Let me illustrate this in a simple way. If Mr. Farmer should come to me to borrow a thousand dollars for three months, and I should make him the loan, as we say, I, as a banker, would buy his note, due in three months. That is just what happens every time a bank makes a loan; it simply buys the note. Now, in all probability I would not give Mr. Farmer any actual money, but would simply give him credit for one thousand dollars on the books of the bank, so that he could draw his check against it. In other words, I would owe him one thousand dollars. I have created a debt to him of one thousand dollars; in short, I have traded debts with him. He has given me his note, which is a debt for one thousand dollars due in three months, and I have given him credit on the books of the bank, a debt due to him on demand. The transaction does not differ in the slightest degree from the trade of horses for cattle. Let me demonstrate this. Suppose that Mr. Farmer came to me and offered me two of his Jersey cows for my horse and buggy, because he does not want the cows, but does want the horse and buggy to do a lot of running around. I want the cows to milk, and so make the exchange with him. He gets something that meets his pressing needs in the horse and buggy, and I get something from which I receive an income, the cows from which I get milk. This corresponds to the interest on his note, and by the way, the cream would be my profit. MR. LABORINGMAN: That's it; you bankers are always milking the public, and the interest you get is all cream; all profit. MR. BANKER: Oh, no! it is not as bad as that. Don't make such a mistake. The average cost to the bankers of the country, outside of any losses, is about 4 per cent upon their deposits for interest paid on deposits, rent for building, clerk hire and other general expenses. So you see that it is not all profit by any means. But let me get right back to what I was saying. The banker is nothing but a trader who keeps an open shop for the purpose of trading his debts for the debts of his depositors; or to put it in another way, for the purpose of exchanging his credit for actual money which is deposited with him, or for checks and drafts that are deposited with him, or for promissory notes which he buys when he loans money to his customers, and gives them credit on his books for the amount of the loans. All these different things, money, checks, drafts and promissory notes are bought by the banker with his credit, and the greater the amount he buys with his credit the greater will be his debt. But, you will probably say these are his deposits. Very true, but his deposits are his debts. Don't forget that. MR. LAWYER: Mr. Banker, you have accurately described the situation, just as it exists today, and that, of course, is what we are interested in; but it seems to me as though it would be a great help to us to follow the development of banking, as we have it now.