Now for the explanation: In comparing the size or weight of two masses the whole of each must be contrasted with the whole of the other, and in comparing two actively operating forces all of the factors of each must be considered together, without regard to names. But, strange to say, three-fourths of what is being used and paid for as money, and which really does the work of money, and does nothing else, is denied the right of being called money by some doctrinaires—and also by bankers, when talking to the public. Although between May 1 and October 1, 1903, the volume of metallic and paper money actually increased, this something which had been doing the work of money was contracted $500,000,000 in New York City alone—but as it was not called money its relation to the results was not generally recognized. Deposit banks are little more than clearing-houses; and the laws permit their owners to pay nine-tenths of their debts with money literally made by themselves—out of nothing—which they coolly call “liquid capital,” or “bank credit,” although it is neither capital nor credit. The real nature and far-reaching effects of this modern practice are not clearly understood by one in twenty even of the bankers themselves—and none of them dares discuss it publicly. The most of those that do not fully understand it _feel_ that there is something wrong about it; and those that do understand it know that, if people once begin to study “the system,” they will demand radical changes in it—or its entire abolition. Government reports for 1904 put the volume of metallic and paper money then in existence at $2,829,273,316—or $31.16 per capita; and the Comptroller’s report shows that the banks whose reports he consolidated were earning interest on more than $6,278,000,000 of money that had no existence—or $76.47 per capita. This stuff is what, for a dozen years, I have called “hocus pocus money.” It consists of nothing but, in the language of Professor Sidgwick, rows of figures on bank books; and yet it affects business, prices and values, exactly as that amount of real money would. Invisible, intangible and mythical, it is nevertheless very real—filling the land with prosperity, joy and song today, and disaster, tears and despair tomorrow, it is the most potent economic power ever known. Business men gladly accept it as money. _The courts treat it as money._ And, although, for technical reasons, most political economists do not do so, I insist that, to all intents and purposes, it is money, and should be so recognized. Indeed, until this shall be done, it will be impossible to frame a monetary system that will always work equitably and beneficently.