BANKS AND PRICES 
83 
payable on “cash at bank.” They would be set 
against and cancel the value of property held by the 
debtors. Thus if John Smith had £300 cash at bank 
and James Brown had borrowed £300 from the bank 
and bought sugar whicii has now become worth say 
£310, John Smith will be assessed for death-duty on 
£300 and James Brown on £10. The perfectly real 
thing underlying the figures in the bank books is the 
sugar, and though that was in the possession of 
Brown, this was only because Smith, through the 
bank, let Brown have the use of some of his * money,"’ 
“capital” or ‘ propertv,” whichever phrase the 
reader prefers to use. 
The fact that the banks are employed as inter- 
mediaries makes no difference to the substance of 
the matter. If all the individual mortgagees in the 
country called in the mortgages after due notice and, 
as the money came in, deposited it in banks which 
lent it out again on the same properties, the aggregate 
of bank deposits would be greatly raised, but does any 
one suppose that the “ money ” in the country would 
be increased and commodity prices raised ? If all 
the Smiths had lent their three hundreds direct to 
Brown, bank deposits would have been less, but 
commodity prices would not have been less. 
“ This is all very fine,” some reader will say, but 
surely it is true that banks control prices, since we 
know that putting up the bank rate checks rising 
prices.” Such a reader will probably suppose (with 
many authorities who ought to know better) that 
the high bank rate acts by reducing the ‘“bank- 
money ** which th» suppose deposits to consist of. 
Certainly it ¢ _ (reduce borrowing from the 
banks, but i. .  t»rranied hy the offer of higher 
inducements “sli TS tu J°posit or not remove 
their deposits. . .ae vbject of a rise of bank-rate 
were to reduce "sits, 't would be accompanied by