It is indisputable that money or capital, however we designate the element, is vital to the well-being of the economic organism of the State. Without this provision the organism would in time decay and perish. Therefore some perennial source of this life-giving and life-preserving element should be provided by the Government or some other organization if the nation is to thrive and progress. As the Government has not hitherto provided that source, and as the banks alone provide it, let us examine the peculiar character and essence of that element. We have seen that this so-called loanable fund, or reservoir of capital, consists of money hoarded with the banks by the public and loans by the banks to other members of the public. These deposits are, in fact, representative for the most part of fixed capital. It is the habit to call them mere book entries, intangible and invisible, and that the only sign of their existence are the figures written in the books of a bank. I have endeavoured to show, however, that so far from being intangible, they are tangible, because they are the composite wealth of the community in possession, not of the community, but of the banks. It follows, therefore, that the loanable fund of the country does not consist of an intangible something called credit, book liabilities, but of a certain portion of the wealth of the country. Now this must necessarily be so. Wealth is the source of wealth and the fruit of wealth. If you use wealth you produce wealth. We call the product wealth, or capital, the terms being interchangeable. Capital is wealth, therefore wealth must be capital, and if the banks possess wealth they possess capital. Wealth or capital is valued in the terms of money. We know of no other terms than money for valuation purposes. If we say a pound of cheese is worth a pound of tobacco, we mean nothing unless we make simultaneously a calculation by the common standard of value. The cheese is worth sixpence, we say, or one-fortieth of a sovereign, and the tobacco is worth sixpence. If I borrow sixpence from the cheese-monger and give him my tobacco I create a loanable fund, for I can lend the sixpence to some one else for half a pound of tea as security, and the third person can lend it to some one else, and so on _ad infinitum_ till the sixpence drops down a deep well and is lost. Though the sixpence be destroyed the wealth it has created in the course of its existence is not destroyed, for we assume that it has been used profitably and fructifyingly in the hands of successive borrowers.