Durch Abessinien und Erythräa

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Monograph

Identifikator:: 1835107648

URN:: urn:nbn:de:zbw-retromon-222288

Document type:: Monograph

Author:: Norden, Hermann http://d-nb.info/gnd/1141303051

Title:: Durch Abessinien und Erythräa

Place of publication:: Berlin

Publisher:: Scherl

Year of publication:: [ca. 1930]

Scope:: 202 S.; Ill., 1 Kt.

Digitisation:: 2022

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Das Stromgebiet des Blauen Nils

Collection:: Economics Books

THE FUNCTIONS OF BANKING 18 This promising approach to the problem of ascertaining the fundamental part that banks play in our economic organization received but little attention for a time. We meet with it again in Thomas Cooper’s Lectures on the Elements of Political Economy (1826). The supply of gold and silver, Cooper explained, is inad- equate for effecting all the payments of modern commerce. This leads to the use of promises to pay, which is further commended by the inconvenience of making large payments in coin. But it is only the notes of a well-known promisor that can circulate widely. It is the province of banks to supply such acceptable notes by exchanging their own credit for that of their customers.! It was upon the furnishing of a widely accepted credit that Cooper laid emphasis. The other aspect of the matter — de- termining who shall receive credit — was stressed by a writer in the North American Review of the following year. Banks remedy the defect that individuals, in a position to extend credit to those who need it, are unable to ascertain who is worthy of their trust. “They assume the responsibility of the debtor; they relieve the creditor of his anxiety and doubt;? they enable him to divide into small pieces, and transfer some of his risk to those with whom he deals”? John Rae made the same point. A business man may be unable to convince the many with whom he wishes to deal that he is capable of discharging the transactions in question, and even if he could do so, the credit he would receive would frequently fail to satisfy his needs. He is far more likely to be able to persuade one person, his banker, that his stocks and estab- lishment afford ample security for the accommodation he seeks. The banker lends him money when he wants to buy, and receives money from him when he has effected sales. The banker serves, then, as “the general lender, and receiver of the society,” a “dealer in credits.’’ 4 1 Cooper, Lectures on the Elements of Political Economy (1826), pp. 37, 38. 2 In discounting, “the bank insures the parties to the note discounted; and the community, which is the loser if the bank fails, virtually insures the bank.” J. C. Calhoun, in a speech in the Senate, October 3, 1837. ' Jonathan Porter, “ Review of Cardozo’s Notes on Political Economy,” North American Review (1827), xxiv, 183. 4 Rae, New Principles of Political Economy (1834). (Mixter’s Reprint, p. 208, under title. ““ The Sociological Theorv of Capital ”’

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