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 be more easily photographed than one from surface where only a film of ink is spread upon the top of the raised lines. But surface-printing being much less sharp and distinct than plate-printing, imperfect copies of notes for which that process is used are the more likely to escape detection. The plates upon which the early notes were engraved being of copper quickly wore out and had to be constantly replaced. The result was great difference in the appearance of the notes, those printed from new plates being sharp and clear, while others, printed from old plates, were pale and blurred. These differences were a great assistance to the forger, as the public, being accustomed to variations of appearance between different genuine notes, were less apt to remark the difference between these and counterfeits.

In the early part of the 19th century, Jacob Perkins (1766–1849) introduced into England from America what is known as the transfer-process, in which the original engraving on steel is hardened and an impression taken from it on a soft steel cylinder, which in its turn is hardened and pressed into a soft printing-plate. By this means as many absolutely identical plates can be produced as may be required, and being hardened they will yield a very large number of prints without any appreciable deterioration. Another method of securing uniformity is the multiplication of plates by electro-deposition, the surface of the copper-electrotype plates being protected by the deposit of a film of steel which effectually prevents the wearing of the copper and can be renewed at will.

The water-mark of the paper, on which formerly reliance was placed almost exclusively, puts a difficulty in the way of the counterfeiter, but experience has shown that in ordinary circumstances it does not in itself afford adequate protection. The means by which it can be imitated are well known, and, since a distinct water-mark is incompatible with strong paper, the life of a water-marked note is much shorter than that of one printed upon plain paper. The best bank-note paper is made from pure linen rags and was formerly made by hand. Machine-made paper is however now largely used, as it possesses all the strength of hand-made and is much more uniform in thickness and texture.

In documents which pass current as money it is obviously the duty of the bank or government issuing them to take all reasonable means to prevent the public from being defrauded by the substitution of counterfeits; and a bank whose circulation depends upon the confidence of the public must do so in its own interests to insure the acceptance of its notes. This principle is now recognized by all issuing institutions, but in practice there is room for improvement in the issues of many important establishments, partly because of the disinclination of the directors of a bank to change the form of an issue to which the public is accustomed, partly because of the difficulty of deciding what is really a secure note, and in certain cases because, owing to exceptional circumstances, an issue may be practically immune from forgery although the notes themselves present little or no difficulty in imitation. The features essential to the security of an issue are (1) absolute identity in appearance of all notes of the issue; (2) adequate protection by properly-selected colours against photographic reproduction; and (3) high-class engraving comprising geometric lathe work and well-executed vignettes. In addition it is important that the design of the note should be striking and pleasing to the eye, and the inscription legible.

The notes of the Bank of England are printed in the bank from surface-plates in black without colour or special protection except the water-mark in the paper. They are never reissued after being once returned to the bank, and their average life is very short, about six weeks, so that a dirty or worn Bank of England note is practically never seen. This arrangement, coupled with the difficulty of negotiating forged notes in England, the lowest denomination being £5, accounts for the comparative immunity from forgery of the bank’s issues.

 BANK RATE, a term used in financial circles to designate the rate of discount charged in the chief monetary centres by the state or leading bank, as opposed to the open-market rate. (See : Money market.)

 BANKRUPTCY (from Lat. bancus or Fr. banque, table or counter, and Lat. ruptus, broken), the status of a debtor who has been declared by judicial process to be unable to pay his debts. Although the terms “bankruptcy” and “insolvency” are sometimes used indiscriminately, they have in legal and commercial usage distinct significations. When a person’s financial liabilities are greater than his means of meeting them, he is said to be “insolvent”; but he may nevertheless be able to carry on his business affairs by means of credit, paying old debts by incurring new ones, and he may even, if fortunate, regain a position of solvency without his creditors ever being aware of his true condition. And even when his insolvency becomes public and default occurs, a debtor may still avert bankruptcy if he is able to effect a voluntary arrangement with his creditors. A debtor may thus be insolvent without becoming bankrupt, but he cannot be a bankrupt without being insolvent, for bankruptcy is a legal declaration of his insolvency and operates as a statutory system for the administration of his property, which is thereby taken out of his personal control.

In primitive communities bankruptcy systems were unknown. Individual creditors were left to pursue their remedies by such means as the law or practice of the community might sanction, and these were generally of a very drastic character. Under the Roman law of the Twelve Tables, the creditors might, as a last resort, cut the debtor’s body into pieces, each of them taking his proportionate share; and although Blackstone in quoting this law appears to cast some doubt upon its too literal interpretation, there can be no doubt that the power of selling the debtor and his family into slavery was one which was habitually exercised in Greece, Rome, and generally among the nations of antiquity. Even among the Jews, whose legislation was of a comparatively humane character, this practice is illustrated by the Old Testament story of the woman who sought the help of Elisha, saying, “Thy servant my husband is dead ... and the creditor is come to take unto him my two children to be bondmen.” The savage severity of these earlier laws was, however, found to be inconsistent with the development of more humane ideas and the growth of popular rights; and tended, as in the case of Greece and Rome, to create serious disturbance in political relations between the patricians, who generally composed the wealthier or creditor class, and the plebeians, in whose ranks the majority of debtors were to be found. Later legislation consequently substituted imprisonment in a public prison for the right of selling the person of the debtor. Under the feudal systems of Europe the state generally insisted on its subjects being left free for military service, and debts could not therefore be enforced against the person of the debtor; but as trade began to develop it was found necessary to provide some means of bringing personal pressure to bear upon debtors for the purpose of compelling them to meet their obligations, and under the practice of the English courts of law the right of a creditor to enforce his claims by the imprisonment of his debtor was gradually evolved (although no express legal enactment to that effect appears at any time to have existed), and this practice continued until comparatively recent times.

Without some system of enforcing payment of debts it would have been impossible for the commerce of the world to have attained its present proportions; for modern commerce is necessarily founded largely on credit, and credit could not have existed without the power of enforcing the fulfilment of financial contracts. On the other hand remedies against a debtor’s person, and still more against the persons of his family, are not only inconsistent with the growth of opinion among civilized communities, but are in themselves worse than futile, inasmuch as they strike at the root of all personal effort on the part of a debtor to retrieve his position and render a return to solvency impossible. Hence the necessity of devising some system which is just to creditors while not unduly harsh upon debtors, which discriminates between involuntary inability to meet obligations and wilful