ment of the bonds when due. Sometimes such purchases are made by
the issue of stock, establishing the right of the seller to a certain
undivided share in the wealth controlled by the company. In this case the
time of final settlement is indefinitely postponed, to be fixed by limits
of the charter or by a vote of the stock-holders. All these certificates
of indebtedness serve to a limited extent in exchange of property. So far
as they enter into commerce, after the first transaction, they are simply
articles of purchase and sale, having a more or less established market
value. Since they usually represent an accumulating interest or a
provisional dividend, the market value is constantly fluctuating, and they
can therefore serve almost no purpose of currency.

The ease with which such notes, bonds and stock can be made the basis of a
single purchase in establishing some enterprise gives to them an
indefinite influence in trade, sometimes immensely extending the apparent
purchasing power of a community. The advantages and disadvantages of such
deferred settlement are so varied and important as to make it worth while
to treat the subject more extensively than is proper in this analysis, and
such treatment will be found in Chapter XII.

Chapter XI. Banks And Banking.

_Origin of banks._--Attention has been called to the banks of the country
as a most important part of the machinery of exchange. It is proper to
describe more fully the nature of the machine and its operations. A clear
understanding of the character and process of banking on the part of all
the people both extends its influence and diminishes its dangers. Banking,
like everything else in civilization, has had a natural growth. The
different steps in its growth have been devised for the sake of meeting
the needs of a growing commerce, and banking can exist only where
commercial transactions are frequent and constant.

The word bank, distinctly related to the English word bench, is supposed
to have been adopted from the fact that early Jewish dealers in money sat
by a bench in the streets of Italian cities. The commercial city of Venice
is supposed to have been the seat of the first organization distinctly
named a bank. This was a corporation of money lenders who handled their
capital in the form of coin by exchanging it for notes of individuals.
This was as early as the twelfth century. Since that time in every
civilized community there has been experi