The Stratford Evening Post With which is "THE EGMONT SETTLER." Currency and Credit

Stratford Evening Post, Volume I, Issue 291, 18 November 1931, Page 4

The Stratford Evening Post With which is "THE EGMONT SETTLER." Currency and Credit

> ROF ESSO* EDWIN CANNAN .j£*fi£?,X& -Modem Currency and theKeguiato h in was written before the recent crt , have bee n its value on that PM& * £•£* tUe greatest obstacle more than 3«t«fled- Wb* P .„ h Ration to the adoption by the nations exagg erated belief m gold a the gold standard en rency is the e*a, e as s «igrf 1 P h Sort." buys Professor Cannan as a to* tlje meicaatiu pegpect as The T' ' rea e Silver has lost caste, and is the precious mu*» »' »* • , retains its hold upo n tne SSi Vv.pt. i '»*» metal, now little more than a . now little more than a- uw "' _' Jn ite ()f a ll that economic imaginations of Western _ > m of Sout h isls have said, gold is still ) voi • i wMch th(l rxpnrt ftt Africa is the only .consider abbi oiu 1 rf people> wh() ff old is regarded with tavoui b> t _» J E i sew here it is algold is regarded with favour D i .« - lsewhl>re it is althink anything at.al aboiit Hueh ec* ■ . r of h most universally trne that the Qf their people rejoice when hey hcai oi , fl hemißG own country properties, they recognise that gold is a metal willin xy which and expect that it will when J^.citizens or will delight the eyes of themselves and he fcUow improve their mastication S muc ot * g poses they regard as little better than m istea. is to hear that gold lias been 'seem-ed as the ti anc call it, by the central bank, and » abort to £ e < d ban k>s deepest dumgeon to be ***£*£ at * ZLonsiJjZZ 'has money in fhe bade' to that .menu ; it is inevitable that most people should think of he bank* a Holding an amount of money equal to the aggregate credit balances, especially as the amount happens to be usually "d the 'deposits' in the banks, that word being a t«« we 1 of things which we have carefully put the full expectation of finding them there when WO want them ••snch as umbrellas'and bags in cloak-rooms and stores undo, a aha in Arctic'regions. Hence the popular talk conn enanccd I regret to sav, by some pseudo-economists, of 'millions oi monej lying idle in the banks.' A moment's examination oi any hank s balance sheet is sufficient to show that this conception of money lying in the banks is palpably absurd. It appears evident at once that the banks no more have all the money which they nav< received from their credit-balance customers and not yet repaic, than the British Government has all the £7,000,000.000 winch it has received from those who have lent money to it, and who (or whose successors in title) have not yet been repaid. Hie British Government has paid away the money as it received it, putting it into various undertakings, such as the telephone service and various works and operations necessary, or wrongly supposed to be necessary, for the defence of the people from their enemies; with the exception of a small amount of currency wh'iah they keep ready to meet any likely demands on the part of their customers, the banks have likewise paid away money as they received it, buying land and buildings for the conduct of their business with some of it, and investing or lending all the rest. Banks are thus not full of money as cloak-rooms are of bags and umbrellas, but institutions which facilitate lending and investment. They—that is, their owners and the large and important personnel employed—render services to both classes of customers of the banks—the credit-balance customers and the debit-balance customers—who pay for these services, to a small extent by various charges for particular services, and chiefly by means of the difference between the interest received and the interest paid by the banks," ...