankers, such as strong-rooms, must be taken into consideration. Methods of obviating both classes of risk by means of special receipts have frequently been suggested, but such receipts do not appear to have come into general use.

[Sidenote: Trustees.]

Theoretically, bankers are supposed to refuse accounts which are either expressedly or are known to be trust accounts. In practice, however, it is by no means uncommon to find accounts opened with a definite heading indicating the fiduciary capacity. In other cases, circumstances exist which affect the banker with notice of that capacity. In either case, however, the obligation to honour the customer's cheque is the predominant factor, and the banker is not bound or entitled to question the propriety or object of the cheque, unless he has very clear evidence of impending fraud (_Gray_ v. _Johnston_, L.R. 3 H. of L. 1). Even though the banker have derived some personal benefit from the transaction, it cannot be impeached unless the banker's conduct amount in law to his being party or privy to the fraud, as where he has stipulated or pressed for the settlement or reduction of an ascertained overdraft on private account, which has been effected by cheque on the trust account (_Coleman_ v. _Bucks & Oxon Union Bank_ [1897], 2 Ch. 243). A banker is entitled, in dealing with trust moneys, known to be such, to insist on the authority of the whole body of trustees, direct and not deputed, and this is probably the safest course to adopt. Scarcely larger responsibility devolves on Joint Stock Banks appointed custodian trustees under the Public Trustee Act 1906, [v.03 p.0352] a remunerative position involving custody of trust funds and securities, and making and receiving payments on behalf of the estate, while leaving the active direction thereof in the hands of the managing trustees.

[Sidenote: Bill-discounting.]

Other incidents of the ordinary practice of banking are the discounting of bills, the keeping of deposit accounts, properly so called, and the making of advances to customers, counting either by way of definite loan or arranged overdraft. So far as the discounting of bills is concerned, there is little to differentiate the position of the banker from that of any ordinary bill-discounter. It has been contended, however, that the peculiar attribute of the banker's lien entitled him to hold funds of the customer against his liability on current discounted bills. This contention was ultimately disposed of by _Bowen_ v. _Foreign & Colonial Gas Company_, 22 W.R. 740, where it was pointed out that the essential object of a customer's discounting bills with his banker was to feed the current account, and that a possible liability constituted no set-off against an existing debt. Whether a particular bill has been taken for discount or collection is a question of fact. As in the payment of bills, so in the collection of them, there is no statutory protection whatever for the banker; as against third parties he can only rely either on the customer's title or his own as a holder for value, if no forged endorsement intervene and he can establish a consideration.

[Sidenote: Deposit accounts.]

A deposit account, whether at call or on fixed notice, does not constitute any fiduciary relation between the depositor and the banker, but merely a debt due from the latter to the former. It has been suggested that cheques can be drawn against deposit account on call, and, though a banker might safely honour such a cheque, relying, if necessary, on his right of lien or set-off, there appears no legal right in the customer to enforce such payment. Deposit receipts given by bankers are exempt from stamp duty, even though they contain an undertaking with respect to payment of principal and interest. They are clearly not negotiable instruments, but it is difficult to deduce from the cases how far dealings with them may amount to an equitable assignment of the moneys they represent. Probably deliberate definite transfer, coupled with endorsement, would confer an effective title to such moneys. Where, as is not uncommon, the form of deposit note includes a cheque, the banker could not refuse to pay were the cheque presented and any superadded formalities complied with.

[Sidenote: Overdrafts and advances.]

There is no obligation on a banker to permit his customer to overdraw, apart from agreement express or implied from course of business. Drawing a cheque or accepting a bill payable at the banker's which there are not funds meet is an implied request for an overdraft, which the banker may or may not comply with. Interest is clearly chargeable on overdrafts whether stipulated for or not. There is no direct authority establishing this right in the banker, and interest is not usually recoverable on mere debts, but the charge is justifiable on the ground of the universal custom of bankers, if not otherwise. The charging of compound interest or interest with periodical rests has been supported where such system of keeping the accounts has been brought to the notice of the customer by means of the pass-book, and not objected to by him, but in the present attitude of the courts towards the pass-book some further recognition would seem necessary. Such system of charging interest, even when fully recognized, only prevails so long as the relation of banker and customer, on which it is founded, continues in force; the taking a mortgage for the existing debt would put an end to it.

[Sidenote: Lien.]

The main point in which advances made by bankers differ from those made by other people is the exceptional right possessed by bankers of securing repayment by means of the banker's lien. The banker's lien is part of the law merchant and entitles him, in the absence of agreement express or implied to the contrary, to retain and apply, in discharge of the customer's liability to him, any securities of the customer coming into his possession in his capacity as banker. It includes bills and cheques paid in for collection (_Currie_ v. _Misa_, 1 A.C. 564). Either by virtue of it, or his right of set-off, the banker can retain moneys paid in by or received for the credit of the customer, against the customer's debt to him. Goods deposited for safe custody or moneys paid in to meet particular bills are exempt from the lien, the purpose for which they come to the banker's hands being inconsistent with the assertion of the lien. The existence of the banker's lien entitles him to sue all parties to bills or cheques by virtue of sec. 27, subs. 3 of the Bills of Exchange Act, and to the extent of his advances his title is independent of that of the previous holder. Moreover, the banker's lien, though so termed, is really in effect an implied pledge, and confers the rights of realization on default pertaining to that class of bailment. But with regard to the exercise of his lien, as in many other phases of his relation to his customer, the banker's strict rights may be curtailed or circumscribed by limitations arising out of course of business. The principle, based either on general equity or estoppel and independent of definite agreement or consideration, requires that when dealings between banker and customer have for a reasonable space of time proceeded on a recognized footing, the banker shall not suddenly break away from such established order of things and assert his strict legal rights to the detriment of the customer. By the operation of this rule, the banker may be precluded from asserting his lien in particular cases, as for instance for an overdraft on one account against another which had habitually been kept and operated on separately. It equally prevents the dishonouring of cheques in circumstances in which they have hitherto been paid independent of the actual available balance.

Restrictions arising from course of business can of course be put an end to by the banker, but only on reasonable notice to the customer and by providing for outstanding liabilities undertaken by the latter in reliance on the continuance of the pre-existing state of affairs (see _Buckingham_ v. _London & Midland Bank_, 12 Times L.R. 70). As against this, the banker can, in some cases, fortify his position by appeal to the custom of bankers. The validity of such custom, provided it be general and reasonable, has frequently been recognized by the courts. Any person entering on business relations with a banker must be taken to contemplate the existence of such custom and implicitly agree that business shall be conducted in accordance therewith. Practical difficulty has been suggested with regard to proof of any such custom not already recognized in law, as to how far it can be established by the evidence of one party, the bankers, unsupported by that of members of the outside public, in most cases impossible to obtain. It is conceived, however, that on the analogy of local custom and the Stock Exchange rules, such outside evidence could be dispensed with, and this is the line apparently indicated with relation to the pass-book by the court of appeal in Vagliano's case (23 Q.B.D. at p. 245). The unquestionable right of the banker to summarily debit his customer's account with a returned cheque, even when unindorsed by the customer and taken by the banker in circumstances constituting him a transferee of the instrument, is probably referable to a custom of this nature. So is the common practice of bankers to refuse payment of a so-called "stale" cheque, that is, one presented an unreasonable time after its ostensible date; although the fact that some banks treat a cheque as stale after six months, others not till after twelve, might be held to militate against the validity of such custom, and lapse of time is not included by the Bills of Exchange Act among the matters working revocation of the banker's duty, and authority to pay his customer's cheque. Indirectly, this particular custom obtains some support from sec. 74 (2) of the Bills of Exchange Act, although the object of that section is different.

That section does, however, import the custom of bankers into the reckoning of a reasonable time for the presentation of a cheque, and with other sections clears up any doubts which might have arisen on the common law as to the right of the holder of a cheque, whether crossed or not, to employ his banker for its collection, without imperilling his rights against prior

## parties in case of dishonour. On dishonour of a cheque paid in for [v.03

p.0353] collection, the banker is bound to give notice of dishonour. Being in the position of an agent, he may either give notice to his principal, the customer, or to the parties liable on the bill. The usual practice of bankers has always been to return the cheque to the customer, and sec. 49, subs. 6 of the Bills of Exchange Act is stated to have been passed to validate this custom. Inasmuch as it only provides for the return of the dishonoured bill or cheque to the drawer or an endorser it appears to miss the case of a cheque to bearer or become payable to bearer by blank endorsement prior to the customer's.

Where a bank or a banker takes a mortgage, legal or equitable, or a guarantee as cover for advances or overdraft, there is nothing necessarily differentiating the position from that of any other mortgagee or guaranteed party. It has, however, fallen to banks to evoke some leading decisions with respect to the former class of security. In _London Joint Stock Bank_ v. _Simmons_ ([1892], A.C. 201) the House of Lords, professedly explaining their previous decision in _Sheffield_ v. _London Joint Stock Bank_, 13 A.C. 333, determined that negotiable securities, commercial or otherwise, may safely be taken in pledge for advances, though the person tendering them is, from his known position, likely to be holding them merely as agent for other persons, so long as they are taken honestly and there is nothing tangible, outside the man's position, to arouse suspicion. So again in _Lloyd's Bank_ v. _Cooke_ [1907], 1 K.B. 794, the bank vindicated the important principle that the common law of estoppel still obtains with regard to bills, notes and cheques, save where distinctly annulled or abrogated by the Bills of Exchange Act, and that therefore a man putting inchoate negotiable instruments into the hands of an agent for the purpose of his raising money thereon is responsible to any one taking them bona fide and for value, 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 _Vorträge und Aufsätze hauptsächlich aus dem Handels- und Wechselrecht_, von Dr R. Koch, pp. 163-164.

[6] The imperial treasury is bound to pay the state notes in cash at any time when this is required, but an independent fund of cash set apart for this purpose does not exist. See _Handwörterbuch der Staatswissenschaften_, vol. v. art. "Papiergeld," p. 97 (Jena, 1893; ed. J. Conrad, L. Elster, W. Lexis and E. Löning).

BANKSIA, an Australian genus of shrubs and trees (natural order Proteaceae), with leathery leaves often deeply cut and handsome dense spikes of flowers. It is named after Sir Joseph Banks (_q.v._). The plants are grown in England for their handsome foliage as evergreen greenhouse shrubs.

BANKURA, a town and district of British India, within the Burdwan division of Bengal. The town has a population of 20,737. The district has an area of 2621 sq. m., and in 1901 its population was 1,116,411, showing an increase of 4% in the decade. It is bounded on the N. and E. by Burdwan district; on the S. by Midnapur district; and on the W. by Manbhum district. Bankura forms a connecting link between the delta of the Ganges on the E. and the mountainous highlands of Chota Nagpur on the W. Along its eastern boundary adjoining Burdwan district the country is flat and alluvial, presenting the appearance of the ordinary paddy lands of Bengal. Going N. and W., however, the surface gradually rises into long undulating tracts; rice lands and swamps give way to a region of low thorny jungle or forest trees; the hamlets become smaller and more scattered, and nearly disappear altogether in the wild forests along the western boundary. Large quantities of lac and tussur silk are gathered in the hilly tract. The stone quarries and minerals are little worked. There are indigo factories and two coal-mines. Both cotton and silk are woven, and plates, &c., are carved from soap-stone. The old capital of the country was at Bishnupur, which is still the chief centre of local industries. The north-east part of the district is skirted by the East Indian railway beyond the river Damodar. The Midnapur-Jherria line of the Bengal-Nagpur railway passes through the district, and there is a line from Howrah to Bankura. The climate of Bankura is generally healthy, the cold season being bracing, the air wholesome and dry, and fogs of rare occurrence. The district is exposed to drought and also to destructive floods. It suffered in the famines of 1866, 1874-1875 and 1896-1897. The temperature in the hot season is very oppressive and relaxing. The Bishnupur raj was one of the largest estates in Bengal in the end of the 18th century, but it was sold for arrears of revenue shortly after the conclusion of the permanent settlement in 1793.

BANN, the principal river in the north of Ireland. Rising in the Mourne mountains in the south of the Co. Down it runs N.W. until it enters Lough Neagh (_q.v._), which it drains N.N.W. to an estuary at Coleraine, forming Lough Beg immediately below the larger lough. The length of its valley (excluding the lesser windings of the river) is about 90 m. The total drainage area, including the other important feeders of Lough Neagh, is about 2300 sq. m., extending westward to the confines of the Co. Fermanagh, and including parts of the Cos. Down and Antrim, Armagh and Monaghan, Tyrone and Londonderry. The river has valuable salmon fisheries, but is not of much importance for navigation. Above Lough Neagh it is known as the Upper Bann and below as the Lower Bann.

BANNATYNE, GEORGE (1545-?1608), collector of Scottish poems, was a native of Newtyle, Forfarshire. He became an Edinburgh merchant and was admitted a burgess in 1587. Some years earlier, in 1568, when the "pest" raged in the capital, he retired to his native county and amused himself by writing out copies of poems by 15th and early 16th century Scots poets. His work extended to eight hundred folio pages, divided into five parts. The MS. descended to his only daughter Janet, and later to her husband's family, the Foulises of Woodhall and Ravelston, near Edinburgh. From them it passed to the Advocates' library, where it is still preserved. This MS., known as the "Bannatyne Manuscript," constitutes with the "Asloan" and "Maitland Folio" MSS. the chief repository of Middle Scots poetry, especially for the texts of the greater poets Henryson, Dunbar, Lyndsay and Alexander Scott. Portions of it were reprinted (with modifications) by Allan Ramsay in his _Ever Green_ (1724), and later, and more correctly, by Lord Hailes in his _Ancient Scottish Poems_ (1770). The entire text was issued by the Hunterian Club (1873-1902) in a handsome and generally accurate form. The name of Bannatyne was honoured in 1823 by the foundation in Edinburgh of the Bannatyne Club, devoted to the publication of historical and literary material from Scottish sources. The thirty-third issue of the club (1829) was _Memorials of George Bannatyne_ (1545-1608), with a memoir by Sir Walter Scott and an account of the MS. by David Laing.

See also Gregory Smith, _Specimens of Middle Scots_ (1902).

BANNERET (Fr. _banneret_, from _bannière_, banner, elliptical for _seigneur_ or _chevalier banneret_, Med. Lat. _banneretus_), in feudalism, the name given to those nobles who had the right to lead their vassals to battle under their own banner. Ultimately bannerets obtained a place in the feudal hierarchy between [v.03 p.0354] barons and knights bachelors, which has given rise to the idea that they are the origin of King James I.'s order of baronets. Selden, indeed, points out that "the old stories" often have _baronetti_ for _bannereti_, and he points out that in France the title had become hereditary; but he himself is careful to say (p. 680) that banneret "hath no relation to this later title." The title of knight banneret, with the right to display the private banner, came to be granted for distinguished service in the field. "No knight banneret," says Selden, of the English custom, "can be created but in the field, and that, when either the king is present, or at least his royal standard is displayed. But the creation is almost the self-same with that in the old French ceremonies by the solemn delivery of a banner charged with the arms of him that is to be created, and the cutting of the end of the pennon or streamer to make it a square or into the shape of a banner in case that he which is to be created had in the field his arms on a streamer before the creation." The creation of bannerets is traceable, according to Selden, to the time of Edward I. "Under these bannerets," he adds, "divers knights bachelors and esquires usually served; and according to the number of them, the bannerets received wages." The last authentic instance of the creation of a knight banneret was that of John Smith, created banneret at the battle of Edgehill by Charles I. for rescuing the royal standard from the enemy.

See Selden, _Titles of Honor_ (3rd ed., London, 1672), p. 656; Du Cange, _Glossarium_ (Niort, 1883), s.v. "Bannereti."

BANNERS, FEAST OF (Jap. _Nobori-no-Sekku_), a Japanese festival in honour of male children held on the 5th of May. Every householder who has sons fastens a bamboo pole over his door and hangs from it gaily-coloured paper fishes, one for each of his boys. These fishes are made to represent carp, which are in Japanese folklore symbolical of health and longevity. The day is recognized as a national holiday.

For banners in general see FLAG.

BANNISTER, CHARLES (1738-1804), English actor and singer, was born in Gloucestershire, and after some amateur and provincial experience made his first London appearance in 1762 as Will in _The Orators_ at the Haymarket. Gifted with a fine bass voice, Bannister acquired a reputation as a singer at Ranelagh and elsewhere, as well as an actor, and was received with such favour that Garrick engaged him for Drury Lane. He died on the 26th of October 1804.

His son JOHN BANNISTER (1760-1836), born at Deptford on the 12th of May 1760, first studied to be a painter, but soon took to the stage. His first formal appearance was at the Haymarket in 1778 as Dick in _The Apprentice_. The same year at Drury Lane he played in James Miller's version of Voltaire's _Mahomet_ the part of Zaphna, which he had studied under Garrick. The Palmira of the cast was Mrs Robinson ("Perdita"). Bannister was the best low comedian of his day. As manager of Drury Lane (1802) he was no less successful. He retired in 1815 and died on the 7th of November 1836. He never gave up his taste for painting, and Gainsborough, Morland and Rowlandson were among his friends.

See Adolphus's _Memoirs of John Bannister_ (2 vols., 1838).

BANNOCK (adapted from the Gaelic, and apparently connected with Lat. _panis_, bread), the term used in Scotland and the north of England for a large, flattish, round sort of bun or cake, usually made of barley-meal, but also of wheat, and sometimes with currants.

BANNOCK, the name of a county in the south-east of the state of Idaho, U.S.A., and of a river in the same state, which runs northward in Oneida county into the Snake or Lewis river. It is taken from that of the Bannock Indians (see BANATE), a corruption of the native _Panaiti_.

BANNOCKBURN, a town of Stirlingshire, Scotland. Pop. (1901) 2444. It is situated on the "burn" from which its name is derived, the Bannock (Gaelic, _ban oc_, "white, shining stream"), a right-hand affluent of the Forth, which was once a considerable river. The town lies 2¼ m. S.S.E. of Stirling by the Caledonian railway, and now has thriving manufactures of woollens (chiefly tweeds, carpets and tartans) and leather, though at the beginning of the 19th century it was only a village. The Bore Stone, in which Bruce planted his standard before the battle in which he defeated Edward II. in 1314 (see below), is preserved by an iron grating. A mile to the west is the Gillies' Hill, now finely wooded, over which the Scots' camp-followers appeared to complete the discomfiture of the English, to which event it owes its name. Bannockburn House was Prince Charles Edward's headquarters in January 1746 before the fight at Falkirk.

