The common course of business is this. A B having to receive 50,000 l. from C D takes C D's cheque on a banker crossed, as it is called, and, therefore, only payable to another banker. He pays that cheque to his own credit with his own banker, who presents it to the banker on whom it is drawn, and if good it is an item between them in the general clearing or settlement of the afternoon. But this is evidently a very refined machinery, which a panic will be apt to destroy. At the first stage A B may say to his debtor C D, 'I cannot take your cheque, I must have bank-notes.' If it is a debt on securities, he will be very apt to say this. The usual practice--credit being good--is for the creditor to take the debtor's cheque, and to give up the securities. But if the 'securities' really secure him in a time of difficulty, he will not like to give them up, and take a bit of paper--a mere cheque, which may be paid or not paid. He will say to his debtor, 'I can only give you your securities if you will give me bank-notes.' And if he does say so, the debtor must go to his bank, and draw out the 50,000 L. if he has it. But if this were done on a large scale, the bank's 'cash in house' would soon be gone; as the Clearing-house was gradually superseded it would have to trench on its deposit at the Bank of England; and then the bankers would have to pay so much over the counter that they would be unable to keep much money at the Bank, even if they wished. They would soon be obliged to draw out every shilling. The diminished use of the Clearing-house, in consequence of the panic, would intensify that panic. By far the greater part of the bargains of the country in moneyed securities is settled on the Stock Exchange twice a month, and the number of securities then given up for mere cheques, and the number of cheques then passing at the Clearing-house are enormous. If that system collapse, the number of failures would be incalculable, and each failure would add to the discredit that caused the collapse. The non-banking customers of the Bank of England would be discredited as well as other people; their cheques would not be taken any more than those of others; they would have to draw out bank-notes, and the Bank reserve would not be enough for a tithe of such payments.