At the same time, of course, the trade of the country is necessarily penalized. It is not good for trade that there should be frequent fluctuations in the price of loans. It affects profits, the growth of capital, and prices, and it also affects the employment of labour. If too much has to be paid for bank loans, then it becomes too dear a process to convert fixed wealth into liquid capital, for users of capital may not then be able to employ it remuneratively. And this may be a precursor to trade depression and stagnation. If at such times we could replenish the reserves from the provision of other legal tender, it might obviate it. If money be sent here for investment at the higher rates of interest, it will increase the Bank’s reserve and at the same time increase the supply of money. As the supply of money from the joint stock banks is dependent upon these gold reserves, their gold reserves will be increased. For some of this fresh gold will find its way to the banks. They can then convert more wealth into currency, and thereby stimulate trade. When foreigners invest their money here, they earn their profits in the same way as our banks do. Their profits are a portion of the general wealth of the community. As profits can come only from the production and consumption of wealth, and not from the void, then they are a portion of that wealth. And if profits are a constituent of wealth, even if we call them a residue of wealth, then bank profits must come from the same source, and not from space. Foreign banks, therefore, become possessed of a part of this country’s wealth, for profits are purchasing power, and purchasing power cannot be intangible; it cannot be credit. In the same way, when we invest money in a foreign country--say, Argentina--we receive the interest in the shape of commodities, that is, in the shape of the country’s wealth. They are this country’s profits on that loan: something tangible, something Argentina and her wealth-producers part with, and something they would retain if they did not send it here. Therefore the interest we pay on foreign loans here must also be paid in wealth. And if foreign bankers get their profit in the shape of wealth, so must our bankers get their profits in the same substance. CHAPTER XI THE FIDUCIARY CURRENCY In speaking of the fiduciary currency of the country I will confine myself for the moment to that portion of it represented by Bank of England notes. The war-emergency Treasury note currency I will deal with later on. All countries have a fiduciary paper currency. Some have a convertible currency, others an inconvertible, and others a partially convertible; but the dimensions of this treatise cannot be expanded by a comparison of the systems of different countries. Those who desire to be assisted by comparisons must consult other works.