The famous battle of Bannockburn (24th June 1314) was fought for the relief of Stirling Castle, which was besieged by the Scottish forces under Robert Bruce. The English governor of Stirling had promised that, if he were not relieved by that date, he would surrender the castle, and Edward II. hastily collected an army in the northern and midland counties of England. Bruce made no attempt to defend the border, and selected his defensive position on the Bannock Burn, 2½ m. S. of Stirling. His front was covered by the marshy bed of the stream, his left flank by its northerly bend towards the Forth, his right by a group of woods, behind which, until the English army appeared, the Scots concealed themselves. Two corps were left in the open in observation, one at St Ninian's to watch the lower course of the burn, one to guard the point at which the Falkirk-Stirling road crosses the burn. On the 23rd the van of the army of Edward, which numbered about 60,000 against the 40,000 of the Scots, appeared to the south of the burn and at once despatched two bodies of men towards Stirling, the first by the direct road, the other over the lower Bannock Burn near its junction with the Forth. The former was met by the Scottish outpost on the road, and here occurred the famous single combat in which Robert Bruce, though not fully armed for battle, killed Sir Henry Bohun. The English corps which took the other route was met and after a severe struggle defeated by the second Scottish outpost near St Ninian's. The English army assembled for battle on the following day. Early on St John's day the Scottish army took up its assigned positions. Three corps of pikemen in solid masses formed the first line, which was kept out of sight behind the crest until the enemy advanced in earnest. A line of "pottes" (military pits) had been previously dug to give additional protection to the front, which extended for about one mile from wing to wing. The reserve under Bruce consisted of a corps of pikemen and a squadron of 500 chosen men-at-arms under Sir Robert Keith, the marischal of Scotland. The line of the defenders was unusually dense; Edward, in forming up on an equal front with greatly superior numbers, found his army almost hopelessly cramped. The attacking army was formed in an unwieldy mass of ten "battles," each consisting of horse and foot, and the whole formed in three lines each of three "battles," with the tenth "battle" as a reserve in rear. In this order the English moved down into the valley for a direct attack, the cavalry of each "battle" in first line, the foot in second. Ignoring the lesson of Falkirk (_q.v._), the mounted men rode through the morass and up the slope, which was now crowned by the three great masses of the Scottish pikemen. The attack of the English failed to make any gap in the line of defence, many knights and men-at-arms were injured by falling into the pits, and the battle became a _mêlée_, the Scots, with better fortune than at Falkirk and Flodden, presenting always an impenetrable hedge of spears, the English, too stubborn to draw off, constantly trying in vain to break it down. So great was the press that the "battles" of the second line which followed the first were unable to reach the front and stood on the slope, powerless to take part in the battle on the crest. The advance of the third English line only made matters worse, and the sole attempt to deploy the archers was crushed with great slaughter by the charge of Keith's mounted men. Bruce threw his infantry reserve into the battle, the arrows of the English archers wounded the men-at-arms of their own side, and the remnants of the leading line were tired and disheartened when the final impetus to their rout was given by the historic charge of the "gillies," some thousands of Scottish camp-followers who suddenly emerged from the woods, blowing horns, waving such weapons as they possessed, and holding aloft [v.03 p.0355] improvised banners. Their cries of "slay, slay!" seemed to the wearied English to betoken the advance of a great reserve, and in a few minutes the whole English army broke and fled in disorder down the slope. Many perished in the burn, and the demoralized fugitives were hunted by the peasantry until they re-crossed the English border. One earl, forty-two barons and bannerets, two hundred knights, seven hundred esquires and probably 10,000 foot were killed in the battle and the pursuit. One earl, twenty-two barons and bannerets and sixty-eight knights fell into the hands of the victors, whose total loss of 4000 men included, it is said, only two knights.

See J. E. Shearer, _Fact and Fiction in the Story of Bannockburn_ (1909).

BANNS OF MARRIAGE (formerly _bannes_, from A.S. _gebann_, proclamation, Fr. _ban_, Med. Lat. _bannum_), the public legal notice of an impending marriage. The church in earliest days was forewarned of marriages (Tertullian, _Ad Uxorem, De Pudicitia_, c. 4). The first canonical enactment on the subject in the English church is that contained in the 11th canon of the synod of Westminster in London (A.D. 1200), which orders that "no marriage shall be contracted without banns thrice published in the church, unless by special authority of the bishop." It is, however, believed that the practice was in France as old as the 9th century, and certainly Odo, bishop of Paris, ordered it in 1176. Some have thought that the custom originated in the ancient rule that all "good knights and true," who elected to take part in the tournaments, should hang up their shields in the nearest church for some weeks before the opening of the lists, so that, if any "impediment" existed, they might be "warned off." By the Lateran Council of 1215 the publication of banns was made compulsory on all Christendom. In early times it was usual for the priest to betroth the pair formally in the name of the Blessed Trinity; and sometimes the banns were published at vespers, sometimes during mass. In the United Kingdom, under the canon law and by statute, banns are the normal preliminary to marriage; but a marriage may also be solemnized without the publication of banns, by obtaining a licence or a registrar's certificate. In America there is no statutory requirement; and the practice of banns (though general in the colonial period) is practically confined to the Roman Catholics.

BANNU, a town and district of British India, in the Derajat division of the North-West Frontier Province. The town (also called Edwardesabad and Dhulipnagar) lies in the north-west corner of the district, in the valley of the Kurram river. Pop. (1901) 14,300. It forms the base for all punitive expeditions to the Tochi Valley and Waziri frontier.

The district of Bannu, which only consists of the Bannu and Marwat tahsils since the constitution of the North-West Frontier Province in 1901, contains an area of 1680 sq. m. lying north of the Indus. The cis-Indus portions of Bannu and Dera Ismail Khan now comprises the new Punjab district of Mianwali. In addition to the Indus the other streams flowing through the district are the Kurram (which falls into the Indus) and its tributary the Gambila. The valley of Bannu proper, stretching to the foot of the frontier hills, forms an irregular oval, measuring 60 m. from north to south and about 40 m. from east to west. In 1901 the population was 231,485, of whom the great majority were Mahommedans. The principal tribes inhabiting the district are: (1) Waziri Pathans, recent immigrants from the hills, for the most part peaceable and good cultivators; (2) Marwats, a Pathan race, inhabiting the lower and more sandy portions of the Bannu valley; (3) Bannuchis, a mongrel Afghan tribe of bad physique and mean vices. The inhabitants of this district have always been very independent and stubbornly resisted the Afghan and Sikh predecessors of the British. After the annexation of the Punjab the valley was administered by Herbert Edwardes so thoroughly that it became a source of strength instead of weakness during the Mutiny. The inhabitants of the valley itself are now peaceful, but it is always subject to incursion from the Waziri tribes in the Tochi valley and the neighbouring hills. Salt is quarried on government account at Kalabagh and alum is largely obtained in the same neighbourhood. The chief export is wheat. A military road leads from Bannu town towards Dera Ismail Khan. The Indus, which is nowhere bridged within the district, is navigable for native boats throughout its course of 76 m. The chief frontier tribes on the border are the Waziris, Battannis and Dawaris. All these are described under their separate names.

BANSDA, a native state in the south Gujarat division of Bombay, India, belonging to the Surat agency. Area, 215 sq. m. Pop. (1901) 40,382, showing a decrease of 2% in the decade; estimated revenue £19,508. Its chief is a rajput. About half the total area of the state is cultivable, but the bulk is forested.

BANSHEE (Irish _bean sidhe_; Gaelic _ban sith_, "woman of the fairies"), a supernatural being in Irish and general Celtic folklore, whose mournful screaming, or "keening," at night is held to foretell the death of some member of the household visited. In Ireland legends of the banshee belong more particularly to certain families in whose records periodic visits from the spirit are chronicled. A like ghostly informer figures in Brittany folklore. The Irish banshee is held to be the distinction only of families of pure Milesian descent. The Welsh have the banshee under the name _gwrach y Rhibyn_ (witch of Rhibyn). Sir Walter Scott mentions a belief in the banshee as existing in the highlands of Scotland (_Demonology and Witchcraft_, p. 351). A Welsh death-portent often confused with the gwrach y Rhibyn and banshee is the _cyhyraeth_, the groaning spirit.

See W. Wirt Sikes, _British Goblins_ (1880).

BANSWARA (literally "the forest country"), a rajput feudatory state in Rajputana, India. It borders on Gujarat and is bounded on the N. by the native states of Dungarpur and Udaipur or Mewar; on the N.E. and E. by Partabgarh; on the S. by the dominions of Holkar and the state of Jabua and on the W. by the state of Rewa Kantha. Banswara state is about 45 m. in length from N. to S., and 33 m. in breadth from E. to W., and has an area of 1946 sq. m. The population in 1901 was 165,350. The Mahi is the only river in the state and great scarcity of water occurs in the dry season. The Banswara chief belongs to the family of Udaipur. During the vigour of the Delhi empire Banswara formed one of its dependencies; on its decline the state passed under the Mahrattas. Wearied out by their oppressions, its chief in 1812 petitioned for English protection, on the condition of his state becoming tributary on the expulsion of the Mahrattas. The treaty of 1818 gave effect to this arrangement, Britain guaranteeing the prince against external enemies and refractory chiefs; he, on his part, pledging himself to be guided by her representative in the administration of his state. The chief is assisted in the administration by a _hamdar_ or minister. The estimated gross revenue is £17,000 and the tribute £2500. The custom of suttee, or widow-burning, has long been abolished in the state, but the people retain all their superstitions regarding witches and sorcery; and as late as 1870, a Bhil woman, about eighty years old, was swung to death at Kushalgarh on an accusation of witchcraft. The perpetrators of the crime were sentenced to five years' rigorous imprisonment, but they had the sympathy of the people on their side. The chief town is Banswara, situated about 8 m. W. of the Mahi river, surrounded by an old disused rampart and adorned by various Hindu temples, with the battlements of the chief's palace overlooking it. Its population in 1901 was 7038. The petty state of Kushalgarh is feudatory to Banswara.

BANTAM, the westernmost residency of the island of Java, Dutch East Indies, bounded W. by the Strait of Sunda, N. by the Java sea, E. by the residencies of Batavia and Preanger, and S. by the Indian Ocean. It also includes Princes Island and Dwars-in-den-weg ("right-in-the-way") Island in Sunda Strait, as well as several smaller islands along the coasts. Bantam had a population in 1897 of 709,339, including 302 Europeans, 1959 Chinese and 89 Arabs and other Asiatic foreigners. The natives are Sundanese, except in the northern or Serang division, where they are Javanese. The coast is low-lying and frequently marshy. The northern portion of the residency constitutes the most fertile portion, is generally flat with a hilly group in the middle, where the two inactive volcanoes, Karang and Pulosari, [v.03 p.0356] are found, while the north-western corner is occupied by the isolated Gede Mountain. The southern portion is covered by the Kendang (Malay for "range") Mountains extending into the Preanger. The rivers are only navigable at their mouths. Various geysers and cold and warm sulphur springs are found in the centre of the residency, and on a ridge of the Karang Mountain is the large crater-lake Dano, a great part of which was drained by the government in 1835 for rice cultivation. Pulse (_kachang_), rice and coffee are the principal products of cultivation; but in the days of government culture sugar, indigo and especially pepper were also largely grown. The former considerable fishing and coasting trade was ruined by the eruption of Krakatoa in 1883, a large stretch of coast line and the seaport towns of Charingin and Anjer being destroyed by the inundation. The prosperity of the residency was further affected by a cattle plague in 1879, followed by a fever epidemic which carried off 50,000 people, and except in the rice season there is a considerable emigration of natives. Bantam contains five native regencies or territorial divisions, namely, Serang, Anjer, Pandeglang, Charingin, Lebak. The principal towns are Serang, the capital of the residency, Chilegon, Pandeglang, Menes and Rangkas Betug. The chief town, Serang, is situated 2½ m. from Bantam Bay on the high road from Batavia. The port of Serang is Karangantu, on Bantam Bay, and close by is the old ruined town of Bantam, once the capital of the kingdom of Bantam, and before the foundation of Batavia the principal commercial port of the Dutch East India Company. The ruins include the remains of the former pepper warehouses, the old factory, called Fort Speelwijk, belonging to the company, the fortified palace of the former sultans and a well-preserved mosque thought to have been built by the third Mahommedan ruler of Bantam about 1562-1576, and containing the tombs of various princes of Bantam. Before the Dutch conquest Bantam was a powerful Mahommedan state, whose sovereign extended his conquests in the neighbouring islands of Borneo and Sumatra. In 1595 the Dutch expelled the Portuguese and formed their first settlement. A British factory was established in 1603 and continued to exist till the staff was expelled in 1682. In 1683 the Dutch reduced the sultan to vassalage, built the fort of Speelwijk and monopolized the port, which had previously been free to all comers; and for more than a century afterwards Bantam was one of the most important seats of commerce in the East Indies. In 1811 after Batavia had surrendered to the British, Bantam soon followed; but it was restored to the Dutch in 1814. Two years later, however, they removed their chief settlement to the more elevated station of Serang, or Ceram, 7 m. inland, and in 1817 the ruin of Bantam was hastened by a fire.

For "Bantam" fowls see POULTRY.

BANTIN, or BANTING, the native name of the wild ox of Java, known to the Malays as sapi-utan, and in zoology as _Bos (Bibos) sondaicus._ The white patch on the rump distinguishes the bantin from its ally the gaur (_q.v._). Bulls of the typical bantin of Java and Borneo are, when fully adult, completely black except for the white rump and legs, but the cows and young are rufous. In Burma the species is represented by the tsaine, or h'saine, in which the colour of the adult bulls is rufous fawn. Tame bantin are bred in Bali, near Java, and exported to Singapore. (See BOVIDAE.)

BANTRY, a seaport, market-town and seaside resort of Co. Cork, Ireland, in the west parliamentary division, 58 m. S.W. of Cork by the Cork, Bandon & South Coast railway, on the bay of the same name. Pop. (1901) 3109. It is an important centre both for sea fisheries and for sport with the rod. It is the terminus of the railway, and a coaching station on the famous "Prince of Wales" route (named after King Edward VII.) from Cork to Glengarriff and Killarney. The bay, with excellent anchorage, is a picturesque inlet some 22m. long by 3 to 6 broad, with 12 to 32 fathoms of water. It is one of the headquarter stations of the Channel Squadron, which uses the harbour at Castletown Bearhaven on the northern shore, behind Bear Island, near the mouth of the bay. It was the scene of attempts by the French to invade Ireland in 1689 and 1796, and troops of William of Orange were landed here in 1697. There are several islands, the principal of which are Bear Island and Whiddy, off the town. Ruins of the so-called "fish palaces" testify to the failure of the pilchard fishery in the 18th century.

BANTU LANGUAGES. The greater part of Africa south of the equator possesses but one linguistic family so far as its native inhabitants are concerned. This clearly-marked division of human speech has been entitled the Bantu, a name invented by Dr W. H. I. Bleek, and it is, on the whole, the fittest general term with which to designate the most remarkable group of African languages.[1]

It must not be supposed for a moment that all the people who speak Bantu languages belong necessarily to a special and definite type of negro. On the contrary, though there is a certain physical resemblance among those tribes who speak clearly-marked Bantu dialects (the Babangi of the upper Congo, the people of the Great Lakes, the Ova-herero, the Ba-tonga, Zulu-Kaffirs, Awemba and some of the East Coast tribes), there is nevertheless a great diversity in outward appearance, shape of head and other physical characteristics, among the negroes who inhabit Bantu Africa. Some tribes speaking Bantu languages are dwarfs or dwarfish, and belong to the group of Forest Pygmies. Others betray relationship to the Hottentots; others again cannot be distinguished from the most exaggerated types of the black West African negro. Yet others again, especially on the north, are of Gala (Galla) or Nilotic origin. But the general deduction to be drawn from a study of the Bantu languages, as they exist at the present day, is that at some period not more than 3000 years ago a powerful tribe of negroes speaking the Bantu mother-language, allied physically to the negroes of the south-western Nile and southern Lake Chad basins (yet impregnated with the Caucasian Hamite), pushed themselves forcibly from the very heart of Africa (the region between the watersheds of the Shari, Congo and western Nile) into the southern half of the continent, which at that time was probably sparsely populated except in the north-west, east and south. The Congo basin and the south-western watershed of the Nile at the time of the Bantu invasion would have been occupied on the Atlantic seaboard by West Coast negroes, and in the centre by negroes of a low type and by Forest Pygmies; the eastern coasts of Victoria Nyanza and the East African coast region down to opposite Zanzibar probably had a population partly Nilotic-negro and partly Hottentot-Bushman. From Lakes Tanganyika and Nyasa south-westwards to the Cape of Good Hope the population was Forest-negro, Nilotic-negro, Hottentot and Bushman. Over nearly all this area the Bantu swept; and they assimilated or absorbed the vast majority of the preceding populations, of which, physically or linguistically, the only survivors are the scattered tribes of pygmies in the forests of south-west Nile land, Congo basin and Gabun, the central Sudanese of the N.E. Congo, a few patches of quasi-Hottentot, Hamitic and Nilotic peoples between Victoria Nyanza and the Zanzibar coast, and the Bushmen and Hottentots of south-west Africa. The first area of decided concentration on the part of the Bantu was very probably Uganda and the shores of Tanganyika. The main line of advance south-west trended rather to the east coast of Africa than to the west, but bifurcated at the south end of Lake Tanganyika, one great branch passing west between that lake and Nyasa, and the other southwards. Finally, when the Bantu had reached the [v.03 p.0357] south-west corner of Africa, their farther advance was checked by two causes: first, the concentration in a healthy, cattle-rearing part of Africa of the Hottentots (themselves only a superior type of Bushman, but able to offer a much sturdier resistance to the big black Bantu negroes than the crafty but feeble Bushmen), and secondly, the arrival on the scene of the Dutch and British, but for whose final intervention the whole of southern Africa would have been rapidly Bantuized, as far as the imposition of language was concerned.

The theory thus set forth of the origin and progress of the Bantu and the approximate date at which their great southern exodus commenced, is to some extent attributable to the present writer only, and has been traversed at different times by other writers on the same subject. In the nearly total absence of any historical records, the only means of building up Bantu history lies in linguistic research, in the study of existing dialects, of their relative degree of purity, of their connexion one with the other and of the most widely-spread roots common to the majority of the Bantu languages. The present writer, relying on linguistic evidence, fixed the approximate date at which the Bantu negroes left their primal home in the very heart of Africa at not much more than 2000 years ago; and the reason adduced was worth some consideration. It lay in the root common to a large proportion of the Bantu languages expressing the domestic fowl--_kuku_ (_nkuku_, _ngoko_, _nsusu_, _nguku_, _nku_). Now the domestic fowl reached Africa first through Egypt, at the time of the Persian occupation--not before 500 to 400 B.C. It would take at that time at least a couple of hundred years before--from people to people and tribe to tribe up the Nile valley--the fowl, as a domestic bird, reached the equatorial regions of Africa. The Muscovy duck, introduced by the Portuguese from Brazil at the beginning of the 17th century, is spreading itself over Negro Africa at just about the same rate. Yet the Bantu people must have had the domestic fowl well established amongst themselves before they left their original home, because throughout Bantu Africa (with rare exceptions and those not among the purest Bantu tribes) the root expressing the domestic fowl recurs to the one vocable of _kuku_.[2] Curiously enough this root _kuku_ resembles to a marked degree several of the Persian words for "fowl," and is no doubt remotely derived from the cry of the bird. Among those Negro races which do not speak Bantu languages, though they may be living in the closest proximity to the Bantu, the name for fowl is quite different.[3] The fowl was only introduced into Madagascar, as far as researches go, by the Arabs during the historical period, and is not known by any name similar to the root _kuku_. Moreover, even if the fowl had been (and there is no record of this fact) introduced from Madagascar on to the east coast of Africa, it would be indeed strange if it carried with it to Cameroon, to the White Nile and to Lake Ngami one and the same name. It may, however, be argued that such a thing is possible, that the introduction of the fowl south of the equator need not be in any way coincident with the Bantu invasion, as its name in North Central Africa may have followed it everywhere among the Bantu peoples. But all other cases of introduced plants or animals do not support this idea in the least. The Muscovy duck, for instance, is pretty well distributed throughout Bantu Africa, but it has no common widely-spread name. Even tobacco (though the root "taba" turns up unexpectedly in remote parts of Africa) assumes totally different designations in different Bantu tribes. The Bantu, moreover, remained faithful to a great number of roots like "fowl," which referred to animals, plants, implements and abstract concepts known to them in their original home. Thus there are the root-words for ox (_-ñombe_, _-ombe_, _-nte_), goat (_-budi_, _-buzi_, _-buri_), pig (_-guluba_), pigeon (_-jiba_), buffalo (_nyati_), dog (_mbwa_), hippopotamus (_-bugu_, _gubu_), elephant (_-jobo_, _-joko_), leopard (_ngwi_), house (_-zo_, _-do_, _-yumba_, _-anda_, _-dago_, _-dabo_), moon (_-ezi_), sun, sky, or God (_-juba_), water (_-ndi_, _-ndiba_, _mandiba_), lake or river (_-anza_),[4] drum (_ngoma_), name (_-ina_ or _jina_), wizard (_nganga_), belly, bowel (_-vu_, _-vumo_), buttocks (_-tako_); adjectives like _-bi_ (bad), _-eru_ (white); the numerals, 2, 3, 4, 5, 10 and 100; verbs like _fwa_ (to die), _ta_ (to strike, kill), _la (da)_ or _lia_ (_di_, _dia_) (to eat). The root-words cited are not a hundredth part of the total number of root-words which are practically common to all the spoken dialects of Bantu Africa. Therefore the possession amongst its root-words of a common name for "fowl" seems to the present writer to show conclusively that (1) the original Bantu tribe must have possessed the domestic fowl before its dispersal through the southern half of Africa began, and that (2) as it is historically certain that the fowl as a domestic bird did not reach Egypt before the Persian conquest in 525 B.C., and probably would not have been transmitted to the heart of Africa for another couple of hundred years, the Bantu exodus (at any rate to the south of the equatorial region) may safely be placed at a date not much anterior to 2100 years ago.

