Gradually

the goldsmiths learned that all the people who had so deposited money did not call for it at once and they began to lend out the surplus on their own authority.. They found also that if a man wanted to discharge a-debt he found it more convenient to give his creditor an order for the money on deposit than to come in person and carry away the gold, imposing upon the creditor the nece ity of returning the gold for deposit in his name. | Thus, the system of a transfer of credits by means of checks grew up. It was not only safer, but more convenient. In making loans, likewise, the goldsmith, now become a banker, A learned merely to put the loan on his books as a credit to the borrower, against which the latter could draw his order or check precisely as if he had deposited the actual money; or the goldsmith gave his own note or promise to pay to the borrower. The latter pa ed it on and it became a circulating medium wherever the credit of the goldsmith was good.