Overflight, 50
As the owners of it have not got the money they own, and as the banks have not got it, and as the people who borrowed it have not got it, where is it? Obviously nowhere. It is imagined to exist for the purpose of charging interest upon it.
No doubt there are still many people, if not the majority, who will be frankly incredulous that money vastly exceeding in amount the total national money can be, and is created and destroyed by the moneylender with a stroke of the pen. … those who still pretend to believe that the banks only lend their customers’ unused money. Indeed, to some people it seems sufficient to prove this that a bank’s balance−sheet balances. Whereas, of course, when a bank credit is created, both sides of the balance−sheet are written up to the same extent. It is not merely the old lady of fable who overdrew her account and sent her banker a cheque for the amount. Her misfortune was merely that she was not her own banker. …
If we look ahead, … the purchasing power of money is settled in the long run … by the proportion of his earned income the worker permits to be taken from him by the rentier.
These considerations may serve to show how little is known as to the facts of the existing monetary system, but they are probably sufficient to give a general idea of the order of quantity involved, and, in so far as the evils afflicting society are monetary in origin, to suggest reform. The foregoing brief analysis of the origin of modern money reveals that a complete and unsuspected alteration has come over the very nature of it with the discovery of financial devices for economising the use of currency. It is necessary therefore to regard it as an entirely new phenomenon and to go back to first principles in examining it. Almost by accident, certainly as a byproduct unforeseen when the cheque system originated, the power of issuing and withdrawing currency has passed entirely beyond the control of the nation into the hands of the banker.