MR. BANKER: Certainly not. They come under an entirely different head, and I hope we shall spend an evening considering them very soon. Checks and drafts never pass from person to person and from hand to hand and are not of general acceptance. Herein lies the mark of distinction. Checks and drafts do not pass from person to person and from hand to hand and are always of special acceptance, that is, they are considered before they pass. They are taken according to the strength of the makers, acceptors and endorsers and usually pass only by endorsement. We must make no such mistake because it will lead to a confusion of ideas. MR. MERCHANT: Mr. Banker, you have just told us of what our currency consisted. Gold coin, gold certificates, token coins, silver certificates, United States Notes and our bond-secured Bank Notes. Taken altogether I presume you would call that our currency system. Do you call it a good system? MR. BANKER: It is our currency system, but it is without doubt the worst currency system in the world, if you include only respectable commercial nations. MR. MERCHANT: Well, Mr. Banker, what is wrong with it? MR. BANKER: To tell you what is wrong with our currency system, I would first have to tell you what a right kind of currency system is. And I will proceed to do so in a word. A right kind of currency system consists of three forms of currency only. _First_: Gold coin, or the gold certificate. _Second_: Token, or subsidiary coin. _Third_: A credit bank note or bank credit currency. All these forms of currency are absolutely essential to a right currency system, as I shall proceed to demonstrate. _First_: Gold coin, or its substitute, the gold certificate, is the very foundation of a right currency system, because there must always be present, or immediately available, a sufficient amount of gold to prove, protect and redeem, if necessary, all other forms of currency. _Second_: Subsidiary coins are absolutely essential as a matter of convenience to carry on the small trade of the country. _Third_: A credit bank note which will always spring into being, precisely as a check does, to perform some special transaction, is the most efficient and most economic form of currency in the world, because it always just equals the demand for currency, and costs no more than a deposit account, subject to check. MR. MANUFACTURER: Just what do you mean when you say that a credit bank note currency will cost no more than a deposit account subject to check? MR. BANKER: I mean just this, that if you had a deposit at a bank of $1,000, and the bank upon receiving your check for $1,000 could convert that book account, or book debt, into a note account, or note debt, by giving you its bank notes for $1,000, in exchange for your check, the bank note currency would cost only the interest on the reserve carried against the notes, which would be identical in amount with the reserve carried against the deposit.