MONEY 
129 
device which could have no effect upon the 
quantity of circulating money one way or the 
other. On the face of it, the system simply 
enables a person who has deposited his 
money in a bank to give authority to 
somebody else, in the form of an order, to 
draw that money out instead of his drawing 
it out himself. But on peering more curiously 
into the matter we shall detect that, once this 
method of making payments has appeared, 
it becomes possible to extend enormously the 
quantity of media of exchange in use. Cheques 
take the place of cash instead of serving merely 
as a means of getting cash. They effect 
millions of pounds’ worth of exchanging with 
out the use of a single sovereign. 
We shall have to enquire how the process 
whereby the quantity of the media of exchange 
is magnified through the agency of cheque 
payments is actually controlled in a modern 
business economy, and what its effect is on 
the state of trade, but first it will be desirable 
to remind ourselves of the manner in which the 
limited supplies of gold in the banks automatic 
ally stop the expansion of credit money after 
it has reached a certain figure. Bankers from 
their experience and from reading the signs 
of the market know approximately what 
demands to expect for gold for exporta-