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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