REMARKS ON SPECIE RESERVES AND BANK DEPOSITS. 383 
It appears from this explanation, that there is no good reason why persons of un- 
doubted solvency should find it any more difficult to pay their notes at one time than 
at another. The fund which affords the means of paying them — i. e. the total amount 
of the deposits — remains without material fluctuation throughout all conditions of the 
" money market; or rather, as we have seen, it is a little increased in a time of pressure. 
And the aggregate of this fund is not diminished by making payments out of it to any 
amount whatever; for though all commercial debts are paid out of it, they are by the 
same act paid into it, the operation of payment only shifting the names of the persons 
to whose credit a given portion of the fund is entered. But so long as the fund is 
owned and held (say) by a thousand different depositors, any one owner fears to lend 
during a crisis, lest the loan should diminish his share of the deposits, though it would 
thereby certainly increase the share of some other owner. But throw all the deposits 
into one fund, intrusted to the management of one person or one institution, and, while 
each depositor may still retain the entire use and direction of his own deposits, the man- 
ager of the whole may make loans to any extent without subtracting a dollar from the 
aggregate. To obtain a loan and therewith to pay a debt, is not to take away any- 
thing from the total amount of the deposits, but only to shift the distribution of them 
on the books where they are entered to the credit of different persons. 
It is not proposed to withdraw any of the deposits from the individual banks in 
which they are now lodged. All that would be necessary is, that each depositor, still 
dealing with his accustomed bank, and lodging his funds there, should enter them, not 
to his own credit, but to the credit of the Central Association, or Great Bank, which 
would have the general management of the aggregate deposits. The individual de- 
positor would then draw his check, whenever he had occasion, not upon his own bank, 
but upon this Great Bank, which would honor the check simply by transferring the 
amount to the credit of the person in whose favor it was drawn, or by certifying it as 
“ good,” in which case it would be honored by any bank to which it might be presented. 
Checks might be drawn, it is true, in order to obtain specie to send to foreign countries 
or to other cities. But the occasions for making such remittances in specie would not 
be more frequent, or to any greater amount, than under the present system; and the 
books of the Great Bank, on which each individual depositor would appear as its cred- 
itor, and each individual bank in which the deposits are actually lodged as its debtor, 
would render it easy for any bank to be credited for the amount of any check which it 
should be required to pay in specie. But vastly the larger portion and amount of the 
checks needing to be honored only by transferring on the books of the Great Bank a 
given sum from the credit of one depositor to that of another, much handling of money 