The creation of the Bantu type of language (pronominal-prefix) was certainly a much more ancient event than the exodus from the Bantu mother-land. Some form of speech like Fula, Kiama (Tern), or Kposo of northern Togoland, or one of the languages of the lower Niger or Benue, may have been taken up by ancient Libyan, Hamite or Nilotic conquerors and cast into the type which we now know as Bantu,--a division of sexless Negro speech, however, that shows no obvious traces of Hamitic (Caucasian) influence. We have no clue at present to the exact birth-place of the Bantu nor to the particular group of dialects or languages from which it sprang. Its origin and near relationships are as much a puzzle as is the case with the Aryan speech. Perhaps in grammatical construction (suffixes taking the place of prefixes) Fula shows some resemblance; and Fula possesses the concord in a form considerably like that of the Bantu, as well as offering affinities in the numerals 3 and 4, and in a _few_ nominal, pronominal and verbal roots. The Timne and cognate languages of Sierra Leone and the north Guinea coast use pronominal prefixes and a system of concord, the employment of the latter being precisely similar to the same practice in the Bantu languages; but in word-roots (substantives, numerals, pronouns, verbs) there is absolutely _no_ resemblance with this north Guinea group of prefix-using languages. In the numerals 2, 3, 4, and sometimes 5, and in a few verbal roots, there is a distinct affinity between Bantu and the languages of N. Togoland, the Benue river, lower Niger, Calabar and Gold Coast. The same thing may be said with less emphasis about the Madi and _possibly_ the Nyam-Nyam (Makarka) group of languages in Central Africa _though in none of these forms of speech is there any trace of the concord_. Prefixes of a simple kind are used in the tongues of Ashanti, N. Togoland, lower Niger and eastern Niger delta, Cross River and Benue, to express differences between singular and plural, and also the quality of the noun; but they do not correspond to those of the Bantu type, though they sometimes fall into "classes." In the north-west of the Bantu field, in the region between Cameroon and the north-western basin of the Congo, the Cross river and the Benue, there is an area of great extent occupied by languages of a "semi-Bantu" character, such as Nki, Mbudikum, Akpa, Mbe, Bayoñ, Manyañ, Bafut and Bansh[=o], and the Munshi, Jaráwa, Kororofa, Kamuku and Gbari of the central and western Benue basin. The resemblances to the Bantu in certain word-roots are of an obvious nature; and prefixes in a very simple form are generally used for singular and plural, but the rest of the concord is very doubtful. Here, however, we have the nearest relations of the Bantu, so far as [v.03 p.0358] etymology of word-roots is concerned. Further evidence of slight etymological and even grammatical relationships may be traced as far west as the lower Niger and northern and western Gold Coast languages (and, in some word-roots, the Mandingo group). The Fula language would offer some _grammatical_ resemblance if its suffixes were turned into prefixes (a change which has actually taken place in the reverse direction in the English language between its former Teutonic and its modern Romanized conditions; _cf._ "offset" and "set-off," "upstanding" and "standing-up").

The legends and traditions of the Bantu peoples themselves invariably point to a northern origin, and a period, not wholly removed from their racial remembrance, when they were strangers in their present lands. Seemingly the Bantu, somewhat early in their migration down the east coast, took to the sea, and not merely occupied the islands of Pemba and Zanzibar, but travelled as far afield as the Comoro archipelago and even the west coast of Madagascar. Their invasion of Madagascar must have been fairly considerable in numbers, and they doubtless gave rise to the race of black people known traditionally to the Hovas as the Va-zimba.

The accompanying map will show pretty accurately the distribution of the Bantu-speaking Negroes at the present day.

[Illustration]

It will be seen by a glance at this map that the areas in which are spoken Bantu languages of typical structure and archaic form are somewhat widely spread. Perhaps on the whole the most archaic dialects at the present day are those of Mount Elgon, Ruwenzori, Unyoro, Uganda, the north coast of Tanganyika and of the Bemba country to the south-west of Tanganyika; also those in the vicinity of Lake Bangweulu, and the Nkonde and Kese dialects of the north and north-east coasts of Lake Nyasa; also (markedly) the Subiya speech of the western Zambezi. Another language containing a good many original Bantu roots and typical features is the well-known Oci-herero of Damaraland (though this S.W. African group also presents marked peculiarities and some strange divergencies). Kimakonde, on the east coast of Africa, is a primitive Bantu tongue; so in its roots, but not in its prefixes, is the celebrated Ki-swahili of Zanzibar. Ci-bodzo of the Zambezi delta is also an archaic type of great interest. The Zulu-Kaffir language, though it exhibits marked changes and deviations in vocabulary and phonetics (both probably of recent date), preserves a few characteristics of the hypothetical mother-tongue: so much so that, until the languages of the Great Lakes came to be known, Zulu-Kaffir was regarded as the most archaic type of Bantu speech, a position from which it is now completely deposed. It is in some features unusually divergent from the typical Bantu.

_Classification._--With our present knowledge of the existing Bantu tongues and their affinities, it is possible to divide them approximately into the following numbered groups and subdivisions, commencing at the north-eastern extremity of the Bantu domain, where, on the whole, the languages approximate nearest to the hypothetical parent speech.

(1) The _Uganda-Unyoro_ group. This includes all the dialects between the Victoria Nile and Busoga on the east and north, the east coast of Lake Albert, the range of Ruwenzori and the Congo Forest on the west; on the south-east and south, the south coast of the Victoria Nyanza, and a line from near Emin Pasha Gulf to the Malagarazi river and the east coast of Tanganyika. On the south-west this district is bounded more or less by the Rusizi river down to Tanganyika. It includes the district of Busoga on the north-east and all the archipelagoes and inhabited islands of the Victoria Nyanza even as far east as Bukerebe, except those islands near the north-east coast. The dialects of Busoga, the Sese Islands and the west coast of Lake Victoria are closely related to the language of the kingdom of Uganda. Allied to, yet _quite_ distinct from the Uganda subjection, is that which is usually classified as _Unyoro_.[5] This includes the dialects spoken by the Hima (Hamitic aristocracy of these equatorial lands--_Uru-hima_, _Ru-hinda_, &c.), _Ru-songora_, _Ru-iro_, _Ru-toro_, _Ru-tusi_, and all the kindred dialects of Karagwe, Busiba, _Ruanda_, Businja and Bukerebe. _Ki-rundi_, of the Burundi country at the north end of Tanganyika, and the other languages of eastern Tanganyika down to Ufipa are closely allied to the Unyoro sub-section of group 1, but perhaps adhere more closely to group 12. The third independent sub-section of this group is _Lu-konjo_, the language which is spoken on the southern flanks of the Ruwenzori Range and thence southwards to Lake Kivu and the eastern limits of the Congo Forest.

(2) The second group on the geographical list is _Lihuku-Kuamba_, the separate and somewhat peculiar Bantu dialects lingering in the lands to the south and south-west of Albert Nyanza (Mboga country). Lihuku (or Libvanuma) is a very isolated type of Bantu, quite apart from the Uganda-Unyoro groups, with which it shows no special affinity at all, though in close juxtaposition. Its alliance with _Kuamba_ of western Ruwenzori is not very close. Other affinities are with the degraded Bantu dialects (_Ki-bira_, &c.) of the Ituri-Aruwimi forests. Kuamba is spoken on the west and north slopes of Ruwenzori. Both Kuamba and Lihuku show a marked relationship with the languages on the northern Congo and Aruwimi, less in grammar than in vocabulary.

(3) The _Kavirondo-Masaba_ section. This group, which includes the _Lu-nyara_, _Luwanga_, _Lukonde_ and _Igizii_ of the north-east and eastern shores of the Victoria Nyanza and the northern Kavirondo and Mount Elgon territories, is related to the Luganda section more than to any group of the Bantu tongues, but it is a very distinct division, in its prefixes the most archaic. It includes the languages spoken along the western flanks of Mount Elgon, those of Bantu Kavirondo, and of the eastern coast-lands of the Victoria Nyanza (Igizii).

(4) The _Kikuyu-Kamba_ group of British East Africa, east of the Rift valley. It includes, besides the special dialects of Kikuyu and Ukambani, all the scattered fragments of Bantu speech on Mount Kenya and the upper Tana river (_Dhaicho_).

(5) The _Kilimanjaro_ (_Chaga-Siha_) group, embracing the rather peculiar dialects of Mount Kilimanjaro, Mount Meru and Ugweno.

(6) The _Pokomo-Nyika-Giriama-Taveita_ group represents the Bantu dialects of the coast province of British East Africa, between (and including) the Tana river on the north and the frontier of German East Africa on the south.

(7) _Swahili_, the language of Zanzibar and of the opposite coast, a form of speech now widely spread as a commercial language over Eastern and Central Africa. Swahili is a somewhat archaic Bantu dialect, indigenous probably to the East African coast south of the Ruvu (Pangani) river, which by intermixture with Arabic has become the _lingua franca_ of eastern Africa between the White Nile and the Zambezi. It was almost certainly of mainland origin, distinct from the original local dialects of Zanzibar and Pemba, which may have belonged to group No. 6. There are colonies of Swahili-speaking people at Mombasa, Malindi, Lamu, and even as far north as the Shebeli river in Somaliland, also along the coast of German and Portuguese East Africa as far south as Angoche. In the coast-lands between the Ruvu or Pangani river on the north and the Kilwa settlements on the south, the local languages and dialects are more or less related to Swahili, though they are independent languages. Amongst these may be mentioned _Bondei_, _Shambala_ (north of the Ruvu), _Nguru_, _Zeguha_, _Ki-mrima_ and _Ki-zaramo_.

(8) This group might be described as _Kaguru-Sagala-Kami_. It is one which occupies the inland territories of German East Africa, between the Swahili coast dialects on the east and the domain of the Nyamwezi (No. 11) on the west. On the north this group is bounded by the non-Bantu languages of the Masai, Mbugu and Taturu, and on the south by the Ruaha river. This group includes _Kigogo_ and _Irangi_.

[v.03 p.0359] (9) The dialects of the Comoro Islands, between the East African coast and Madagascar, are styled _Hi-nzua_ or _Anzuani_ and _Shi-ngazija_. They are somewhat closely related to Swahili.

(10) The archaic _Makonde_ or _Mabiha_ of the lower Ruvuma, and the coast between Lindi and Ibo; this might conceivably be attached to the Swahili branch.

(11) The _Nyamwezi_ group includes all the dialects of the Nyamwezi country west of Ugogo as far north as the Victoria Nyanza (where the tongues melt into group No. 1), and bounded on the south by the Upper Ruaha river, and on the west by the eastern borderlands of Tanganyika. The Nyamwezi genus penetrates south-west to within a short distance of Lake Rukwa. A language of this group was at one time a good deal spoken in the southern part of the Belgian Congo, having been imported there by traders who made themselves chiefs.

(12) The _Tanganyika_ languages (_Ki-rega_, _Kabwari_, _Kiguha_, &c). These dialects are chiefly spoken in the regions west-north-west, and perhaps north and east of Tanganyika, from the vicinity of Lake Albert Edward on the north and the Lukuga outlet of Tanganyika on the south. On the west they are bounded by the Congo Forest and the Manyema genus (No. 13). The languages on the east coast of Tanganyika (_Ki-rundi_, _Kigeye_, &c.) seem to be more nearly connected with those of group No. 1 (_Uganda-Unyoro_), yet perhaps they are more conveniently included here.

(13) The _Manyema_ (_Baenya_) group includes most of the corrupt Bantu dialects between the western watershed of Tanganyika and the main stream of the Luapula-Congo, extending also still farther north, and comprising (seemingly) the languages of the Aruwimi basin, such as _Yalulema_, _Soko_, _Lokele_, _Kusu_, _Tu-rumbu_, &c. On the west the Manyema group is bounded by the languages of the Lomami valley, which belong to groups Nos. 15 and 16; on the east the Manyema genus merges into the much purer Bantu dialects of groups Nos. 1 and 12. An examination of the Lihuku-Kuamba section (No. 2) shows these tongues to be connected with the Manyema group. The _Kibira_ dialects of the north-eastern Congo Forest (Ituri district) may perhaps be placed in this section.[6]

(14) The _Rua-Luba-Lunda-Marungu_ group (in which are included _Kanyoka_, _Lulua_ and _Ki-tabwa_) occupies a good deal of the south central basin of the Congo, between the south-west coast-line of Tanganyika on the east and the main streams of the Kasai and Kwango on the west, between the Bakuba country on the north and the Zambezi watershed on the south.

(15) The _Bakuba_ assemblage of Central Congo dialects (_Songe_, _Shilange_, _Babuma_, &c.) probably includes all the Bantu languages between the Lomami river on the east and the Kwa-Kasai and Upper Kwilu on the west. Its boundary on the north is perhaps the Sankuru river.

(16) The _Balolo_ group consists of all the languages of the Northern Congo bend (bounded on the north, east and west by the main stream of the Congo), and perhaps the corrupt dialects of the Northern Kasai, Kwilu and Kwango (_Babuma_, _Bahuana_, _Bambala_, _Ba-yaka_, _Bakutu_, &c.), where these are not nearer allied to Teke (No. 18) or to _Bakuba_.

(17) The _Bangala-Bobangi-Liboko_ group comprises the commercial languages of the Upper Congo (_Ngala_, _Bangi_, _Liboko_, _Poto_, _Ngombe_, _Yanzi_, &c.) and all the known Congo dialects along and to the north and sometimes south of the main stream, from as far west as the junction of the Sanga to as far east as the Rubi and Lomami rivers, and those between the Congo and the Lower Ubangi river and up the Ubangi, as far north as the limits of the Bantu domain (about 3° 30' N.). Allied to these perhaps are the scarcely-known forms of speech in the basin of the Sanga river, besides the "Ba-yanzi" dialects of Lakes Mantumba and Leopold II.

(18) The _Bateke_ (_Batio_) group. This may be taken roughly to include most of the Bantu dialects west of the Sanga river, northwest of the Lower Congo, south of the Upper Ogowe and Ngoko rivers and east of the Atlantic coast-lands.

(19) The _Di-Kele_ and _Benga_ dialects of Spanish Guinea and the Batanga coast of German Cameroon.

(20) The _Fañ_ or _Pangwe_ forms of speech (so corrupt as to be only just recognizable as Bantu), which occupy the little-known interior of German Cameroon and French Gabun, down to the Ogowe, and as far east and north as the Sañga, Sanagá and Mbam rivers, and the immediate hinterland of the "Duala" Cameroon.

(21) The _Duala_ group, which on the other hand is of a much purer Bantu type, includes the languages spoken on the estuary and delta of the Cameroon river.

(22) The _Isubu-Bakwiri_ group of the coast-lands north of Cameroon delta (Ambas Bay), and on the west slopes of Cameroon Mts.

(23) The Bantu dialects of _Fernando Pô_ (_Ediya_, _Bateti_, _Bani_, &c.) distantly allied to Nos 24, 2 and 13.

(24) The _Barondo-Bakundu_ group, which begins on the north at the Rio del Rey on the extremity of the Bantu field, near the estuary of the Cross river. This group may also include _Barombi_ and _Bas[=a]_, _Boñkeñ_, _Abo_, _Nkosi_ and other much-debased dialects, which are spoken on the eastern slopes of the Cameroon mountains and on the Cameroon river (Magombe), and thence to the Sanagá and Nyong rivers. Eastwards and north-eastwards of this group, the languages (such as _Mbe_, _Bati_, _Nki_, _Mbudikum_, _Bafut_, _Bayoñ_) may be described as "semi-Bantu," and evincing affinities with the forms of speech in the basin of the Central Benue river and also with the _Fañ_ (No. 20).

(25) Turning southwards again from the north-westernmost limit of the Bantu, we meet with another group, the _Mpongwe-Orungu_ and _Aduma_ languages of French Gabun, and the tongues of the Lower Ogowe and Fernan Vaz promontory.

(26) These again shade on the south into the group of _Kakongo_ dialects of the Loango and Sete Kama coast--such as _Ba-kama_, _Ba-nyanga_, _Ma-yombe_, _Ba-vili_, _Ba-kamba_ and _Ka-kongo_ (_Kabinda_).

(27) The _Kongo_ language group comprises the dialects along the lower course of the Congo from its mouth to Stanley Pool; also the territory of the old kingdom of Congo, lying to the south of that river (and north of the river Loje) from the coast eastwards to the watershed of the river Kwango (and the longitude, more or less, of Stanley Pool).

(28) In the south the Kongo dialects melt imperceptibly into the closely-allied Angola language. This group may be styled in a general way _Mbundu_, and it includes the languages of Central Angola, such as _Ki-mbundu_, _Mbamba_, _Ki-sama_, _Songo_, _U-mbangala_. The boundary of this genus on the east is probably the Kwango river, beyond which the Lunda languages begin (No. 14). On the north, the river Loje to some extent serves as a frontier between the _Kongo_ and _Mbundu_ tongues. On the south the boundary of group No. 28 is approximately the 11th degree of south latitude.

(29) Very distinct from the _Ki-mbundu_ speech (though with connecting forms) is the _Oci-herero_ group, which includes the _Herero_ language of Damaraland, the _Umbundu_ of the Bihe highlands of south Angola, the _Nano_ of the Benguela coast, and _Si-ndonga_, _Ku-anyama_ and _Oci-mbo_ of the southern regions of Portuguese Angola and the northern half of German South-West Africa. The languages of group No. 29 probably extend as far inland as the Kwito and Kubango rivers, in short, to the Zambezi watershed. On the south they are confronted with the Hottentot languages. The Haukoin or Hill Damaras--a Negro race of unexplained affinities and apparently speaking a Hottentot language--occupy an enclave in the area of _Herero_ speech.

