Front Page Titles (by Subject) Results of the Cheque Bank System. - Money and the Mechanism of Exchange
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Results of the Cheque Bank System. - William Stanley Jevons, Money and the Mechanism of Exchange 
Money and the Mechanism of Exchange (New York: D. Appleton and Co. 1876).
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Results of the Cheque Bank System.
I have thought it quite suitable to this book to enter somewhat minutely into the actual and possible work done by the Cheque Bank, because, if successful, the institution opens an indefinite sphere for financial improvement. The institution is, indeed, at present a mere experiment, undertaken at the risk of shareholders, and it can only succeed by offering conveniences to the public and the body of bankers. It may succeed in some of its schemes, and not in others, but in any case it will tend to replace coin payments by cheque payments, to be balanced off in the general London clearing. The profits of the bank depend upon the very small charge of 1/5 of a penny for each cheque, and the interest on deposits. The amount of deposits remaining undrawn depends upon three circumstances: (1) the time before the cheque is utilized; (2) the time it is in circulation, or travelling about, and (3) the difference between the sum drawn and that deposited. The average duration of circulation, I am informed, was lately ten days, but many cheques have already been out a year.
I should add that, in describing with some detail the operations of the Cheque Bank, I have no interest in the success of the institution other than a strictly scientific interest. In any case it is a most ingenious innovation, and if successful cannot fail to benefit the community in a high degree, adding a new feature to a banking system already wonderfully organized.
Foreign Bills of Exchange
In early times foreign trade consisted in the direct exchange of commodities. A caravan set out with a variety of manufactured articles, across the deserts of Arabia or Sahara, and came back with the ivory, spices, and other valuable raw produce obtained by barter. In later times the merchant loaded his own ship and sent her forth on an adventure, trusting that his shipmaster would sell the cargo to advantage, and, with the proceeds, bring back another cargo to be sold to great profit at home. Trade was thus evidently reciprocal, and what was sent out paid for what was brought back, so that little or no money was kept idle in the mean time.
Wherever this direct reciprocal exchange did not exist it was necessary either to transmit metallic money, or to devise some mode of transferring debts. Now the transmission of money not only causes the loss of interest during the interval of transit, but leads to the expense of guarding it, and the liability of total loss. Many centuries ago accordingly, it was discovered that the use of paper documents would economize, if not altogether render needless, the use of metallic money in foreign trade.