Ought the position to be made clearer to the public, to the unsophisticated man in the street, by segregating the deposits and showing their component elements? What is the objection? Will some great bank start reform in this direction if it be earnestly and sincerely desired to show the public exactly what the position of affairs is; if it be sincerely desired to surround the groping man in the street with a bright light? Why not extend reform here after commencing with the segregation of a bank’s legal tender reserve? I can imagine, however, that the refusal would be strenuous. Are the pure deposits credit? If they are not credit, entirely distinct from the loan deposits, but consist of money in some form or other lodged with the banks, they cannot form a part of what is described as the credit superstructure of the banks. The so-called credit superstructure must be composed, then, of the loan deposits which are at one and the same time loans by the bank, and loans to the bank. If they are other people’s liabilities and at the same time the bank’s liabilities, whose credit are they? The borrower trusts the bank and the bank trusts the borrower; whose credit comes first? Who is the first creator of the credit? It is as difficult to answer as the question which came into the world first, the egg or the chicken? No matter how we answer the conundrum, it seems to me indisputable that what we gaze upon is a superstructure of wealth. And it is indisputable that the banks furnish machinery vital to the progress of humanity. And it seems to me vital to the interests of national well-being that every resource should be ready to prevent the collapse of any sound banking establishment. CHAPTER VII WHAT IS THE LOANABLE FUND? The loanable fund in Lombard Street is said to be the totality of the deposits in the possession of the joint stock and other banks, plus the deposits in the Bank of England. We will, however, for the moment leave out the Bank of England as being immaterial in the present stage of our argument. Let us confine ourselves to the deposits in the joint stock banks, and let us assume that these total £800,000,000. What is called the loanable fund, therefore, is a mass of money aggregating £800,000,000. If a merchant or any other person desires to get a loan he gets a portion of this huge sum, and the commerce and industries of the country are financed thereout. It has been likened by the imaginative to a vast reservoir of money, into which money is constantly flowing from many channels, and out of which it flows into a great number of channels. In fact, these channels form a mighty network, like the veins of the human body, and as the steady flow of blood to all parts of the body is essential to health and life, so the steady flow of money throughout the economic organism is essential to its health and life.