pecial protection except the
water-mark in the paper. They are never reissued after being once returned
to the bank, and their average life is very short, about six weeks, so that
a dirty or worn Bank of England note is practically never seen. This
arrangement, coupled with the difficulty of negotiating forged notes in
England, the lowest denomination being L5, accounts for the comparative
immunity from forgery of the bank's issues.

BANK RATE, a term used in financial circles to designate the rate of
discount charged in the chief monetary centres by the state or leading
bank, as opposed to the open-market rate. (See MARKET: _Money market_.)

[Sidenote: Definition.]

BANKRUPTCY (from Lat. _bancus_ or Fr. _banque_, table or counter, and Lat.
_ruptus_, broken), the status of a debtor who has been declared by judicial
process to be unable to pay his debts. Although the terms "bankruptcy" and
"insolvency" are sometimes used indiscriminately, they have in legal and
commercial usage distinct significations. When a person's financial
liabilities are greater than his means of meeting them, he is said to be
"insolvent"; but he may nevertheless be able to carry on his business
affairs by means of credit, paying old debts by incurring new ones, and he
may even, if fortunate, regain a position of solvency without his creditors
ever being aware of his true condition. And even when his insolvency
becomes public and default occurs, a debtor may still avert bankruptcy if
he is able to effect a voluntary arrangement with his creditors. A debtor
may thus be insolvent without becoming bankrupt, but he cannot be a
bankrupt without being insolvent, for bankruptcy is a legal declaration of
his insolvency and operates as a statutory system for the administration of
his property, which is thereby taken out of his personal control.

[Sidenote: Early methods.]

In primitive communities bankruptcy systems were unknown. Individual
creditors were left to pursue their remedies by such means as the law or
practice of the community might sanction, and these were generally of a
very drastic character. Under the Roman law of the Twelve Tables, the
creditors might, as a last resort, cut the debtor's body into pieces, each
of them taking his proportionate share; and although Blackstone in quoting
this law appears to cast some doubt upon its too literal interpretation,
there can be no doubt that the power of selling the debtor and his family
into slave