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POLITICAL  ECONOMY

However  briskness  of  trade  may  have  been
initiated,  it  is  certainly  true  that  once  it  has
appeared  an  increasing  demand  is  made  upon
banks  for  money.  Business  men  are  anxious
to  get  the  means  of  undertaking  yet  more  of
the  profitable  business  that  is  being  offered
and  increase  their  earnings.  There  is  consequently ­
  a  larger  demand  for  overdrafts  and
a  larger  offer  of  bills  for  discounting  ;  and  it
is  undoubtedly  a  fact  that  when  the  means
of  prosecuting  further  business  are  readily
furnished  avenues  are  opened  for  over-trading.
Moreover  the  rise  in  prices  which  the  augmentation ­
  of  money  naturally  brings  about,
according  to  the  quantity  theory  of  money,
itself  tends  to  stimulate  production.  Banks
are,  therefore,  placed  from  time  to  time  in  a
position  in  which  they  can  either  urge  on  the
business  community  in  a  speculative  career
which  culminates  in  disaster  or  apply  the
curb  and  prevent  it  from  rushing  into
danger  in  its  excitement.  Banks  are  increasingly ­
  realising  how  they  are  placed
in  this  matter  and  recognising  their  obligations. ­
  One  difficulty,  naturally,  is  to  decide
at  what  point  good  trade  which  is  sound
becomes  over-trading  which  is  unsafe  ;  and
there  is  another  difficulty  in  that  banks
may  have  to  persuade  themselves  to  sacri-