(30) What may be called the _Kiboko_ or _Kibokwe_ (also _Kioko_) family of eastern Angola is a language-group which seems to offer affinities to the languages of the Upper Zambezi and to those of groups Nos. 28 and 29. It extends eastwards into the south-western portion of the Belgian Congo, and includes the _Lubale_ of northern Barotseland and the sources of the river Zambezi, and possibly the _Gangela_ of south-western Angola.

(31) Southwards of group No. 30 is that of the _Barotseland_ languages, of which the best-known form--almost the only one that is effectively illustrated--is _Si-luyi_. To _Si-luyi_ may be related the _Mabunda_ of Western Barotseland. The dialects of the _Ambwela_, _A-mbwe_, _Ma-bukushu_ and _A-kwamashi_ are probably closely related.

(32) Next is a group which might be styled the _Subiya-Tonga-Ila_, though some authorities think that _Tonga_ and _Ila_ deserve to be ranked as an independent group. There is, however, a close alliance in structure between the languages of each of the two subsections. The _Tonga_ subgroup would include the dialects of the _Ba-tetela_, the _Ba-ila_ (_Mashukulumbwe_) and of all Central Zambezia. _Ci-subiya_ is the dominant language of South-West Zambezia, along a portion of the Zambezi river south of Barotseland, and in the lands lying between the Zambezi and the Chobe-Linyante river. _Subiya_ is one of the most archaic of Bantu languages, more so than _Tonga_. Both are without any strong affinity to _Oci-herero_, and only evince a _slight_ relationship with the Zulu group (No. 44).

(33) The _Bisa_ or _Wisa_ family includes the languages of Iramba, Bausi, Lukinga, in the southernmost projection of the Belgian Congo, and the dialects of _Lubisa_ and _Ilala_ between the Chambezi river and Lake Bangweulu on the north, and the Luangwa river on the east and south; perhaps also some of the languages along the course of the Upper Luapula river.

(34) With it is closely allied that of the _Bemba_ or _Emba_ dialects. This interesting genus occupies the ground between the south-west and south coasts of Tanganyika, Lake Mweru, and the Upper Chambezi river. The _Ki-bemba_ domain may be taken to include the locally-modified _Ki-lungu_ and _Ki-mambwe_ of South and South-East Tanganyika.

(35) What may be called the _North Nyasa_ or _Nkonde_ group comprises all the dialects of the north-west and north coasts of Lake Nyasa (such as _Ici-wandia_ and _Iki-nyikiusa_) and _Ishi-nyi[chi]a_ of the Nyasa-Tanganyika plateau, and extends perhaps as far north west as the Fipa country (_Iki-fipa_), and the shores of Lake Rukwa (_Ici-wungu_) in the vicinity of the Nyamwezi domain (No. 11). _Iki-fipa_, however, has some affinities to the Tanganyika and western Victoria-Nyanza languages (groups Nos. 1 and 12).

[v.03 p.0360] (36) The western part of Nyasaland, south of group No. 35, is occupied by the _Tumbuka_ section, which includes the languages of the _Tumbuka_, _Henga_ and _A-tonga_ peoples, and occupies the area between the western shores of Lake Nyasa and the Upper Luangwa river.

(37) Eastwards of No. 35 (North Nyasa group) lies the _Kinga_ speech of the lofty Livingstone mountains, which is sufficiently distinct from its neighbours to be classified as a separate group.

(38) East of the Livingstone mountains and west of the Ruaha river, south also of the Unyamwezi domain, extends the _Sango-Bena-Hehe-Sutu_ group.

(39) The extensive _Yao_ genus of languages stretches from just behind the coast of the Lindi settlements in German East Africa (_Ki-mwera_) south-westward across the Ruvuma river to the north-east shores of Lake Nyasa (_Ki-kese_), and thence back to the valley of the Lujenda-Ruvuma (_Cingindo_), and southwards in various dialects of the _Yao_ language to the south-east corner of Lake Nyasa and the region east of the Shire river, between Lake Nyasa, the Shire highlands and Mt. Mlanje. It is only since the middle of the 19th century that the _Yao_ language has conquered territory to the south of Lake Nyasa. There still remain within its domain colonies of Nyanja-speaking people.

(40) Eastwards of the _Yao_ domain, and bounded on the north by the range of that language in the Ruvuma valley and by the separate group of _Ki-makonde_ (No. 10), ranges the well-marked _Makua_ genus. The languages thus described occupy the greater part of Portuguese East Africa away from the watershed of Lake Nyasa. The _Makua_ language is probably divided into the following dialects:--_I-medo_, _I-lomwe_, _I-tugulu_ and _Anguru_. There are other dialects unnamed in the Angoji coast-region, where, however, strong colonies of Swahili-speaking people are settled. The southern part of the _Makua_ domain is occupied by the _Ci-cuambo_ of the Quelimane district.

(41) _Nyanja_, perhaps the most extensive group of cognate languages in the Bantu field, is principally associated with the east and west shores of the southern half of Lake Nyasa. It also covers all the valley of the Shire, except portions of the Shire highlands, down to the junction of that stream with the Zambezi, and further, the lands on both banks of the Zambezi down to and including its delta. West of Lake Nyasa, the _Nyanja_ domain extends in the _Senga_ language to the river Luangwa and the Central Zambezi, also along both banks of the Central Zambezi. South of the Central Zambezi, _Nyanja_ dialects are spoken as far west as the Victoria Falls. Thence they extend eastwards over Mashonaland to the sea-coast. With this family may also be associated the languages of the Portuguese coast-region south of the Zambezi as far as Inhambane. The principal dialects of the _Nyanja_ language are the _Cinyanja_ of Eastern Nyasaland, _Ci-peta_ and _Ci-maravi_ of South-West Nyasaland to as far as the watershed of the Luangwa river, the _Ci-mañanja_ of the Shire highlands, _Ci-mobo_ and _Ci-machinjiri_ of the Shire valley, _Ci-sena_ or _Ci-nyungwe_ of Tete and Sena (Zambezi), and _Ci-mazaro_ of the Lower Zambezi. The Luangwa regions, as already mentioned, are occupied by the distinct but closely-allied Senga language. South of the Central Zambezi there are _Ci-nanzwa_ in the region near the Victoria Falls, _Ci-nyai_, _Shi-kalaña_, _Ci-shuna_ (_Ci-gomo_), _Ci-loze_, and possibly _Ci-shangwe_ (or _Ci-hlangane_) and _Shi-lenge_ which link on to the Beira coast dialects. In the delta of the Zambezi is to be found _Ci-podzo_, a very distinct language, yet one which belongs to the _Nyanja_ genus. _Ci-shangane_, _Chopi_ or _Shi-lenge_ and other dialects of the Beira and Inhambane coast-lands and of Manika have been much influenced by Zulu dialects (_Tebele_ and _Ronga_).

(42) The well-marked _Bechuana_ language group has very distinct features of its own. This includes all the Bantu dialects of the Bechuanaland protectorate west of the Guai river. Bechuana dialects (such as _Ci-venda_, _Se-suto_, _Se-peli_, _Se-roloñ_, _Se-[chi]lapi_, &c.) cover a good deal of the north and west of the Transvaal, and extend over all the Orange River Colony and Bechuanaland. _Se-suto_ is the language of Basutoland; _Se-rolon_, _Se-mangwato_, of the Eastern Kalahri; _Se-kololo_ is the court language of Barotseland; _Ci-venda_ and _Se-pedi_ or _Peli_ are the principal dialects of the Transvaal. Group No. 42, in fact, stretches between the Zambezi on the north and the Orange river on the south, and extends westward (except for Hottentot and Bushmen interruptions) to the domain of the _Oci-herero_.

(43) The _Ronga_ (_Tonga_) languages of Portuguese South-East Africa (Gazaland, Lower Limpopo valley, and patches of the North Transvaal (_Shi-gwamba_), Delagoa Bay) are almost equally related to the _Nyanja_ group (41) on the one hand, and to _Zulu_ on the other, probably representing a mingling of the two influences, of which the latter predominates.

(44) Lastly comes the _Zulu-Kaffir_ group, occupying parts of Rhodesia, the eastern portion of the Transvaal, Swaziland, Natal and the eastern half of Cape Colony. In vocabulary, and to some degree in phonetics, the Zulu language (divided at most into three dialects) is related in some phonetic features to No. 42, and of course to No. 43; otherwise it stands very much alone in its developments. It may have distant relations in groups Nos. 29 and 32. Dialects of Zulu (_Tebele_ and _Ki-ngoni_ or _Ci-nongi_) are spoken at the present day in South-West Rhodesia and in Western Nyasaland and on the plateaus north-east of Lake Nyasa, carried thither by the Zulu raiders of the early 19th century.

The foregoing is only an attempt to classify the known forms of Bantu speech and to give their approximate geographical limits. The writer is well aware that here and there exist small patches of languages spoken by two or three villages which, though emphatically Bantu, possess isolated characters making them not easily included within any of the above-mentioned groups; but too detailed a reference to these languages would be wearisome and perhaps puzzling. Broadly speaking, the domain of Bantu speech seems to be divided into four great sections:--(a) the languages of the Great Lakes and the East Coast down to and including the Zambezi basin; (b) the South-Central group (_Bechuana-Zulu_); (c) the languages of the South-West, from the southern part of the Belgian Congo to Damaraland and the Angola-Congo coast; and (d) the Western group, including all the Central and Northern Congo and Cameroon languages, and probably also group No. 2 of the Albert Nyanza and Semliki river.

_Common Features_.--There is no mistaking a Bantu language, which perhaps is what renders the study of this group so interesting and encouraging. The homogeneity of this family is so striking, as compared with the inexplicable confusion of tongues which reigns in Africa north of the Bantu borderland, that the close relationships of these dialects have perhaps been a little exaggerated by earlier writers.

The phonology of the Western group (d) is akin to that of the Negro languages of Western and West-Central Africa. A small portion of (b) the South-Central group (_Zulu_) has picked up clicks, perhaps borrowed from the Hottentots and Bushmen. Otherwise, the three groups (a), (b) and (c) are closely related in phonology, and never, except here and there on the borders of the Western group, adopt the peculiar West African combinations of _kp_ and _gb_, which are so characteristic of African speech between the Upper Nile and the Guinea coast.

The following propositions may be laid down to define the special or peculiar features of the Bantu languages:--

(1) They are agglutinative in their construction, the syntax being formed by adding prefixes principally and also suffixes to the root, but no infixes (that is to say, no mutable syllable incorporated into the middle of the root-word).[7] (2) The root excepting its terminal vowel is practically unchanging, though its first or penultimate vowel or consonant may be modified in pronunciation by the preceding prefix, or the last vowel in the same way by the succeeding suffix.

(3) The vowels of the Bantu languages are always of the Italian type, and no true Bantu language includes obscure sounds like _ö_ and _ü_. Each word must end in a vowel (though in some modern dialects in Eastern Equatorial, West and South Africa the terminal vowel may be elided in rapid pronunciation, or be dropped, or absorbed in the terminal consonant, generally a nasal). No two consonants can come together without an intervening vowel, except in the case of a nasal, labial or sibilant.[8] No consonant is doubled. Apparent exceptions occur to this last rule where two nasals, two _r_'s or two _d_'s come together through the elision of a vowel or a labial.

(4) Substantives are divided into classes or genders, indicated by the pronominal particle prefixed to the root. These prefixes are used either in a singular or in a plural sense. With the exception of the "abstract" prefix _Bu_ (No. 14), no singular prefix can be used as a plural nor vice versa. There is a certain degree of correspondence between the singular and plural prefixes (thus No. 2 prefix serves almost invariably as a plural to No. 3; No. 8 corresponds as a plural to No. 7). The number of prefixes common to the whole group is perhaps sixteen. The pronominal particle or prefix of the noun is attached as a prefix to the roots of the adjectives, pronouns, prepositions and verbs of the sentence which are connected with the governing noun; and though in course of time these particles may differ in form from the prefix of the substantive, they were akin in origin. (This system is the "concord" of Dr Bleek.[9]) The pronominal particles, whether in nominative or accusative case, must always precede the nominal, pronominal, adjectival and verbal roots, though they often follow the auxiliary prefix-participles used in conjugating verbs,[10] and the roots of some prepositions.

[v.03 p.0361]

(5) The root of the verb is the second person singular of the imperative.

(6) No _sexual gender_ is recognized in the _pronouns_ and _concord_. Sexual gender may be indicated by a male "prefix" of varying form, often identical with a word meaning "father," while there is a feminine prefix, _na_ or _nya_, connected with the root meaning "mother," or a suffix _ka_ or _kazi_, indicating "wife," "female." The 1st and 2nd prefixes invariably indicate living beings and are Usually restricted to humanity.

The sixteen original prefixes of the Bantu languages are given below in the most archaic forms to be found at the present day. The still older types of these prefixes met with in one or two languages, and deduced generally by the other forms of the particle used in the syntax, are given in brackets. It is possible that some of these prefixes resulted from the combination of a demonstrative pronoun and a prefix indicating quality or number.

_Old Bantu Prefixes._

Singular. Plural.

Class 1. Umu- (Ñgu-mu-).[11] Class 2. Aba (Mba-ba or Ñga-ba).[11] " 3. Umu- (Ñgu-mu-). " 4. Imi- (Ñgi-mi-). " 5. Idi (Ndi-di-). " 6. Ama- (Ñga-ma-). " 7. Iki- (Ñki-ki-). " 8. Ibi- (Mbi-bi-). " 9. I-n- or I-ni- (?Ngi-ni-). " 10. Iti-, Izi-, Iti-n-, Izi-n- (?Ñgi-ti-). " 11. Ulu (Ndu-du-). " 12. Utu (?Ntu-tu-); often diminutive in sense. " 13. Aka (?Nka-ka-); usually diminutive, sometimes honorific. " 14. Ubu- (?Mbu-bu-); sometimes used in a plural sense; generally employed to indicate abstract nouns. " 15. Uku (?Ñku-ku-); identical with the preposition "to," used as an infinitive with verbs, but also with certain nouns indicating primarily functions of the body. " 16. Apa (Mpa-pa-); locative; applied to nouns and other forms of speech to indicate place or position; identical with the adverb "here," as Ku- is with "there."

To these sixteen prefixes, the use of which is practically common to all members of the family, might perhaps be added No. 17, _Fi-_ or _Vi-_, a prefix in the singular number, having a diminutive sense, which is found in some of the western and north-western Bantu tongues, chiefly in the northern half of the Congo basin and Cameroon. It is represented as far east (in the form of _I-_) as the Manyema language on the Upper Congo, near Tanganyika. This prefix cannot be traced to derivation from any others among the sixteen, certainly not to No. 8, as it is always used in the singular. Its corresponding _plural_ prefix is No. 12 (_Tu-_). Prefix No. 18 is _Ogu-_, which has, as a plural prefix, No. 19, _Aga-_. These are both used in an augmentative sense, and their use seems to be confined to the Luganda and Masaba dialects, and perhaps some branches of the Unyoro language. These, like No. 17, are regular prefixes, since they are supplied with the concord (_-gu-_ and _-ga-_). Lastly, there is the 20th prefix, _Mu-_, which is really a preposition meaning "in" or "into," often combined in meaning with another particle, _-ni_, used always as a suffix.[12] The 20th prefix, _Mu-_, however, does not seem to have a complete concord, as it is only used adjectivally or as a preposition and has no pronominal accusative.

The concord may be explained thus:--Let us for a moment reconstruct the original Bantu mother-tongue (as attempts are sometimes made to deduce the ancient Aryan from a comparison of the most archaic of its daughters) and propound sentences to illustrate the repetition of pronominal particles known as the concord.

_Old Bantu._ _Babo_ _mbaba_-ntu[13] _ba_bi _ba-bo_-ta tu-_ba_-oga. They these-they person they bad they who kill we fear them. Rendered into the modern dialect of _Luganda_ this would be:-- _Bo_ _aba_-ntu _ba_-bi _ba_bota tu-_ba_-tia. They these-they person they bad they who kill we them fear. (They are bad people who kill; we fear them.)

_Old Bantu._ _Ñgu-mu_-ti _ñg_uno _ñgu_-gwa ku-_ñgu_-mbona. This tree this here this falls; thou this seest? Rendered into _Kiguha_ of North-West Tanganyika, this would be:-- _U_m_u_ti _gu_no _gu_gwa u_gu_mona? It tree this here it falls; thou it seest? (The tree falls; dost thou see it?)

The prefixes and their corresponding particles have varied greatly in form from the original syllables, as the various Bantu dialects became more and more corrupt. Assuming these prefixes to have consisted once of two distinct particles, such as, for example, Nos. 1 and 3, _Ñgu-mu-_, or the 6th plural prefix _Nga-ma-_, the first syllable seems to have been of the nature of a demonstrative pronoun, and the second more like a numeral or an adjective. _Mu-_ probably meant "one," and _Ma-_ a collective numeral of indefinite number, applied to liquids (especially water), a tribe of men, a herd of beasts--anything in the mass.[14] In the corresponding particles of the concord as applied to adjectives, verbs and pronouns, sometimes the first syllable, _Ñgu_ or _Ñga_ was taken for the concord and sometimes the second _mu_ or _ma_. This would account for the seemingly inexplicable lack of correspondence between the modern prefix and its accompanying particle, which so much puzzled Bleek and other early writers on the Bantu languages. In many of these tongues, for example, the particle which corresponds at the present day to the plural prefix _Ma-_ is not always _Ma_, but more often _Ga-_, _Ya-_, _A-_; while to _Mu-_ (Classes 1 and 3) the corresponding particle besides _-mu-_ is _gu-_, _gw-_, _u-_, _wu-_, _yu-_, _ñ-_, &c.

