In a former sectionl we have noticed the general powers of a bank in dealing in negotiable paper and securities. It has the prima facie power to purchase bills of exchange2 at the place where it is authorized to do business.3 It may buy and sell negotiable bonds,4 or make exchanges of government bonds for customers.5 It is a legitimate feature of the banking business for one bank to cash checks or drafts upon another bank,6 and it may act as agent in making loans of money or of special deposits for customers.7 Exchange purchases when made by one bank for another bank have been held to be confined to drafts upon the particular bank which made the purchase.8 Letters of credit are nothing more than letters of guaranty made by one bank to another. The rules of law would not vary as between the two engagements. This matter will be discussed under the head of "Acceptance." When the bank is agent to loan moneys it is not liable as debtor,9 but is held to good faith10 and skill as a banker.11

1 See Sec. 113, ante.

2 Bank of Louisville v. Ellery, 34 Barb. 630.

3 Primarily the banking business must be carried on at its place of business. See People v. Oakland Bank, 1 Doug. 282. And see £Sec. 24, 103, ante.

4 Mt Vernon Bank v. Porter, 52 Mo. App. 244. This decision is really upon a statute, but the statute would not add anything.

5 Yerkes v. National Bank, 69 N. Y. 382.

6 Murray v. Bull's Head Bank, 3 Daly, 364

Hsham v. Post, 141 N. Y. 100; Wykoff v. Irvine, 6 Minn. 496.

8 Reynes v. Dumont, 130 U. S. 354

9 Wykoff v. Irvine, 6 Minn. 496.

10 See last case cited.

11 Isham v. Post, 141 N. Y. 100.