Money

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Monograph

Identifikator:: 1819853969

URN:: urn:nbn:de:zbw-retromon-207464

Document type:: Monograph

Author:: Cannan, Edwin http://d-nb.info/gnd/118666916

Title:: Money

Edition:: 6. ed.

Place of publication:: [London]

Publisher:: King

Year of publication:: 1929

Scope:: XII, 120 Seiten

Digitisation:: 2022

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Part II. Further elucidations

Collection:: Economics Books

> MONEY This is obvious when looked at from the side of those customers from whom the banks derive all their power to lend except what is derived from their own capital. The opposite view arises entirely from a curious belief that the power of the banks’ creditors (i.e. the depositors) to deposit is derived from the sums lent to the borrowers instead of the banks’ power to lend being derived from the depositors. Banks are thus supposed to make something out of nothing, and the only wonder is that they use their power with such extraordinary moderation. But whatever some bank chairmen and some monetary theorists may think, every bank-manager knows that the customers who provide the funds which the bank lends and invests are substantial people who have property of their own which they find convenient to entrust to the bank. They could, if they had time and inclination, lend direct to the same people to whom the bank lends, but they find it better to entrust the business to an intermediary, the bank, which is expert at it and, by clubbing a number of them together as its customers, is able to let each of them have the money at any time when they happen to want it. The bank will pay them a little interest, or if not, will render many services gratuitously, including the service of keeping the sums deposited more safely than they could be kept in cash in the house. A good proof of the nature of what underlies bank deposits is to be found in the death-duty returns. If every one with any property died at the same moment these returns would give the aggregate property at that moment. The amounts owed by individuals who had borrowed from banks would not be set against and cancel the ‘“ cash at bank ” in the returns of the property of individuals who had lent to (deposited with) the banks: death-duties are

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