The second prefix. _Ba-_ or _Aba-_, is, in the most archaic Bantu speech (the languages of Mt. Elgon), _Baba-_ in its definite form (_Ñgaba_ sometimes in Zulu-Kaffir). The concord is _-ba-_ in all the less corrupt Bantu tongues, but this plural prefix degenerates into _Va-_, _Wa-_, _Ma-_, and _A-_. The concord of the 4th prefix, _Mi-_, is _gi-_, _-i-_, _-ji-_, and sometimes _-mi-_. The commonest form of the 5th prefix at the present day is _Li-_ (the older and more correct is _Di-_), and its concord is the same; this 5th prefix is often dropped (the concord remaining) or becomes _Ri-_, _I-_, _Ji-_, and _Ni-_. The 7th prefix, _Ki-_, in many non-related dialects pursues a parallel course through _Ci-_ into _Si-_ (=_Shi_) and _Si-_ and its concord resembles it. The 8th prefix is still more variable. In its oldest form this is _Ibi-_ or _Mbibi-_. It is invariably the plural of the 7th. It becomes in different forms of Bantu speech _Vi-_, _Pi-_, _Fi-_, _Fy-_, _P[vs]i-_, _[vS]i-_, _I-_, _By-_, _Bzi-_, _Psi-_, _Zwi-_, _Zi-_ and _Ri-_, with a concord that is similar. The 10th prefix, which was originally _Ti-_ or _Tin-_, or _Zi-_ or _Zin-_, becomes _Jin-_, _Rin-_, _Din-_, _Lin-_, [theta]_in-_, [theta]_on-_. &c. The _n_ in this prefix is really the singular prefix No. 9, which is sometimes retained in the plural, and sometimes omitted. In the case of the 10th prefix, the concord or corresponding pronoun persists long after the prefix has fallen out of use as a definite article. Thus, though it is absent as a plural prefix for nouns in the _Swahili_ of Zanzibar, it reappears in the concord. For instance:--_Ñombe hizi zangu_--Cows these mine (These cows are mine), although _Ñombe_ has ceased to be _ziñombe_ in the plural, the _Zi-_

## particle reappears in _hizi_ and _zangu_. In fact, the persistence of this

concord, which exists in almost every known Bantu language in connexion with the 10th prefix, shows that prefix to have been in universal use at one time. The 11th prefix _-Lu-_ seems to be descended from an older form, _Ndu-_. Its commonest type is _Lu-_, but it sometimes loses the _L_ and becomes _U-_, and in the more archaic dialects is usually pronounced _Du-_ or _Ru-_. It is also _Nu-_ in one or two languages. The 12th prefix (_Tu-_), always used in a diminutive sense, disappears in many of these languages. Where met with it is generally _Tu-_ or _To-_, but sometimes the initial _T_ becomes _R_ (_Ru-_, _Ro-_) or _L_ (_Lu-_, _Lo-_) or even _Y_ (_Yo-_), the concord following the fortunes of the prefix. The 13th prefix (_Ka-_) is sometimes confused with the 7th (_Ki_) and merged into it and vice versa. _Ka-_ very often takes the 8th prefix as a plural, more commonly the 12th, sometimes the 14th. This prefix (_Ka-_) entirely disappears in the north-western section of the Bantu languages. Bleek thought that it persisted in the attenuated form of _E-_ so characteristic of the Cameroon and northern Congo languages, but later investigations show this _E-_ to be a reduction of _Ki-_ (_Ke-_) the 7th prefix. The 14th prefix _Bu-_ is very persistent, but frequently loses its initial letter _B_, which is either softened into _V_ or _W_, or disappears altogether, the prefix becoming _U-_ or _O-_ or _Ow-_. Sometimes this prefix becomes palatized into _By-_ or even _T[vs]-_ (_C-_). The concord follows suit. The 15th prefix, _Ku-_, occasionally loses its initial _K_ or softens into _Hu_ or [Greek: chu] or strengthens into _Gu_. Its concord under these circumstances sometimes remains in the form of _Ku-_. The 16th, _Pa-_, prefix is one of the most puzzling in its distribution and its phonetic changes. A very large number of the Bantu languages in the north, east and west have a dislike to the consonant P, which they frequently transmute into an aspirate (_H_), or soften into _V_, _W_, or _F_, or simply drop out. There is too much evidence in favour of this prefix having been originally _Pa-_ or _Mpa-pa_ to enable us to give it any other form in reconstructing the Bantu mother-tongue. Yet in the most archaic Bantu dialects to the north of the Victoria Nyanza it is nowhere found in the form of _Pa-_. It is either _Ha-_ (and _Ha-_ changes eastward into _Sa-_!) or _Wa-_.[15] But for its existence in this shape in the language of Uganda one might almost be led to think that the 16th locative prefix began as _Ha-_, and by some process without a parallel changed in the east and south to the form of _Pa-_. There are, however, a good many place names in the northern part of the Uganda protectorate, in the region now occupied by Nilotic negroes, which begin with _Pa-_. These place names would seem to be of ancient Bantu origin in a [v.03 p.0362] land from which the Bantu negroes were subsequently driven by Nilotic invaders from the north. They may be relics therefore of a time before the _Pa-_ prefix of those regions had changed to the modern form of _Ha-_. In S.W. and N.W. Cameroon the initial _p_ of the 16th prefix reappears in two or three dialects; but elsewhere in North-West Bantu Africa and in the whole basin of the Congo, except the extreme south and south-east, the form _Pa-_ is never met with; it is _Va-_, _Wa-_, _Ha-_, _Fa-_, or _A-_. In the _Secuana_ group of dialects it is _Fa-_ or _Ha-_; in the Luyi language of Barotseland it assumes the very rare form of _Ba-_, while the first prefix is weakened to _A-_.

The pronouns in Bantu are in most cases traceable to some such general forms as these:--

I, me, my .....................ñgi, mi,[16] ñgu.

Thou, thee, thy................gwe, ku; -ko.

He or she, him, her, his, &c...a-, ya-, wa- (nom.); also ñgu- (which becomes yu-, ye-, wu-, hu-, u-); -mu (acc.); -ka, -kwe (poss.); there is also another form, ndi (nom. and poss.) in the Western Bantu sphere.

We, us, our....................isu, swi-, tu-, ti-; -tu- (acc.); -itu (poss.).

Ye, you, your..................inu, mu-, nyu-, nyi-, -ni; -nu, -mu- (acc.); -inu (poss.).

They, them, their..............babo, ba-; -ba- (acc.); -babo (poss.).

The Bantu verb consists of a practically unchangeable root which is employed as the second person singular of the imperative. To this root are prefixed and suffixed various particles. These are worn-down verbs which have become auxiliaries or they are reduced adverbs or prepositions. It is probable (with one exception) that the building up of the verbal root into moods and tenses has taken place independently in the principal groups of Bantu languages, the arrangement followed being probably founded on a fundamental system common to the original Bantu tongue. The exception alluded to may be a method of forming the preterite tense, which seems to be shared by a great number of widely-spread Bantu languages. This may be illustrated by the Zulu _tanda_, love, which changes to _tandile_, have loved, did love. This _-ile_ or _-ili_ may become in other forms _-idi_, _didi_, _-ire_, _-ine_, but is always referable back to some form like _-ili_ or _ile_, which is probably connected with the root _li_ or _di_ (_ndi_ or _ni_), which means "to be" or "exist." The initial _i_ in the

## particle _-ile_ often affects the last or penultimate syllable of the

verbal root, thereby causing one of the very rare changes which take place in this vocable. In many Bantu dialects the root _pa_ (which means to give) becomes _pele_ in the preterite (no doubt from an original _pa-ile_). Likewise the Zulu _tandile_ is a contraction of _tanda-ile_.

Two other frequent changes of the terminal vowel of the common root are those from _a_ (which is almost invariably the terminal vowel of Bantu verbs), (1), into _e_ to form the subjunctive tense, (2) into _i_ to give a negative sense in certain tenses. With these exceptions the vowel _a_ almost invariably terminates verbal roots. The departures from this rule are so rare that it might almost be included among the elementary propositions determining the Bantu languages. And these instances when they occur are generally due (as in Swahili) to borrowed foreign words (Arabic, Portuguese or English).[17] This point of the terminal _a_ is the more interesting because, by changing the terminal vowel of the verbal root and possibly adding a personal prefix, one can make nouns from verbs. Thus in Luganda _senyua_ is the verbal root for "to pardon." "A pardon" or "forgiveness" is _ki-senyuo_. "A pardoner" might be _mu-senyui_. In Swahili _patani[vs]a_ would be the verbal root for "conciliate"; _mpatana[vs]i_ is a "conciliator," and _upatani[vs]o_ is "conciliation." Another marked feature of Bantu verbs is their power of modifying the sense of the original verbal root by suffixes, the affixion of which modifies the terminal vowel and sometimes the preceding consonant of the root. Familiar forms of these variations and their usual meanings are as follows:--

Supposing an original Bantu root, _tanda_, to love; this may become

_tandwa_ . . . . . . . . . . to be loved. _tandeka_ or _tandika_ . . . to be lovable. _tandila_ or _tandela_[18] . to love for, with, or by some other person. _tandiza_ (or _-eza_) \ to cause to love. _tandisa_ (or _-esa_)[19] / to cause to love. _tandana_ . . . . . . . . . to love reciprocally.

The suffix _-aka_ or _-añga_ sometimes appears and gives a sense of continuance to the verbal root. Thus _tanda_ may become _tandaka_ in the sense of "to continue loving."[20]

The negative verbal particle in the Bantu languages may be traced back to an original _ka_, _ta_ or _sa_, _ki_, _ti_ or _si_ in the Bantu mother-tongue. Apparently in the parent language this particle had already these alternative forms, which resemble those in some West African Negro languages. In the vast majority of the Bantu dialects at the present day, the negative particle in the verb (which nearly always coalesces with the pronominal particle) is descended from this _ka_, _ta_ or _sa_, _ki_, _ti_ or _si_, assuming the forms of _ka_, _ga_, _ñga_, _sa_, _ta_, _ha_, _a_, _ti_, _si_, _hi_, &c. It has coalesced to such an extent in some cases with the pronominal particle that the two are no longer soluble, and it is only by the existence of some intermediate forms (as in the _Kongo_ language) that we are able to guess at the original separation between the two. Originally the negative particle _ka_, _sa_, &c., was joined to the pronominal particles, thus:--

_Ka-ngi_ .................... not I. (Therefore _Ka-ngi tanda_ = not I love.) _Ka-ku_ or _ka-wu_ .......... not thou. _Ka-a_ ...................... not he, she. _Ka-tu_ ..................... not we. _Ka-nu_ ..................... not ye. _Ka-ba_ ..................... not they.

In like manner _sa_ would become _sa-ngi_, _sa-wu_, &c. But very early in the history of Bantu languages _ka-ngi_, or _sa-ngi_, became contracted into _kai_, _sai_, and finally, _ki_, _si_; _ka-ku_ or _ka-wu_ into _ku_; and _kaa_ or _saa_ have always been _ka_ or _sa_. Sometimes in the modern languages the negative particle (such as _ti_ or _si_) is used without any vestige of a pronoun being attached to it, and is applied indifferently to all the persons. Occasionally this particle has fallen out of use, and the negative is expressed (1) by stress or accent; (2) by suffix (traceable to a root _-pe_ or _-ko_) answering to the French _pas_, and having the same sense; and (3) by the separate employment of an adverb. If not a few Bantu languages, the verb used in a negative sense changes its terminal _-a_ to _-i_. The subjunctive is very frequently formed by changing the terminal _-a_ to _-e_: thus, tanda = love; -tand_e_ = may love.

BIBLIOGRAPHY.--_A Comparative Grammar of South African Languages_ (in two parts, left unfinished), by Dr W. I. Bleek (London, 1869); _A Sketch of the Modern Languages of Africa_, by R. N. Cust (1882); _Comparative Grammar of the South African Bantu Languages_, by Father J. Torrend (1894; mainly composed on a study of the languages of the Central Zambezi, interesting, but erroneous in some deductions, and incomplete). In Sir H. H. Johnston's _The Kilimanjaro Expedition_ (1884), _British Central Africa_ (1898), and _The Uganda Protectorate_ (1902-1904), there are illustrative vocabularies; and in _George Grenfell and the Congo_ (1908) the Congo groups of Bantu speech are carefully classified, also the Fernandian and Cameroon. In the numerous essays of Carl Meinhof on the original structure of the Bantu mother-speech, and on existing languages in East and South-East Africa, in the _Mittheilungen des Seminärs für Orientalische Sprachen_, Berlin (also issued separately through Brockhaus, Leipzig, 1899), and also in his _Grundzüge einer vergleichenden Grammatik der Bantusprachen_ (Berlin, 1906), a vast amount of valuable information has been collected, but Meinhof's deductions therefrom are not in every case in accord with those of other authorities. The _Swahili-English Dictionary_, by Dr L. Krapf (London, 1882), contains a mass of not well-sorted but invaluable information concerning the Swahili language as spoken on the coast of East Africa, especially regarding many words now becoming obsolete. A similar mine of information is to be found in _An Encyclopaedic Dictionary of the Manañja_ (Mang'anja) _Language of British Central Africa_, by the Rev. D. C. Scott (1891). Other admirable works are the _Dictionary of the Congo Language_, by the Rev. Holman Bentley (1891), and _The Folklore of Angola_, and a _Grammar of Kimbundu_, by Dr. Heli Chatelain. The many handbooks and vocabularies written and published by Bishop Steere on the languages of the East African coast-lands are of great importance to the student, especially as they give forms of the prefixes now passing out of use. The _Introductory Handbook of the Yao Language_, by the Rev. Alexander Hetherwick, illustrates very fully that peculiar and important member of the East African group. Vocabularies of various Congo languages have been compiled by Dr. A. Sims; more important works on this subject have been published by the Rev. W. H. Stapleton (_Comparative Handbook of Congo Languages_), and by Rev. John Whitehead (_Grammar and Dictionary of the Bobangi Language_ (London, 1899). E. Torday has illustrated the languages of the Western Congo basin (_Kwango_, _Kwilu_, northern _Kasai_) in the _Journal of the Royal Anthropological Institute_. There is a treatise on the _Lunda_ language of the southwestern part of the Belgian Congo, in Portuguese, by Henrique de Carvalho, who also in his _Ethnographia da Expedicaõ portugueza [v.03 p.0363] ao Muata Yanvo_ goes deeply into Bantu language questions. The _Duala_ language of Cameroon, has been illustrated by the Baptist missionary Saker in his works published about 1860, and since 1900 by German missionaries and explorers (such as Schuler). The German work on the Duala language is mostly published in the _Mittheilungen des Seminärs für Orientalische Sprachen_ (Berlin); see also Schuler's _Grammatik des Duala_. The Rev. S. Koelle, in his _Polyglotta Africana_, published in 1851, gave a good many interesting vocabularies of the almost unknown north-west Bantu borderland, as well as of other forms of Bantu speech of the Congo coast and Congo basin. J. T. Last, in his _Polyglotta Africana Orientalis_, has illustrated briefly many of the East African dialects and languages, some otherwise touched by no one else. He has also published an excellent grammar of the _Kaguru_ language of the East African highlands (Usagara). The fullest information is now extant regarding the languages of _Uganda_ and _Unyoro_, in works by the missionaries of the Church Missionary Society (Pilkington, Blackledge, Hattersley, Henry Duta and others). Mr Crabtree, of the same mission, has collected information regarding the _Masaba_ dialects of Elgon, and these have also been illustrated by Mr C. W. Hobley, and by Sir H. H. Johnston (_Uganda Protectorate_), and privately by Mr S. A. Northcote. Mr A. C. Madan has published works on the _Swahili_ language and on the little-known _Senga_ of Central Zambezia and _Wisa_ of North-East Rhodesia (Oxford University Press). Jacottet (Paris, 1902) has in his _Grammaire Subiya_ provided an admirable study of the _Subiya_ and _Luyi_ languages of Barotseland, and in 1907, Edwin W. Smith (Oxford University Press) brought out a _Handbook of the Ila Language_ (Mashukulumbwe). The Rev. W. Govan Robertson is the author of a complete study of the _Bemba_ language. Mrs Sydney Hinde has illustrated the dialects of _Kikuyu_ and _Kamba_. F. Van der Burgt has published a _Dictionary of Kirundi_ (the language spoken at the north end of Tanganyika). _Oci-herero_ of Damaraland has chiefly been illustrated by German writers, old and new; such as Dr Kolbe and Dr P. H. Brincker. The northern languages of this Herero group have been studied by members of the American Mission at Bailundu under the name of _Umbundu_. Some information on the languages of the south-western part of the Congo basin and those of south-eastern Angola may be found in the works of Capello and Ivens and of Henrique de Carvalho and Commander V. L. Cameron. The British, French and German missionaries have published many dictionaries and grammars of the different _Secuana_ dialects, notable amongst which is John Brown's _Dictionary of Secuana_ and Meinhof's _Study of the T[vs]i-venda_. The grammars and dictionaries of Zulu-Kaffir are almost too numerous to catalogue. Among the best are Maclaren's _Kafir Grammar_ and Roberts' _Zulu Dictionary_. The works of Boyce, Appleyard and Bishop Colenso should also be consulted. Miss A. Werner has written important studies on the Zulu click-words and other grammatical essays and vocabularies of the Bantu languages in the _Journal of the African Society_ between 1902 and 1906. The Tebele dialect of Zulu has been well illustrated by W. A. Elliott in his _Dictionary of the Tebele and Shuna languages_ (London, 1897). The _Ronga_ (_Tonga_, _Si-gwamba_, _Hlengwe_, &c.) are dealt with in the _Grammaire Ronga_ (Lausanne, 1896) of Henri Junod. Bishop Smyth and John Mathews have published a vocabulary and short grammar of the _Xilenge_ (Shilenge) language of Inhambane (_S.P.C.R._, 1902). The journal _Anthropos_ (Vienna) should also be consulted.

(H. H. J.)

[1] _Bantu_ (literally _Ba-ntu_) is the most archaic and most widely spread term for "men," "mankind," "people," in these languages. It also indicates aptly the leading feature of this group of tongues, which is the governing of the unchangeable root by prefixes. The syllable _-ntu_ is nowhere found now standing alone, but it originally meant "object," or possibly "person." It is also occasionally used as a relative pronoun--"that," "that which," "he who." Combined with different prefixes it has different meanings. Thus (in the purer forms of Bantu languages) _muntu_ means "a man," _bantu_ means "men," _kintu_ means "a thing," _bintu_ "things," _kantu_ means "a little thing," _tuntu_ "little things," and so on. This term _Bantu_ has been often criticized, but no one has supplied a better, simpler designation for this section of Negro languages, and the name has now been definitely consecrated by usage.

[2] In Luganda and other languages of Uganda and the Victoria Nyanza, and also in Runyoro on the Victoria Nile, the word for "fowl" is _enkoko_. In Ki-Swahili of Zanzibar it is _kuku_. In Zulu it is _inkuku_. In some of the Cameroon languages it is _lokoko_, _ngoko_, _ngok_, and on the Congo it is _nkogo_, _nsusu_. On the Zambezi it is _nkuku_; so also throughout the tribes of Lakes Nyasa and Tanganyika, and most dialects of South Africa.

[3] From this statement are excepted those tongues classified as "semi-Bantu." In some languages of the Lower Niger and of the Gold Coast the word for "fowl" is generally traceable to a root _kuba_. This form _kuba_ also enters the Cameroon region, where it exists alongside of _-koko_. _Kuba_ may have arisen independently, or have been derived from the Bantu _kuku_.

[4] Whence the many _nyanza_, _nyanja_, _nyasa_, _mwanza_, of African geography.

[5] In using the forms Uganda, Unyoro, the writer accepts the popular mis-spelling. These countries should be called Buganda and Bunyoro, and their languages Luganda and Runyoro.

[6] It is an important and recently discovered fact (delineated in the work of the Baptist missionaries and of the Austrian traveller Dr. Franz Thonner) that the Congo at its northern and north-eastern bend, between the Rubi river and Stanley Falls, lies outside the Bantu field. The _Bondonga_ and _Wamanga_ languages are not Bantu. They are allied to the _Mbuba-Momfu_ of the Ituri and Nepoko, and also to the _Mundu_ of the Egyptian Sudan. The Mundu group extends westward to the Ubangi river, as far south as 3° 30' N. See _George Grenfell and the Congo_, by Sir Harry Johnston; and _Dans la Grande Forêt de l'Afrique équatoriale_, by Franz Thonner (1899).

[7] These features are characteristic of almost all the Negro languages of Africa.

[8] This does not preclude the _aspiration_ of consonants, or the occasional local change of a palatal into a guttural.

[9] As already mentioned, a somewhat similar concord is also present as regards the _suffixes_ of the Fula and the Kiama (_Tem_) languages in Western Africa, and as regards the _prefixes_ of the Timne language of Sierra Leone; it exists likewise in Hottentot and less markedly in many Aryan, Semitic and Hamitic tongues.

