A Bank, in its simplest form, is an institution for the safe-keeping of money; but the commercial bank of to-day is designed to render the public many varied and important services.

The general utility of commercial banks may be stated as follows:

1. They provide a place for the safe-keeping of money and securities.

2. They afford a business man an opportunity to borrow money to carry on his enterprises while his capital is locked up in merchandise or in the hands of his debtors. The credit of many mercantile houses is worth as much to them as the capital they possess.

3. They save the transmission of money from one place to another, thus avoiding great risks and keeping money in more active circulation.

Settlements are effected by issuing to customers (a) bankers' drafts; (b) bills of exchange ; (c) letters of credit.

4. They facilitate the payment of bills by permitting money deposited to be withdrawn upon a simple order called a check. This check when issued serves the business man in various ways, as follows: a. It saves time in paying large sums of money.

b. It obviates the risk that attends the handling of money.

c. It constitutes a record of expenditures and furnishes the business man convenient data from which to make entries, in his books.

d. When the check is canceled it serves the purpose of a receipt.

Fully 90% of bank bookkeeping grows out of the use and collection of checks and other negotiable instruments.

5. By issuing letters of credit they afford people who travel a means of securing money in distant places without risk.

6. They afford excellent facilities for the collection of negotiable paper, - bills, notes, bonds, coupons, etc.

7. They are often a source of useful business information pertaining to investments and other matters.

8. They are a means of organizing capital.

9. They tend to encourage thrift, honesty, and punctuality.

Sources of a Bank's Profits. - The principal sources of a bank's profits may be specified as follows:

1. Money earned for discounting business paper and from lending money on good security. The available funds of a bank for lending purposes accrue from a. Amounts paid in by stockholders.

b. Amounts deposited by individuals, corporations, bankers, etc.

c. Accumulated surplus.

2. Charges for collecting notes, drafts, etc.

3. Interest upon bonds deposited with the United States Treasurer to secure circulation, if it is a national bank.

4. Fees for issuing drafts, bills of exchange, etc.

5. Profit on circulation, if it is a national bank.

Sources of a Bank's Expenses. - The principal sources of a bank's expenses may be specified as follows:

1. Interest on special deposits.

2. Fees for collecting foreign paper.

3. Taxes.

4. Salaries and various other office expenses.

Kinds of Banks. - Banks may be classified as follows: 1. National. 2. State. 3. Private.