1. We have seen in a former chapter that from the time the word "Banker" was first used it meant a person who bought Money by means of his Credit, or Promise to pay an equal sum either on demand, or at some future time. In the business of the Exchanges, those are termed "banking operations" which consist in buying and selling Bills. A "Banker" also buys other Debts such as Bills of Exchange by means of his own Credit, by creating fresh Debts. Hence the business of a merchant is to buy and sell commodities with Money and Debts: the essential business of a "Banker" is to buy Money and Debts, by creating other Debts. A "Banker" is therefore essentially a dealer in Debts, or Credit: though he sometimes adds other species of monetary business to this.

In modern practice a Banker may stand in four relations to his Customer -

1. As the Purchaser from him of Money or Debts.

2. As his Agent or Trustee, or Bailee of his Money and Valuable Securities, i.e. Securities for Money and Convertible Securities; these are termed Banking Securities.

3. As the Pawnee of the same.

4. As his Warehouseman for plate, specie, jewels, deeds, etc, not being Banking Securities.

The Duties, Eights, and Liabilities between a banker and his customer are separate and distinct in all these relations, and we must now explain them.