[10] An apparent but not a real exception to this rule is in the second person plural of the imperative mood, where an abbreviated form of the pronoun is _affixed_ to the verb. Other phases of the verb may be occasionally emphasized by the repetition of the governing pronoun at the end.

[11] The full hypothetical forms of the prefixes as joined with definite articles--_Ñgumu_, _Mbaba_, _Ñgimi_, _Ñgama_ and so on--are added in brackets. Forms very like these are met with still in the Mt. Elgon languages (Group No. 3) and in _Subiya_ group (No. 32).

[12] This is prominently met with in East Africa, and also in the various Bechuana dialects of Central South Africa, where it takes the form of _ñ_ at the end of words.

[13] Or perhaps _ñga-ba-ntu_ (afterwards _ña-ba-_, _aba-_); the form _ñgabantu_ is actually met with in Zulu-Kaffir: also _ñgumuntu_.

[14] Likewise _ba-_ may have meant "two" (Bantu root _Bali_ = two); a dual first and then a plural.

[15] _Wa-_ in Luganda. In Lusoga (north coast of Victoria Nyanza) _Wa-_ becomes _[Gamma]a_ (_Gha_).

[16] _Mi_ is possibly a softening of _ñgi_, _ñi_; _ñgi_ becomes in some dialects _nji_, _ndi_, _ni_ or _mbi_; there is in some of the coast Cameroon languages, and in the north-eastern Congo, a word _mbi_, _mba_ for "I," "me," which seems to be borrowed from the Sudanian Mundu tongues. The possessive pronoun for the first person is devired from two forms, _-ami_ and _-añgi_ (_-am_, _-añgu_, _-anji_, _-ambi_, &c.).

[17] An exception to this rule is the verbal particle _li_ or _di_, which means "to be."

[18] Or _-ira_, _-era_.

[19] This form may also appear as _[vs]a_, as for instance _aka_--to be on fire becomes _a[vs]a_, to set on fire.

[20] In choosing this common root _tanda_, and applying it to the above various terminations, the writer is not prepared to say that it is associated with all of them in any one Bantu language. Although _tanda_ is a common verb in Zulu, it has not in Zulu _all_ these variations, and in some other language where it may by chance exhibit all the variations its own form is changed to _londa_ or _randa_.

BANVILLE, THÉODORE FAULLAIN DE (1823-1891), French poet and miscellaneous writer, was born at Moulins in the Bourbonnais, on the 14th of March 1823. He was the son of a captain in the French navy. His boyhood, by his own account, was cheerlessly passed at a lycée in Paris; he was not harshly treated, but took no part in the amusements of his companions. On leaving school with but slender means of support, he devoted himself to letters, and in 1842 published his first volume of verse (_Les Cariatides_), which was followed by _Les Stalactites_ in 1846. The poems encountered some adverse criticism, but secured for their author the approbation and friendship of Alfred de Vigny and Jules Janin. Henceforward Banville's life was steadily devoted to literary production and criticism. He printed other volumes of verse, among which the _Odes funambulesques_ (Alençon, 1857) received unstinted praise from Victor Hugo, to whom they were dedicated. Later, several of his comedies in verse were produced at the Théâtre Français and on other stages; and from 1853 onwards a stream of prose flowed from his industrious pen, including studies of Parisian manners, sketches of well-known persons (_Camées parisiennes_, &c.), and a series of tales (_Contes bourgeois_, _Contes héroïques_, &c.), most of which were republished in his collected works (1875-1878). He also wrote freely for reviews, and acted as dramatic critic for more than one newspaper. Throughout a life spent mainly in Paris, Banville's genial character and cultivated mind won him the friendship of the chief men of letters of his time. He was also intimate with Frédérick-Lemaître and other famous actors. In 1858 he was decorated with the legion of honour, and was promoted to be an officer of the order in 1886. He died in Paris on the 15th of March 1891, having just completed his sixty-eighth year. Banville's claim to remembrance rests mainly on his poetry. His plays are written with distinction and refinement, but are deficient in dramatic power; his stories, though marked by fertility of invention, are as a rule conventional and unreal. Most of his prose, indeed, in substance if not in manner, is that of a journalist. His lyrics, however, rank high. A careful and loving student of the finest models, he did even more than his greater and somewhat older comrades, Victor Hugo, Alfred de Musset and Théophile Gautier, to free French poetry from the fetters of metre and mannerism in which it had limped from the days of Malherbe. In the _Odes funambulesques_ and elsewhere he revived with perfect grace and understanding the _rondeau_ and the _villanelle_, and like Victor Hugo in _Les Orientales_, wrote _pantoums_ (pantuns) after the Malay fashion. He published in 1872 a _Petit traité de versification française_ in exposition of his metrical methods. He was a master of delicate satire, and used with much effect the difficult humour of sheer bathos, happily adapted by him from some of the early folk-songs. He has somewhat rashly been compared to Heine, whom he profoundly admired; but if he lacked the supreme touch of genius, he remains a delightful writer, who exercised a wise and sound influence upon the art of his generation.

Among his other works may be mentioned the poems, _Idylles prussiennes_ (1871), and _Trente-six ballades joyeuses_ (1875); the prose tales, _Les Saltimbanques_ (1853); _Esquisses parisiennes_ (1859) and _Contes féeriques_; and the plays, _Le Feuilleton d'Aristophane_ (1852), _Gringoire_ (1866), and _Deidamia_ (1876).

See also J. Lemaître, _Les Contemporains_ (first series, 1885); Sainte-Beuve, _Causeries du lundi_, vol. xiv.; Maurice Spronck, _Les Artistes littéraires_ (1889).

(C.)

BANYAN, or BANIAN (an Arab corruption, borrowed by the Portuguese from the Sanskrit _vanij_, "merchant"), the _Ficus Indica_, or _Bengalensis_, a tree of the fig genus. The name was originally given by Europeans to a

## particular tree on the Persian Gulf beneath which some Hindu "merchants"

had built a pagoda. In Calcutta the word was once generally applied to a native broker or head clerk in any business or private house, now usually known as sircar. _Bunya_, a corruption of the word common in Bengal generally, is usually applied to the native grain-dealer. Early writers sometimes use the term generically for all Hindus in western India. _Banyan_ was long Anglo-Indian for an undershirt, in allusion to the body garment of the Hindus, especially the Banyans.

_Banyan days_ is a nautical slang term. In the British navy there were formerly two days in each week on which meat formed no part of the men's rations. These were called banyan days, in allusion to the vegetarian diet of the Hindu merchants. _Banyan hospital_ also became a slang term for a hospital for animals, in reference to the Hindu's humanity and his dislike of taking the life of any animal.

BAOBAB, _Adansonia digitata_ (natural order _Bombaceae_), a native of tropical Africa, one of the largest trees known, its stem reaching 30 ft. in diameter, though the height is not great. It has a large woody fruit, containing a mucilaginous pulp, with a pleasant cool taste, in which the seeds are buried. The bark yields a strong fibre which is made into ropes and woven into cloth. The wood is very light and soft, and the trunks of living trees are often excavated to form houses. The name of the genus was given by Linnaeus in honour of Michel Adanson, a celebrated French botanist and traveller.

BAPHOMET, the imaginary symbol or idol which the Knights Templars were accused of worshipping in their secret rites. The term is supposed to be a corruption of _Mahomet_, who in several medieval Latin poems seems to be called by this name. J. von Hammer-Purgstall, in his _Mysterium Baphometis relevatum, &c._, and _Die Schuld der Templer_, revived the old charge against the Templars. The word, according to his interpretation, signifies the baptism of _Metis_, or of fire, and is, therefore, connected with the impurities of the Gnostic Ophites (_q.v._). Additional [v.03 p.0364] evidence of this, according to Hammer-Purgstall, is to be found in the architectural decorations of the Templars' churches.

An elaborate criticism of Hammer-Purgstall's arguments was made in the _Journal des Savans_, March and April 1819, by M. Raynouard, a well-known defender of the Templars. (See also Hallam, _Middle Ages_, c. i. note 15.)

BAPTISM. The Gr. words [Greek: baptismos] and [Greek: baptisma] (both of which occur in the New Testament) signify "ceremonial washing," from the verb [Greek: baptizô], the shorter form [Greek: baptô] meaning "dip" without ritual significance (_e.g._ the finger in water, a robe in blood). That a ritual washing away of sin characterized other religions than the Christian, the Fathers of the church were aware, and Tertullian notices, in his tract _On Baptism_ (ch. v.), that the votaries of Isis and Mithras were initiated _per lavacrum_, "through a font," and that in the _Ludi Apollinares et Eleusinii_, _i.e._ the mysteries of Apollo and Eleusis, men were baptized (_tinguntur_, Tertullian's favourite word for baptism), and, what is more, baptized, as they presumed to think, "unto regeneration and exemption from the guilt of their perjuries." "Among the ancients," he adds, "anyone who had stained himself with homicide went in search of waters that could purge him of his guilt."

The texts of the New Testament relating to Christian baptism, given roughly in chronological order, are the following:--

A.D. 55-60, Rom. vi. 3, 4; 1 Cor. i. 12-17, vi. 11, x. 1-4, xii. 13, xv. 29; Gal. iii. 27.

A.D. 60-65, Col. ii. 11, 12; Eph. iv. 5, v. 26.

A.D. 60-70, Mark x. 38, 39.

A.D. 80-90, Acts i. 5, ii. 38-41, viii. 16, 17, x. 44-48, xix. 1-7, xxii. 16; 1 Pet. iii. 20, 21; Heb. x. 22.

A.D. 90-100, John iii. 3-8, iii. 22, iii. 26, iv. 1, 2.

Uncertain, Matt, xxviii. 18-20; Mark xvi. 16.

The baptism of John is mentioned in the following:--

A.D. 60-70, Mark i. 1-11.

A.D. 80-90, Matt. iii. 1-16:; Luke iii. 1-22, vii. 29, 30; Acts i. 22, x. 37, xiii. 24, xviii. 25, xix. 3, 4.

A.D. 90-100, John i. 25-33, iii. 23, x. 40.

It is best to defer the question of the origin of Christian baptism until the history of the rite in the centuries which followed has been sketched, for we know more clearly what baptism became after the year 100 than what it was before. And that method on which a great scholar[1] insisted when studying the old Persian religion is doubly to be insisted on in the study of the history of baptism and the cognate institution, the eucharist, namely, to avoid equally "the narrowness of mind which clings to matters of fact without rising to their cause and connecting them with the series of associated phenomena, and the wild and uncontrolled spirit of comparison, which, by comparing everything, confounds everything."

Our earliest detailed accounts of baptism are in the _Teaching of the Apostles_ (c. 90-120) and in Justin Martyr.

The _Teaching_ has the following:--

1. Now concerning baptism, thus baptize ye: having spoken beforehand all these things, baptize into the name of the Father and of the Son and of the Holy Spirit, in living water.

2. But if thou hast not living water, baptize into other water; if thou canst not in cold, in warm.

3. But if thou hast not either, pour water upon the head thrice, in the name of the Father and of the Son and of the Holy Spirit.

4. Now before the baptism, let him that is baptizing and him that is being baptized fast, and any others who can; but thou biddest him who is being baptized to fast one or two days before.

The "things spoken beforehand" are the moral precepts known as the two ways, the one of life and the other of death, with which the tract begins. This body of moral teaching is older than the rest of the tract, and may go back to the year A.D. 80.

Justin thus describes the rite in ch. lxi. of his first _Apology_, (c. 140):--

"I will also relate the manner in which we dedicated ourselves to God when we had been made new through Christ. As many as are persuaded and believe that what we teach and say is true, and undertake to be able to live accordingly, are instructed to pray and entreat God with fasting, for the remission of their sins that are past, we praying and fasting with them. Then they are brought by us where there is water, and are regenerated in the same manner in which we were ourselves regenerated. For in the name of God, the Father and Lord of the universe, and of our Saviour Jesus Christ and of the Holy Spirit, they then receive the washing with water."

In the sequel Justin adds:--

"There is pronounced over him who chooses to be born again, and has repented of his sins, the name of God the Father and Lord of the universe, he who leads to the laver the person that is to be washed calling Him by this name alone. For no one can utter the name of the ineffable God, and this washing is called Illumination (Gr. [Greek: phôtismos]), because they who learn these things are illuminated in their understandings. And in the name of Jesus Christ, who was crucified under Pontius Pilate, and in the name of the Holy Ghost, who through the prophets foretold all things about Jesus, he who is illuminated is washed."

In ch. xiv. of the dialogue with Trypho, Justin asserts, as against Jewish rites of ablution, that Christian baptism alone can purify those who have repented. "This," he says, "is the water of life. But the cisterns which you have dug for yourselves are broken and profitless to you. For what is the use of that baptism which cleanses the flesh and body alone? Baptize the soul from wrath, from envy and from hatred; and, lo! the body is pure."

In ch. xliii. of the same dialogue Justin remarks that "those who have approached God through Jesus Christ have received a circumcision, not carnal, but spiritual, after the manner of Enoch."

In after ages baptism was regularly called illumination. Late in the 2nd century Tertullian describes the rite of baptism in his treatise _On the Resurrection of the Flesh_, thus:

1. The flesh is washed, that the soul may be freed from stain.

2. The flesh is anointed, that the soul may be consecrated.

3. The flesh is sealed (_i.e._ signed with the cross), that the soul also may be protected.

4. The flesh is overshadowed with imposition of hands, that the soul also may be illuminated by the Spirit.

5. The flesh feeds on the body and blood of Christ, that the soul also may be filled and sated with God.

6. He also mentions elsewhere that the neophytes, after baptism, were given a draught of milk and honey. (The candidate for baptism, we further learn from his tract _On Baptism_, prepared himself by prayer, fasting and keeping of vigils.)

Before stepping into the font, which both sexes did quite naked, the neophytes had to renounce the devil, his pomps and angels. Baptisms were usually conferred at Easter and in the season of Pentecost which ensued, and by the bishop or by priests and deacons commissioned by him.

Such are the leading features of the rite in Tertullian, and they reappear in the 4th century in the rites of all the orthodox churches of East and West; Tertullian testifies that the Marcionites observed the particulars numbered one to six, which must therefore go back at least to the year 150. About the year 300, those desirous of being baptized were (a) admitted to the catechumenate, giving in their names to the bishop. (b) They were subjected to a scrutiny and prepared, as to-day in the western churches the young are prepared for confirmation. The catechetic course included instruction in monotheism, in the folly of polytheism, in the Christian scheme of salvation, &c. (c) They were again and again exorcized, in order to rid them of the lingering taint of the worship of demons. (d) Some days or even weeks beforehand they had the creed recited to them. They might not write it down, but learned it by heart and had to repeat it just before baptism. This rite was called in the West the _traditio_ and _redditio_ of the symbol. The Lord's Prayer was communicated with similar solemnity in the West [v.03 p.0365] (_traditio precis_). The creed given in Rome was the so-called Apostles' Creed, originally compiled as we now have it to exclude Marcionites. In the East various other symbols were used. (e) There followed an act of unction, made in the East with the oil of the catechumens blessed only by the priest, in the West with the priest's saliva applied to the lips and ears. The latter was accompanied by the following formula: "Effeta, that is, be thou opened unto odour of sweetness. But do thou flee, O Devil, for the judgment of God is at hand." (f) Renunciation of Satan. The catechumens turned to the west in pronouncing this; then turning to the east they recited the creed. (g) They stepped into the font, but were not usually immersed, and the priest recited the baptismal formula over them as he poured water, generally thrice, over their heads. (h) They were anointed all over with chrism or scented oil, the priest reciting an appropriate formula. Deacons anointed the males, deaconesses the females. (i) They put on white garments and often baptismal wreaths or chaplets as well. In some churches they had worn cowls during the catechumenate, in sign of repentance of their sins. (j) They received the sign of the cross on the brow; the bishop usually dipped his thumb in the chrism and said: "In name of Father, Son and Holy Ghost, peace be with thee." In laying his hands on their heads the bishop in many places, especially in the West, called down upon them the sevenfold spirit. (k) The first communion followed, with milk and honey added. (l) Usually the water in the font was exorcized, blessed and chrism poured into it, just before the catechumen entered it. (m) Easter was the usual season of baptism, but in the East Epiphany was equally favoured. Pentecost was sometimes chosen. We hear of all three feasts being habitually chosen in Jerusalem early in the 4th century, but fifty years later baptisms seem to have been almost confined to Easter. The preparatory fasts of the catechumens must have helped to establish the Lenten fast, if indeed they were not its origin.

Certain features of baptism as used during the earlier centuries must now be noticed. They are the following:--(1) Use of fonts; (2) Status of baptizer; (3) Immersion, submersion or aspersion; (4) Exorcism; (5) Baptismal formula and trine immersion; (6) The age of baptism; (7) Confirmation; (8) _Disciplina arcani_; (9) Regeneration; (10) Relation to repentance; (11) Baptism for the dead; (12) Use of the name; (13) Origin of the institution; (14) Analogous rites in other religions.

1. _Fonts._--The New Testament, the _Didach[=e]_, Justin, Tertullian and other early sources do not enjoin the use of a font, and contemplate in general the use of running or living water. It was a Jewish rule that in ablutions the water should run over and away from the parts of the body washed. In acts of martyrdom, as late as the age of Decius, we read of baptisms in rivers, in lakes and in the sea. In exceptional cases it sufficed for a martyr to be sprinkled with his own blood. But a martyr's death in itself was enough. Nearchus (_c._ 250) quieted the scruples of his unbaptized friend Polyeuctes, when on the scaffold he asked if it were possible to attain salvation without baptism, with this answer: "Behold, we see the Lord, when they brought to Him the blind that they might be healed, had nothing to say to them about the holy mystery, nor did He ask them if they had been baptized; but this only, whether they came to Him with true faith. Wherefore He asked them, Do ye believe that I am able to do this thing?"

Tertullian (_c._ 200) writes (_de Bapt._ iv.) thus: "It makes no difference whether one is washed in the sea or in a pool, in a river or spring, in a lake or a ditch. Nor can we distinguish between those whom John baptized (_tinxit_) in the Jordan and those whom Peter baptized in the Tiber." The custom of baptizing in the rivers when they are annually blessed at Epiphany, the feast of the Lord's baptism, still survives in Armenia and in the East generally. Those of the Armenians and Syrians who have retained adult baptism use rivers alone at any time of year.

The church of Tyre described by Eusebius (_H.E._ x. 4) seems to have had a font, and the church order of Macarius, bishop of Jerusalem (_c._ 311-335), orders the font to be placed in the same building as the altar, behind it and on the right hand; but the same order lays down that a font is not essential in cases of illness for "the Holy Spirit is not hindered by want of a vessel."

2. _Status of Baptizer._--Ignatius (_Smyrn._ viii.) wrote that it is not lawful to baptize or hold an _agap[=e]_ (Lord's Supper) without the bishop. So Tertullian (_de Bapt._ xvii.) reserves the right of admitting to baptism and of conferring it to the _summus sacerdos_ or bishop, Cyprian (_Epist._ lxxiii. 7) to bishops and priests. Later canons continued this restriction; and although in outlying parts of Christendom deacons claimed the right, the official churches accorded it to presbyters alone and none but bishops could perform the confirmation or seal. In the Montanist churches women baptized, and of this there are traces in the earliest church and in the Caucasus. Thus St Thekla baptized herself in her own blood, and St Nino, the female evangelist of Georgia, baptized king Mirian (see "Life of Nino," _Studia Biblica_, 1903). In cases of imminent death a layman or a woman could baptize, and in the case of new-born children it is often necessary.

