Perhaps they do not lend at all, neither credit nor money? Perhaps they no more lend than my employer lends when he pays me my weekly cheque for services rendered. We call them lenders, because it would seem absurd to call them converters. Yet it seems obvious that they do quite a large business in conversion, akin to what the Bank of England does when it converts gold into notes. The latter converts one species of wealth into one species of currency; the joint stock banks convert another species of wealth into another species of currency. My employer pays me a cheque for services rendered. I am presumed to have produced some kind of wealth, which is converted into liquid and current capital when I receive the cheque and put it in circulation. When he gives me the cheque he does not give me credit. He pays me for the wealth I have produced and which the community has consumed, and that wealth goes to the common store. If a banker lends me, as it is said, £200 on Consols--to put it in round, simple figures--does he sell me his credit, or do I sell him mine? Or is it, after all, barter? If it be bartering wealth, then it cannot be credit. If he lends me £200 and takes my Consols, he takes my wealth from me. It is no longer in my possession. He has it, and if I leave that £200 on deposit and do not withdraw a single sovereign, he is wealthier to the extent of £200 than he was before. If he be so much wealthier, what has he exchanged with me? What has he sold to me? If he lends me £200 on my credit, plus the Consols, and I borrow £200 from him on his credit, less the Consols, then we seem to exchange credit for credit. If credit be a species of wealth and credit be exchanged for credit, then wealth is exchanged for wealth. But, I repeat, this is not the sort of credit the tradesman understands and lives on, nor is it the man in the street’s conception of credit. Yet it is declared by those who pretend to a deep knowledge of human psychology and temperament, that the stability of banks depends upon the credit they enjoy amongst the members of the community, and that that credit, in its turn, is dependent entirely on the proportion of gold the banks hold to their deposit and current accounts. It is quite possible that this is a delusion. Financiers may have misread the public and may not be completely acquainted with their arithmetical preoccupations. I do not believe that one man in 100,000 deliberately and seriously sits down each evening and works out the proportion of gold held by his particular bank in its last balance sheet.