In  this  operation,  vast  as  it  is,  there  is  only  occasional  need
of  gold  or  silver,  and  no  use  made  of  bank-notes,  except  to
redeem  them.  In  the  great  and  direct  movements  of  domeslae
exchange,  by  which  cities  and  districts  settle  for  their  mutual
purchases,  the  chief  agency  is  the  books  of  banks,  and  into
these  books  the  whole  business  finds  its  way ;  the  operation  is
completed  with  but  small  aid  from  either  coin,  bullion  or  bank-
notes. The  latter  enter  more  largely  into  the  business,  becaose
they  are  issued  for  circulation,  and  are  thus  used  until  they
arrive  in  banks  which  employ  them  as  a  set-off  against  their
own.  It  is  not  necessary,  however,  for  the  successful  accom-
plishment of  this  business,  that  the  banks  which  conduct  it
should  be  anything  else  than  banks  of  deposit  and  discoonti
without  specie,  and  without  the  power  to  issue  notes.  In  this
case,  the  only  change  in  the  business  would  be  that  the  place  of
the  notes  would  be  supplied  by  checks  and  drafts.  The  parties
who  receive  and  deposit  the  notes  would  draw  upon  their  debtors
for  the  same  amoxmt,  and  receive  it  through  the  banks,  thereby
giving  to  the  deposit  banks  the  same  amount  of  claims  upon
each  other  as  the  notes  would  give  to  banks  of  circulation*  It
is  not  intended  to  say  that  the  notes  are  not  the  most  conTO-
nient,  but  simply  that  this  great  discharge  of  mutual  obligations
is  not  dependent  on  them  for  efficacy.  Other  meaus  of  effecting
it,  with  even  superior  facility  and  economy,  may  yet  be  found.
CHAPTER   XII.
FAIRS.