3. _Immersion or Aspersion._--The _Didach[=e]_ bids us "pour water on the head," and Christian pictures and sculptures ranging from the 1st to the 10th century represent the baptizand as standing in the water, while the baptizer pours water from his hand or from a bowl over his head. Even if we allow for the difficulty of representing complete submersion in art, it is nevertheless clear that it was not insisted on; nor were the earliest fonts, to judge from the ruins of them, large and deep enough for such an usage. The earliest literary notices of baptism are far from conclusive in favour of submersion, and are often to be regarded as merely rhetorical. The rubrics of the MSS., it is true, enjoin total immersion, but it only came into general vogue in the 7th century, "when the growing rarity of adult baptism made the Gr. word [Greek: baptizô]) patient of an interpretation that suited that of infants only."[2] The _Key of Truth_, the manual of the old Armenian Baptists, archaically prescribes that the penitent admitted into the church shall advance on his knees into the middle of the water and that the elect one or bishop shall then pour water over his head.

4. _Exorcism._--The _Didach[=e]_ and Justin merely prescribe fasting, the use of which was to hurry the exit of evil spirits who, in choosing a _nidus_ or tenement, preferred a well-fed body to an emaciated one, according to the belief embodied in the interpolated saying of Matt. xvii. 21: "This kind (of demon) goeth not forth except by prayer and fasting." The exorcisms tended to become longer and longer, the later the rite. The English prayer-book excludes them, as it also excludes the renunciation of the devil and all his angels, his pomps and works. These elements were old, but scarcely primitive; and the archaic rite of the _Key of Truth_ (see PAULICIANS) is without them. Basil, in his work _On the Holy Spirit_, confesses his ignorance of how these and other features of his baptismal rite had originated. He instances the blessing of the water of baptism, of the oil of anointing and of the baptizand himself, the use of anointing him with oil, trine immersion, the formal renunciation of Satan and his angels. All these features, he says, had been handed down in an unpublished and unspoken teaching, in a silent and sacramental tradition.

5. _The Baptismal Formula._--The trinitarian formula and trine immersion were not uniformly used from the beginning, nor did they always go together. The _Teaching of the Apostles_, indeed, prescribes baptism in the name of Father, Son and Holy Ghost, but on the next page speaks of those who have been baptized into the name of the Lord--the normal formula of the New Testament. In the 3rd century baptism in the name of Christ was still so widespread that Pope Stephen, in opposition to Cyprian of Carthage, declared it to be valid. From Pope Zachariah (_Ep._ x.) we learn that the Celtic missionaries in baptizing omitted one or more persons of the Trinity, and this was one of the reasons why the church of Rome anathematized [v.03 p.0366] them; Pope Nicholas, however (858-867), in the _Responsa ad consulta Bulgarorum_, allowed baptism to be valid _tantum in nomine Christi_, as in the Acts. Basil, in his work _On the Holy Spirit_ just mentioned, condemns "baptism into the Lord alone" as insufficient. Baptism "into the death of Christ" is often specified by the Armenian fathers as that which alone was essential.

Ursinus, an African monk (in Gennad. _de Scr. Eccl._ xxvii.), Hilary (_de Synodis_, lxxxv.), the synod of Nemours (A.D. 1284), also asserted that baptism into the name of Christ alone was valid. The formula of Rome is, "I baptize thee in the name of Father and Son and Holy Spirit." In the East, "so-and-so, the servant of God, is baptized," &c. The Greeks add _Amen_ after each person, and conclude with the words, "Now and ever and to aeons of aeons, amen."

We first find in Tertullian trine immersion explained from the triple invocation, _Nam nec semel, sed ter, ad singula nomina in personas singulas tinguimur_: "Not once, but thrice, for the several names, into the several persons, are we dipped" (_adv. Prax._ xxvi.). And Jerome says: "We are thrice plunged, that the one sacrament of the Trinity may be shown forth." On the other hand, in numerous fathers of East and West, _e.g._ Leo of Rome, Athanasius, Gregory of Nyssa, Theophylactus, Cyril of Jerusalem and others, trine immersion was regarded as being symbolic of the three days' entombment of Christ; and in the Armenian baptismal rubric this interpretation is enjoined, as also in an epistle of Macarius of Jerusalem addressed to the Armenians (_c._ 330). In Armenian writers this interpretation is further associated with the idea of baptism into the death of Christ.

Trine immersion then, as to the origin of which Basil confesses his ignorance, must be older than either of the rival explanations. These are clearly aetiological, and invented to explain an existing custom, which the church had adopted from its pagan medium. For pagan lustrations were normally threefold; thus Virgil writes (_Aen._ vi. 229): _Ter socios pura circumtulit unda._ Ovid (_Met._ vii. 189 and _Fasti_, iv. 315), Persius (ii. 16) and Horace (_Ep._ i. 1. 37) similarly speak of trine lustrations; and on the last mentioned passage the scholiast Acro remarks: "He uses the words _thrice purely_, because people in expiating their sins, plunge themselves in thrice." Such examples of the ancient usage encounter us everywhere in Greek and Latin antiquity.

6. _Age of Baptism._--In the oldest Greek, Armenian, Syrian and other rites of baptism, a service of giving a Christian (_i.e._ non-pagan) name, or of sealing a child on its eighth day, is found. According to it the priest, either at the door of the church or at the home, blessed the infant, sealed it (this not in Armenia) with the sign of the cross on its forehead, and prayed that in due season ([Greek: en kairôi euthetôi]) or at the proper time (Armenian) it may enter the holy Catholic church. This rite announces itself as the analogue of Christ's circumcision.

On the fortieth day from birth another rite is prescribed, of _churching_ the child, which is now taken _into_ the church with its mother. Both are blessed by the clergy, whose petition now is that God "may preserve this child and cause him to grow up by the unseen grace of His power and made him worthy _in due season_ of the washing of baptism." As the first rite corresponds to the circumcision and naming of Jesus, so does the second to His presentation in the temple. These two rites really begin the catechumenate or period of instruction in the faith and discipline of the church. It depended on the individual how long he would wait for initiation. Whenever he felt inclined, he gave in his name as a candidate. This was usually done at the beginning of Lent. The bishop and clergy next examined the candidates one by one, and ascertained from their neighbours whether they had led such exemplary lives as to be worthy of admission. In case of strangers from another church certificates of character had to be produced. If a man seemed unworthy, the bishop dismissed him until another occasion, when he might be worthier; but if all was satisfactory he was admitted, in the West as a _competens_ or _asker_, in the East as a [Greek: phôtizomenos], _i.e._ one in course of being illumined. Usually two sponsors made themselves responsible for the past life of the candidate and for the sincerity of his faith and repentance. The essential thing was that a man should come to baptism of his own free will and not under compulsion or from hope of gain. Macarius of Jerusalem (_op. cit._) declares that the grace of the spirit is given in answer to our prayers and entreaties for it, and that even a font is not needful, but only the wish and desire for grace. Tertullian, however, in his work _On Baptism_, holds that even that is not always enough. Some girls and boys at Carthage had asked to be baptized, and there were some who urged the granting of their request on the score that Christ said: "Forbid them not to come unto Me" (Matt. xix. 14), and: "To each that asketh thee give" (Luke vi. 30). Tertullian replies that "We must beware of giving the holy thing to dogs and of casting pearls before swine." He cites 1 Tim. v. 22: "Lay not on thy hands hastily, lest thou share in another's sins." He denies that the precedents of the eunuch baptized by Philip or of Paul baptized _without hesitation_ by Simon (to which the other party appealed) were relevant. He dwells on the risk run by the sponsors, in case the candidates for whose purity they went bail should fall into sin. It is more expedient, he concludes, to delay baptism. Why should persons still in the age of innocence be in a hurry to be baptized and win remission of sins? Let people first learn to feel their need of salvation, so that we may be sure of giving it only to those who really want it. Especially let the unmarried postpone it. The risks of the age of puberty are extreme. Let people have married or be anyhow steeled in continence before they are admitted to baptism. It would appear from the homilies of Aphraates (_c._ 340) that in the Syriac church also it was usual to renounce the married relation after baptism. Cyril of Jerusalem, in his _Catecheses_, insists on "the longing for the heavenly polity, on the goodly resolution and attendant hope" of the catechumen (_Pro. Cat._ ch. 1.). If the resolution be not genuine, the bodily washing, he says, profits nothing. "God asks for nothing else except a goodly determination. Say not: How can my sins be wiped out? I tell thee, by willing, by believing" (ch. viii.). So again (_Cat._ 1. ch. iii.) "God gives not his holy treasures to the dogs; but where he sees the goodly determination, there he bestows the seed of salvation.... Those then who would receive the spiritual saving seal have need of a determination and will of their own.... Grace has need of faith on our part." In Jerusalem, therefore, whither believers flocked from all over Christendom to be buried, the official point of view as late as A.D. 350 was entirely that of Tertullian. Tertullian's scruples were not long respected in Carthage, for in Cyprian's works (_c._ 250.) we already hear of new-born infants being baptized. In the same region of Africa, however, Monica would not let her son Augustine be baptized in boyhood, though he clamoured to be. She was a conservative. In the Greek world thirty was a usual age in the 4th century for persons to be baptized, in imitation of Christ. It is still the age preferred by the Baptists of Armenia. But it was often delayed until the deathbed, for the primitive idea that mortal sins committed after baptism were sins against the Holy Spirit and unforgivable, still influenced men, and survived among the Cathars up to the 14th century. The fathers, however, of the 4th century emphasized already the danger of deferring the rite until men fall into mortal sickness, when they may be unconscious or paralysed or otherwise unable to profess their faith and repentance, or to swallow the viaticum. Gregory Theologus therefore (_c._ 340) suggests the age of three years as suitable for baptism, because by then a child is old enough, if not to understand the questions put to him, at any rate to speak and make the necessary responses. Gregory sanctions the baptism of infants only where there is imminent danger of death. "It is better that they should be sanctified without their own sense of it than that they pass away unsealed and uninitiated." And he justifies his view by this, that circumcision, which foreshadowed the Christian seal ([Greek: sphragis]), was imposed on the eighth day on those who as yet had no use of reason. He also urges the analogue of "the anointing of the doorposts, which preserved the first-born by things that have no sense." On such grounds was justified the transition of a baptism which began as a spontaneous act of [v.03 p.0367] self-consecration into an _opus operatum_. How long after this it was before infant baptism became normal inside the Byzantine church, we do not exactly know, but it was natural that mothers should insist on their children being liberated from Satan and safeguarded from demons as soon as might be. The change came more quickly in Latin than in Greek Christendom, and very slowly indeed in the Armenian and Georgian churches. Augustine's insistence on original sin, a doctrine never quite accepted in his sense in the East, hurried on the change.

7. _Confirmation._--In the West, however, the sacrament has been saved from becoming merely magical by the rite of confirmation or of reception of the Spirit being separated from the baptism of regeneration and reserved for an adult age. The English church confirms at fifteen or sixteen; the Roman rather earlier. The catechetic course, which formerly preceded the complete rite, now intervenes between its two halves; and the sponsors who formerly attested the worthiness of the candidate and received him up as _anadochi_ out of the font, have become god-parents, who take the baptismal vows vicariously for infants who cannot answer for themselves. In the East, on the contrary, the complete rite is read over the child, who is thus confirmed from the first. The Roman church already foreshadowed the change and gave a peculiar salience to confirmation as early as the 3rd century, when it decreed that persons already baptized by heretics, but reverting to the church should not be baptized over again, but only have hands laid on them. It was otherwise in Africa and the East. Here they insisted in such cases on a repetition of the entire rite, baptism and confirmation together. The Cathars (_q.v._) of the middle ages discarded water baptism altogether as being a Jewish rite, but retained the laying on of hands with the _traditio precis_ as sufficient initiation. This they called the spiritual baptism, and interpreted Matt. xxviii. 19, as a command to practise it, and not water baptism.

8. _Disciplina arcani._--The communication to the candidates of the Creed and Lord's Prayer was a solemn rite. Cyril of Jerusalem, in his instruction of the catechumens, urges them to learn the Creed by heart, but not write it down. On no account must they divulge it to unbaptized persons. The same rule already meets us in Clement of Alexandria before the year 200. In time this rule gave rise to what is called the _Disciplina arcani._ Following the fashion of the pagan mysteries in which men were only permitted to gaze upon the sacred objects after minute lustrations and scrupulous purifications, Christian teachers came to represent the Creed, Lord's Prayer and Lord's Supper as mysteries to be guarded in silence and never divulged either to the unbaptized or to the pagans. And yet Justin Martyr, Tertullian and other apologists of the 2nd century had found nothing to conceal from the eye and ear of pagan emperors and their ministers. In the 3rd century this love of mystification reached the pitch of hiding even the gospels from the unclean eyes of pagans. Probably Mgr. Pierre Battifol is correct in supposing that the _Disciplina arcani_ was more or less of a make-believe, a bit of belletristic trifling on the part of the over-rhetorical Fathers of the 4th and 5th centuries.[3] It is in them that the atmosphere of mystery attains a maximum of intensity. They clearly felt themselves called upon to out-trump the pagan _Mystae_. Yet it is inconceivable that men and women should spend years, even whole lives, as catechumens within the pale of the church, and really remain ignorant all the time of the Trinitarian Epiclesis used in baptism, of the Creed, and above all of the Lord's Prayer. Wherever the _Disciplina arcani_, _i.e._ the obligation to keep secret the formula of the threefold name, the creed based on it and the Lord's Prayer, was taken seriously, it was akin to the scruple which exists everywhere among primitive religionists against revealing to the profane the knowledge of a powerful name or magic formula. The name of a deity was often kept secret and not allowed to be written down, as among the Jews.

9. _Regeneration._--The idea of regeneration seldom occurs in the New Testament, and perhaps not at all in connexion with baptism; for in the conversation with Nicodemus, John iii. 3-8, the words "of water and" in v. 5 offend the context, spiritual re-birth alone being insisted upon in vv. 3, 6, 7 and 8; moreover, Justin Martyr, who cites v. 5, seems to omit them. Nor is there any mention of water in ch. i. 13, where, according to the oldest text, Christ is represented as having been born or begotten not of blood, nor of the will of the flesh, nor of the will of man, but of God.

In 1 Pet. i. 3, it is said of the saints that God the Father begat them anew unto a living hope by the resurrection of Jesus, and in v. 23 that they have been begotten again, not of corruptible seed, but of incorruptible through the word of God. But here again it is not clear that the writer has in view water baptism or any rite at all as the means and occasion of regeneration. In the conversation with Nicodemus we seem to overhear a protest against the growing tendency of the last years of the 1st century to substitute formal sacraments for the free afflatus of the spirit, and to "crib, cabin and confine" the gift of prophecy.

The passage where re-birth is best put forward in connexion with baptism is Luke iii. 22, where ancient texts, including the _Gospel of the Hebrews_, read, "Thou art my beloved Son, this day have I begotten Thee." These words were taken in the sense that Jesus was then re-born of the Spirit an adoptive Son of God and Messiah; and with this reading is bound up the entire adoptionist school of Christology. It apparently underlies the symbolizing of Christ as a fish in the art of the catacombs, and in the literature of the 2nd century. Tertullian prefaces with this idea his work on baptism. _Nos pisciculi secundum_ [Greek: ICHTHUN] _nostrum Jesum Christum in aqua nascimur_. "We little fishes, after the example of our _Fish_ Jesus Christ, are _born_ in the water." So about the year 440 the Gaulish poet Orientius wrote of Christ; _Piscis natus aquis, auctor baptismatis ipse est_. "A fish born of the waters is himself originator of baptism."

But before his time and within a hundred years of Tertullian this symbolism in its original significance had become heretical, and the orthodox were thrown back on another explanation of it. This was that the word [Greek: ICHTHUS] is made up of the letters which begin the Greek words meaning "Jesus Christ, Son of God, Saviour." An entire mythology soon grew up around the idea of re-birth. The font was viewed as the womb of the virgin mother church, who was in some congregations, for example, in the early churches of Gaul, no abstraction, but a divine aeon watching over and sympathizing with the children of her womb, the recipient even of hymns of praise and humble supplications. Other mythoplastic growths succeeded, one of which must be noticed. The sponsors or _anadochi_, who, after the introduction of infant baptism came to be called god-fathers and god-mothers, were really in a spiritual relation to the children they took up out of the font. This relation was soon by the canonists identified with the blood-tie which connects real parents with their offspring, and the corollary drawn that children, who in baptism had the same god-parent, were real brothers and sisters, who might not marry either each the other or real children of the said god-parent. The reformed churches have set aside this fiction, but in the Latin and Eastern churches it has created a distinct and very powerful marriage taboo.

10. _Relation to Repentance._--Baptism justified the believer, that is to say, constituted him a saint whose past sins were abolished. Sin after baptism excluded the sinner afresh from the divine grace and from the sacraments. He fell back into the status of a catechumen, and it was much discussed from the 2nd century onwards whether he could be restored to the church at all, and, if so, how. A rite was devised, called _exhomologesis_, by which, after a fresh term of repentance, marked by austerities more strict than any Trappist monk imposes on himself to-day, the persons lapsed from grace could re-enter the church. In effect this rite was a repetition of baptism, the water of the font alone being omitted. Such restoration could in the earlier church only be effected once. A second lapse from the state of grace entailed perpetual exclusion from the sacraments, the means of salvation. As has been remarked above, the terror of post-baptismal sin and the fact that only one restoration was allowable influenced many as late as the 4th century to remain catechumens all their lives, and, like Constantine, to receive baptism on the [v.03 p.0368] deathbed alone. The same scruples endured among the medieval Cathars. (See PENANCE and NOVATIANUS.)

11. _Baptism for the Dead._--Paul, in 1 Cor. xv. 29, glances at this as an established practice familiar to those whom he addresses. Three explanations are possible: (1) The saints before they were quickened or made alive together with Christ, were dead through their trespasses and sins. In baptism they were buried with Christ and rose, like Him, from the dead. We can, therefore, paraphrase v. 29 thus: "Else what shall they do which are baptized for their dead selves?" &c. It is in behalf of his own sinful, _i.e._ dead self, that the sinner is baptized and receives eternal life. (2) Contact with the dead entailed a pollution which lasted at least a day and must be washed away by ablutions, before a man is re-admitted to religious cult. This was the rule among the Jews. Is it possible that the words "for the dead" signify "because of contact with the dead"? (3) Both these explanations are forced, and it is more probable that by a make-believe common in all religions, and not unknown in the earliest church, the sins of dead relatives, about whose salvation their survivors were anxious, were transferred into living persons, who assumed for the nonce their names and were baptized in their behalf, so in vicarious wise rendering it possible for the sins of the dead to be washed away. The Mormons have this rite. The idea of transferring sin into another man or into an animal, and so getting it purged through him or it, was widespread in the age of Paul and long afterwards. Chrysostom says that the substitutes were put into the beds of the deceased, and assuming the voice of the dead asked for baptism and remission of sins. Tertullian and others attest this custom among the followers of Cerinthus and Marcion.

