In this manner, all the money-dealing of this coun try, which cannot be transacted without remitting specie, is transferred to London. The payments of London, originating in its own extended commerce, and in its great wealth and population, are of them selves immense. These are still further increased by the payment of the interest on the national debt, which is issued every quarter from the Bank of Eng land ; and London having also, in the course of the late wars, grown up to be in some degree the com mercial metropolis, both of America and of Europe, it has been found convenient to transfer the payment of foreign bills to it from all parts. In consequence of these extended transactions, London has its debtors and creditors in every quarter of the kingdom. It is the general centre of all money-dealing, and there being, on this account, a greater demand in the country for money in London, than there is in Lon don for money in the country, bills on London are invariably sold in money market of the country for a premium. The currency of every other bank is limited in its circulation within particular districts, and cannot, therefore, be employed in transacting the payments of distant places. But money in London is a commodity in universal request, and bills for its payment constitute a medium of exchange common to the whole country.
All the various money-dealers who are dispersed throughout the kingdom, require to be provided with a stock of this common currency in order to carry on their business, and, for this purpose, they find it necessary to establish a credit on the metropolis, on which, for a suitable premium, drafts may be obtained from them at all times. By thus transferring the pay ments of the country, to be settled in one general ac count in the metropolis, both the expence and trouble of making remittances between distant places has been greatly diminished. It would be interesting if we could collect any exact account of the progressive diminution which took place, in consequence of this improved system of banking, in the expence of ma naging the cash transactions of the country. But unfortunately those instructive facts which illustrate the progress and internal structure of society, though of far more real importance than the accounts of wars and battles, seldom attract the same attention. On this account, all traces of them are frequently lost before their importance is discovered, and the future inauirer finds himself reduced either to glean from oral tradition, or ilvm the passing and imperhet re. cords of the the scanty materials of' domestic history. From some inquiries on this subject, made by a Committee of the House of Commons in 1780, we find, according to the evidence of several of the col• lectors, that, before this period, the mode of remitting the public revenue to the treasury was both irregu lar, cumbersome, and expensive. In Scotland there was no certain or regular channel of remitting to the metropolis,' and the remittances were not only very uncertain as to the time, but the collectors, not being always able to procure bills, were frequently under the necessity of remitting to the Receiver-General the actual money which they had collected. In differ ent parts of England the same difficulties bad, at a former period, been experienced in the remitting of the public revenue. From about the year 1740, it appears, that a premium bad been paid to those who undertook the charge of remitting the money, of from 20s. to 2s. 6d. per cent. This premium, as the country advanced in wealth and industry, was gra dually diminished, and about the year 1778, it was entirely done away, the dates of the bills drawn on London being also at the same time shortened. In 1764, the collector of the Wales district paid 78. per cent. for bills on London, and in 1774, a premium of 2s. 6d. per cent. was paid by the collector of Dorset shire, for bills payable on London at 40 days date.
Even so late as the year 1780, though the collectors found no difficulty in the remitting of the public' re venue, it was chiefly from merchants and manufac turers that they procured bills on the metropolis. Only a small part of their remittances were made through the medium of the country banks, and in all cases security was required for the whole sum re mitted. Since the general establishment of banks, and • the consequent increase of commercial confi dence, the largest sums are now remitted from the remotest parts with the most perfect regularity, and without either premium or security; the only advan tage derived by the banker from the transaction, be ing the use of the money for a certain number of days, varying in proportion to the distance front London.
All those complicated payments of the country, which are transferred to London, are finally settled by the London bankers, with specie or with notes the Bank of England, it being the practice to use no other currency in the payments of the metropolis ; and in managing those extensive money-dealings, they still act upon the principle of collecting the insulated transactions of individuals into one common account, and this account is brought to a general balance. For this purpose a clerk, it appears, is dispatched from each banker, at an appointed hour in the afternoon, and a meeting Qf the whole having taken place in a room provided for the purpose, each clerk exchanges the drafts on other bankers, received at his own house, for the drafts on his own house, received at the houses of other banker& The balances of the seve. ral bankers being then transferred tram one ano ther, in a manner which it is unnecessary to explain in detail, the several accounts are finally wound up by each clerk into one balance, and it is only for this single Wince that each banker has to provide specie or notes. By this contrivance, so great a saying of cash is effected, that though the daily transactions of those bankers are calculated to amount to nearly L. 5,000,000, about L. 220,000 of bank-notes is ge nerally found sufficient for the discharge of the seve ral balances due at the settlement of the account. Other devices are also put in practice by these active and ingenious money-dealers, for economising the use of cash. Many bankers are allowed to have a general cash-account with the Bank of England, in ' which, if they are careful to keep a supply of good Ms, they always procure whatever cash they re quire on a day s notice. For the same purpose also of preventing any waste of the circulating medium, accredited brokers are in the habit of hourly walking Lombard Street, and of borrowing the superfluous cash of one broker and lending it to another, for a day, a week, or any longer period, to be repaid when called for; and so nicely is the scale adjusted by those various devices, that the most opulent houses are frequently accommodated with a supply of cash before three o'clock, to be repaid by a draft at the general balance of accounts, which takes place in the afternoon. • The recent policy of the Bank of England has also tended greatly to favour those economical con trivances of the inferior bankers. The daily demand made upon them by the Bank for the amount of bills accepted and payable at their several houses, is of course considerable, and was formerly made at an early hour, before the notes were issued for bills dis counted on the same day, and without any previous notice to the bankers of the demands for which they might be liable, and of which they had no means of judging. For some time past the Bank has adopted a different practice, having notified the amount of the demand at an earlier hour, and taken payment at four in the afternoon, receiving for part of the sum such drafts or bills as the bankers may happen to hold in place of bank-notes.