Ro 
MONEY 
bank-notes in the world at large was very consider- 
able at the commencement of the twentieth century. 
Its importance in keeping down the value of gold 
can be appreciated if we try to estimate how much 
more gold would have been demanded if the United 
States, France, and a dozen other of the principal 
countries using large quantities of bank-notes had 
suppressed them. 
But by that time another economy had been 
introduced which to a great extent took away the 
need for bank-notes as a substitute for gold. This 
was the cheque system, under which, instead of 
each of us encumbering ourselves with a stock 
of currency in the form of coin or bank-notes, 
we “put our money in the bank,” and content 
ourselves with a small pocketful of currency reple- 
nished from time to time at the bank, knowing that 
we can make all large payments more conveniently 
by ordering the bank on a piece of paper to transfer 
some of what it owes us to the person whom we 
wish to pay. The device does away with the necessity 
of an immense aggregate quantity of currency, since 
the banks do not need, in order to carry out their 
part in the arrangement, to hold nearly as much 
as their customers would have been obliged to do 
in the absence of the system. And the banks’ liberty 
to hold as little as they find necessary has been less 
restricted by legislatures than their corr:sponding 
liberty in regard to bank-notes. The economy of 
gold and consequent tendency to cheapen gold and 
raise prices is obvious, and certainly very great. 
We have, however, no means of estimating it. 
We may know that we keep an average of f10 a 
head in currency now, when we have banks, but 
we cannot possibly form the wildest guess how much 
we should keep if there were no banks. Some of us 
would probably never have been born: the whole