BANKS AND CREDIT.
Can "Croesus" explain this statement of the Rt. Hon. R. McKenna, ex-Chancellor of the Exchequer, England, and chairman' of the Midland Bank, England, January 29, 1020? "When a bank makes a loan to a customer, or allows him an overdraft, in the ordinary course the loan "will be drawn upon, or the overdraft will be made, by a cheque drawn, by the customer upon the bank, and paid into " someone's credit at the same or another bank; The drawer of the cheque will not ■ have reduced any deposit already in existence,, because we are supposing a case in which he has been given a loan or allowed an overdraft. The receiver of the cheque, however, when, he ■ pays it into his own account, will be credited with its value, and thereby a new deposit will be created." Advances, therefore, "can" and ■-'■■ "do" create deposits, "Croesus," so where now lies the ignorance? Surely not at your own door? ~ INTERESTED. S
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Bibliographic details
Auckland Star, Volume LXIV, Issue 211, 7 September 1933, Page 6
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162BANKS AND CREDIT. Auckland Star, Volume LXIV, Issue 211, 7 September 1933, Page 6
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