12. _Use of the Name._--In Acts iv. 7, the rulers and priests of the Jews summon Peter and inquire by what power or in what name he has healed the lame. Here a belief is assumed which pervades ancient magic and religion. Only so far as we can get away from the modern view that a person's name is a trifling accident, and breathe the atmosphere which broods over ancient religions, can we understand the use of the name in baptisms, exorcisms, prayers, purifications and consecrations. For a name carried with it, for those who were so blessed as to be acquainted with it, whatever power and influence its owner wielded in heaven or on earth or under the earth. A vow or prayer formulated in or through a certain name was fraught with the prestige of him whose name it was. Thus the psalmist addressing Jehovah cries (Ps. liv. 1): "Save me, O God, by Thy name, and judge me in Thy might." And in Acts iii. 16, it is the name itself which renders strong and whole the man who believed therein. In Acts xviii. 15, the Jews assail Paul because he has trusted and appealed to the name of a Messiah whom they regard as an overthrower of the law; for Paul believed that God had invested Jesus with a name above all names, potent to constrain and overcome all lesser powers, good or evil, in heaven or earth or under earth. Baptism then in the name or through the name or into the name of Christ placed the believer under the influence and tutelage of Christ's personality, as before he was in popular estimation under the influence of stars and horoscope. Nay, more, it imported that personality into him, making him a limb or member of Christ's body, and immortal as Christ was immortal. Nearly all the passages in which the word _name_ is used in the New Testament become more intelligible if it be rendered _personality_. In Rev. xi. 13, the revisers are obliged to render it by _persons_, and should equally have done so in iii. 4: "Thou hast a few _names_ (i.e. persons) in Sardis which did not defile their garments." (See CONSECRATION.)

13. _Origin of Christian Baptism._--When it is asked, Was this a continuance of the baptism of John or was it merely the baptism of proselytes?--a distinction is implied between the two latter which was not always real. In relation to the publicans and soldiers who, smitten with remorse, sought out John in the wilderness, his baptism was a purification from their past and so far identical with the proselyte's bath; but so far as it raised them up to be children unto Abraham and filled them with the Messianic hope, it advanced them further than that bath could do, and assured them of a place in the kingdom of God, soon to be established--this, without imposing circumcision on them; for the ordinary proselyte was circumcised as well as baptized. For the Jews, however, who came to John, his baptism could not have the significance of the proselyte's baptism, but rather accorded with another baptism undergone by Jews who wished to consecrate their lives by stricter study and practice of the law. So Epictetus remarks that he only really understands Judaism who knows "the baptized Jew" ([Greek: ton bebammenon]). We gather from Acts xix. 4, that John had merely baptized in the name of the coming Messiah, without identifying him with Jesus of Nazareth. The apostolic age supplied this identification, and the normal use during it seems to have been "into Christ Jesus," or "in the name of the Lord Jesus Christ," or "of Jesus Christ" simply, or "of the Lord Jesus Christ." Paul explains these formulas as being equivalent to "into the death of Christ Jesus," as if the faithful were in the rite raised from death into everlasting life. The _likeness_ of the baptismal ceremony with Christ's death and resurrection ensured a real union with him of the believer who underwent the ceremony, according to the well-known principle _in sacris simulata pro veris accipi_.

But opinion was still fluid about baptism in the apostolic age, especially as to its connexion with the descent of the Spirit. The Spirit falls on the disciples and others at Pentecost without any baptism at all, and Paul alone of the apostles was baptized. So far was the afflatus of the Spirit from being conditioned by the rite, that in Acts x. 44 ff., the gift of the Spirit was first poured out upon the Gentiles who heard the word preached so that they spoke with tongues, and it was only after these manifestations that they were baptized with water in the name of Jesus Christ at the instance of Peter. We can divine from this passage why Paul was so eager himself to preach the word, and left it to others to baptize.

But as a rule the repentant underwent baptism in the name of Christ Jesus, and washed away their sins before hands were laid upon them unto reception of the Spirit. Apollos, who only knew the baptism of John (Acts xviii. 24), needed only instruction in the prophetic _gnosis_ at the hands of Priscilla and Aquila in order to become a full disciple. On the other hand, in Acts xix. 1-7, twelve disciples, for such they were already accounted, who had been baptized into John's baptism, _i.e._ into the name of him that should follow John, but had not even heard of the Holy Spirit, are at Paul's instance re-baptized into the name of the Lord Jesus. Then Paul himself lays hands on them and the Holy Ghost comes upon them, so that they speak with tongues and prophecy. Not only do we hear of these varieties of practice, but also of the laying on of hands together with prayer as a substantive rite unconnected with baptism. The seven deacons were so ordained. And this rite of laying on hands, which was in antiquity a recognized way of transmitting the occult power or virtue of one man into another, is used in Acts ix. 17, by Ananias, in order that Paul may recover his sight and be filled with the Holy Ghost. Saul and Barnabas equally are separated for a certain missionary work by imposition of hands with prayer and fasting, and are so sent forth by the Holy Ghost. It was also a way of healing the sick (Acts xxviii. 8), and as such accompanied by anointing with oil (Jas. v. 14). The Roman church then had early precedents for separating confirmation from baptism. It would also appear that in the primitive age confirmation and ordination were one and the same rite; and so they continued to be among the dissident believers of the middle ages, who, however, often dropped the water rite altogether. (See CATHARS.) More than one sect of the 2nd century rejected water baptism on the ground that knowledge of the truth in itself makes us free, and that external material washing of a perishable body cannot contribute to the illumination of the inner man, complete without it. St Paul himself recognizes (1 Cor. vii. 14) that children, one of whose parents only is a believer, are _ipso facto_ not unclean, but _holy_. Even an unbelieving husband or wife is _sanctified_ by a believing partner. If we remember the force of the words [Greek: hagios hagiazô] (cf. 1 Cor. [v.03 p.0369] i. 2), here used of children and parents, we realize how far off was St Paul from the positions of Augustine.

The question arises whether Jesus Himself instituted baptism as a condition of entry into the Messianic kingdom. The fourth gospel (iii. 22, and iv. 1) asserts that Jesus Himself baptized on a greater scale than the Baptist, but immediately adds that Jesus Himself baptized not, but only His disciples, as if the writer felt that he had too boldly contradicted the older tradition of the other gospels. Nor in these is it recorded that the disciples baptized during their Master's lifetime; indeed the very contrary is implied. There remain two texts in which the injunction to baptize is attributed to Jesus, namely, Mark xvi. 16 and Matt. xxviii. 18-20. Of these the first is part of an appendix headed "of Ariston the elder" in an old Armenian codex, and taken perhaps from the lost compilations of Papias; as to the other text, it has been doubted by many critics, _e.g._ Neander, Harnack, Dr Armitage Robinson and James Martineau, whether it represents a real utterance of Christ and not rather the liturgical usage of the region in which the first gospel was compiled. The circumstance, unknown to these critics when they made their conjectures, that Eusebius Pamphili, in nearly a score of citations, substitutes the words "in My Name" for the words "baptizing them into the name of the Father and of the Son and of the Holy Ghost," renders their conjectures superfluous. Aphraates also in citing the verse substitutes "and they shall believe in Me"--a paraphrase of "in My Name." The first gospel thus falls into line with the rest of the New Testament.

14. _Analogous Rites in other Religions_ (see also PURIFICATION).--The Fathers themselves were the first to recognize that "the devil too had his sacraments," and that the Eleusinian, Isiac, Mithraic and other _mystae_ used baptism in their rites of initiation. But it is not to be supposed that the Christians borrowed from these or from any Gentile source any essential features of their baptismal rites. Baptism was long before the advent of Jesus imposed on proselytes, and existed inside Judaism itself.

It has been remarked that the developed ceremony of baptism, with its threefold renunciation, resembles the ceremony of Roman law known as _emancipatio_, by which the _patria potestas_ (or power of life and death of the father over his son) was extinguished. Under the law of the XII. Tables the father lost it, if he three times sold his child. This suggested a regular procedure, according to which the father sold his son thrice into _mancipium_, while after each sale the fictitious vendee enfranchized the son, by _manumissio vindicta_, _i.e._ by laying his rod (_vindicta_) on the slave and claiming him as free (_vindicatio in libertatem_). Then the owner also laid his rod on the slave, declaring his intention to enfranchise him, and the _praetor_ by his _addictor_ confirmed the owner's declaration. The third _manumission_ thus gave to the son and slave his freedom. It is possible that this common ceremony of Roman law suggested the triple _abrenunciatio_ of Satan. Like the legal ceremony, baptism freed the believer from one (Satan) who, by the mere fact of the believer's birth, had power of death over him. And as the legal manumission dissolved a son's previous agnatic relationships, so, too, the person baptized gave up father and mother, &c., and became one of a society of brethren the bond between whom was not physical but spiritual. The idea of adoption in baptism as a son and heir of God was almost certainly taken by Paul from Roman law.

The ceremony of turning to the west three times with renunciation of the Evil One, then to the east, is exactly paralleled in a rite of purification by water common among the Malays and described by Skeat in his book on Malay magic. If the Malay rite is not derived through Mahommedanism from Christianity, it is a remarkable example of how similar psychological conditions can produce almost identical rites.

The idea of spiritual re-birth, so soon associated with baptism, was of wide currency in ancient religions. It is met with in Philo of Alexandria and was familiar to the Jews. Thus the proselyte is said in the Talmud to resemble a child and must bathe in the name of God. The Jordan is declared in 2 Kings v. 10 to be a cleansing medium, and Naaman's cure was held to pre-figure Christian baptism. Jerome relates that the Jew who taught him Hebrew communicated to him a teaching of the Rabbi Baraciba, that the inner man who rises up in us at the fourteenth year after puberty (_i.e._ at 29) is better than the man who is born from the mother's womb.

In a Paris papyrus edited by Albr. Dieterich (Leipzig, 1903) under the title of _Eine Mithrasliturgie_, an ancient mystic describes his re-birth in impressive language. In a prayer addressed to "First birth of my birth, first beginning (_or_ principle) of my beginning, first spirit of the spirit in me," he prays "to be restored to his deathless birth (_genesis_), albeit he is let and hindered by his underlying nature, to the end that according to the pressing need and spur of his longing he may gaze upon the deathless principle with deathless spirit, through the deathless water, through the solid and the air; that he may be re-born through reason (_or_ idea), that he may be consecrated, and the holy spirit breathe in him, that he may admire the holy fire, that he may behold the abyss of the Orient, dread water, and that he may be heard of the quickening and circumambient ether; for this day he is about to gaze on the revealed reality with deathless eyes; a mortal born of mortal womb, he has been enhanced in excellence by the might of the All-powerful and by the right hand of the Deathless one," &c.

This is but one specimen of the pious ejaculations, which in the first centuries were rising from the lips of thousands of _mystae_, in Egypt, Asia Minor, Italy and elsewhere. The idea of re-birth was in the air; it was the very keynote of all the solemn initiations and mysteries--Mythraic, Orphic, Eleusinian--through which repentant pagans secured pardon and eternal bliss. Yet there is not much evidence that the church directly borrowed many of its ceremonies or interpretations from outside sources. They for the most part originated among the believers, and not improbably the outside cults borrowed as much from the church as it from them.

AUTHORITIES.--The following ancient works are recommended: Tertullian, _De Baptismo_ (edition with introd. J. M. Lupton, 1909); Cyril of Jerusalem, _Catecheses_; Basil, _De Spiritu Sancto; Constitutiones Apostolicae_; Gregory Nazianzen, _Orat. 40_; Gregory Nyss., _Oratio in eos qui differunt baptismum; Sacramentary_ of Serapion of Thmuis; Augustine, _De Baptismo contra Donatistas_; Jac. Goar, _Rituale Graecorum_ (gives the current Greek rites); F. C. Conybeare, _Rituale Armenorum_ (the oldest forms of Armenian and Greek rites); Gerard G. Vossius, _De Baptismo_ (Amsterdam, 1648); Edmond Martene, _De Ant. Ecclesiae Ritibus_ (gives Western rites) (Bassani, 1788). The modern literature is infinite; perhaps the most exhaustive works are W. F. Höfling, _Das Sacrament der Taufe_ (Erlangen, 1859): Jos. Bingham's _Antiquities_ (London, 1834), and W. Wall, _On Infant Baptism_ (London, 1707); J. Anrich, _Das antike Mysterienwesen_ (Göttingen, 1894), details the corresponding rites of the Greek mysteries, also A. Dieterich, _Eine Mithras Liturgie_ (Leipzig, 1903); J. C. Suicer, _Thesaurus, sub voce [Greek: baptisma]_; Ad. Harnack, _Dogmengeschichte_ (Freiburg im Br. 1894); L. Duchesne, _Origines du culte chrétien_ (Paris, 1898); Mgr. P. Batiffol, _Etudes historiques_ (Paris, 1904); J. C. W. Augusti, _Denkwürdigkeiten_ (Leipzig, 1829-1831); _Monumenta Ecclesiae Liturgica_ by Dom Cabrol and Dom Leclercq (Paris, 1902) (a summary of all liturgical passages given in the early Fathers); Corblet, _Histoire du sacrement de baptême_ (2 vols. Paris, 1881-1882).

(F. C. C.)

[1] James Darmesteter, in "Introd. to the Vendidad," in the _Sacred Books of the East_.

[2] Rogers' essay on Baptism and Christian Archaeology in _Studia Biblica_, vol. v.

[3] _Études historiques, Essai sur Disc. arc._ (Paris 1902).

BAPTISTE, NICOLAS ANSELME (1761-1835), French actor, was born in Bordeaux on the 18th of June 1761, the elder son of Joseph François Anselme, a popular actor. His mother played leading parts in tragedy, and both his parents enjoyed the protection of Voltaire and the friendship of Lekain. It was probably under the auspices of the latter that Nicolas Anselme made his first appearance as de Belloy in _Gaston et Bayard_; and shortly afterwards, under the name of Baptiste, he made a contract to play young lover parts at Arras, where he also appeared in opera and even in pantomime. From Rouen, where he had three successful years, his reputation spread to Paris and he was summoned to the new theatre which the comedian Langlois-Courcelles had just founded, and where he succeeded, not only in making an engagement for himself, but in bringing all his family, father, mother, wife and brother. They were thus distinguished in the playbills: Baptiste, _aîné_, Baptiste _père_, Baptiste _cadet_, Madame Baptiste _mère_, Madame Baptiste _bru_. This resulted in the pun of calling a play in which they all appeared _une pièce de baptistes_. Nicolas soon obtained the public favour, specially in La Martellière's mediocre _Robert, chef de [v.03 p.0370] brigands_, and as Count Almaviva, in Beaumarchais' _La Mère coupable_. His success in this was so great that the directors of the Théâtre de la République--who had already secured Talma, Dugazon and Madame Vestris--hastened to obtain his services, and, in order to get him at once (1793), paid the 20,000 francs forfeit which he was obliged to surrender on breaking his contract. Later he, as well as his younger brother, became _sociétaire_. Nicolas took all the leading parts in comedy and tragedy. As he grew older his special _forte_ lay in noble fathers. After a brilliant career of thirty-five years of uninterrupted service, he retired in 1828. But, after the revolution of 1830, when the Théâtre Français was in great straits, the brothers Baptiste came to the rescue, reappeared on the stage and helped to bring back its prosperity. The elder died in Paris on the 1st of December 1835. The younger brother, Paul Eustache Anselme, known as BAPTISTE _cadet_ (1765-1839), was also a comedian of great talent, and had a long and brilliant career at the Comédie Française, where he made his _début_ in 1792 in _L'Amour et l'intérêt_.

BAPTISTERY (_Baptisterium_, in the Greek Church [Greek: phôtistêrion]), the separate hall or chapel, connected with the early Christian Church, in which the catechumens were instructed and the sacrament of baptism administered. The name baptistery is also given to a kind of chapel in a large church, which serves the same purpose. The baptistery proper was commonly a circular building, although sometimes it had eight and sometimes twelve sides, and consisted of an ante-room ([Greek: proaulios oikos]) where the catechumens were instructed, and where before baptism they made their confession of faith, and an inner apartment where the sacrament was administered. In the inner apartment the principal object was the baptismal font ([Greek: kolumbêthra], or _piscina_), in which those to be baptized were immersed thrice. Three steps led down to the floor of the font, and over it was suspended a gold or silver dove; while on the walls were commonly pictures of the scenes in the life of John the Baptist. The font was at first always of stone, but latterly metals were often used. Baptisteries belong to a period of the church when great numbers of adult catechumens were baptized, and when immersion was the rule. We find little or no trace of them before Constantine made Christianity the state religion, _i.e._ before the 4th century; and as early as the 6th century the baptismal font was built in the porch of the church and then in the church itself. After the 9th century few baptisteries were built, the most noteworthy of later date being those at Pisa, Florence, Padua, Lucca and Parma. Some of the older baptisteries were very large, so large that we hear of councils and synods being held in them. It was necessary to make them large, because in the early Church it was customary for the bishop to baptize all the catechumens in his diocese (and so baptisteries are commonly found attached to the cathedral and not to the parish churches), and also because the rite was performed only thrice in the year. (See BAPTISM.) During the months when there were no baptisms the baptistery doors were sealed with the bishop's seal. Some baptisteries were divided into two parts to separate the sexes; sometimes the church had two baptisteries, one for each sex. A fireplace was often provided to warm the neophytes after immersion. Though baptisteries were forbidden to be used as burial-places by the council of Auxerre (578) they were not uncommonly used as such. Many of the early archbishops of Canterbury were buried in the baptistery there. Baptisteries, we find from the records of early councils, were first built and used to correct the evils arising from the practice of private baptism. As soon as Christianity made such progress that baptism became the rule, and as soon as immersion gave place to sprinkling, the ancient baptisteries were no longer necessary. They are still in general use, however, in Florence and Pisa. The baptistery of the Lateran must be the earliest ecclesiastical building still in use. A large part of it remains as built by Constantine. The central area, where is the basin of the font, is an octagon around which stand eight porphyry columns, with marble capitals and entablature of classical form; outside these are an ambulatory and outer walls forming a larger octagon. Attached to one side, towards the Lateran basilica, is a fine porch with two noble porphyry columns and richly carved capitals, bases and entablatures. The circular church of Santa Costanza, also of the 4th century, served as a baptistery and contained the tomb of the daughter of Constantine. This is a remarkably perfect structure with a central dome, columns and mosaics of classical fashion. Two side niches contain the earliest known mosaics of distinctively Christian subjects. In one is represented Moses receiving the Old Law, in the other Christ delivers to St Peter the New Law--a charter sealed with the X P monogram.

Another baptistery of the earliest times has recently been excavated at Aquileia. Ruins of an early baptistery have also been found at Salona. At Ravenna exist two famous baptisteries encrusted with fine mosaics, one of them built in the middle of the 5th century, and the other in the 6th. To the latter date also belongs a large baptistery decorated with mosaics at Naples.

In the East the metropolitan baptistery at Constantinople still stands at the side of the mosque which was once the patriarchal church of St Sophia; and many others, in Syria, have been made known to us by recent researches, as also have some belonging to the churches of North Africa. In France the most famous early baptistery is St Jean at Poitiers, and other early examples exist at Riez, Fréjus and Aix. In England, a detached baptistery is known to have been associated with the cathedral of Canterbury.

See Hefele's _Concilien_, _passim_; Du Cange, _Glossary_, article "Baptisterium"; Eusebius, _Hist. Eccl._ x. 4; Bingham's _Antiquities of the Christian Church_,