THE FARMER AN'D THE BANKER. 137 



for the farmer. lie is put out of tlie misery of struggling to 

 accomplish the impossible. 



Bank checks and drafts* form the main part of the money 

 of the world. While they are not money, their use enables 

 society to dispense with most of the money which would 

 otherwise be required. They are used instead of money 

 because they are more convenient. In the large cities fully 

 ninety-five per cent of the payments are made by means of 

 these instruments. In the smaller towns the ratio is less, and 

 among farmers actual money is probably used more than 

 checks. The existing stock of money at its present valuation 

 would go but little way towards transacting the business of 

 the world, and if used would be very inconvenient and 

 expensive. In times of panic the greatest effect is the stop- 

 page of the flow of bank checks and drafts. It is, of course, 

 not true that modern society could not exist without banks, 

 but it could not do business in the way business is done now, 

 nor so conveniently and cheaply. This subject, however, has 

 been sufficiently discussed elsewhere in this volume.f 



There is one function of the bank yet to be considered — 

 that of issuing paper money. In all new countries which 

 can not attract gold and silver because they have little to sell, 

 there is a demand for something which will serve as currency. 

 To supply this demand there are three courses open, all of 

 which have been eni[)loyed in the United States; the first 

 is the acceptance of some commodity as money, wampum, 

 cattle, or tobacco; the second, the emission of promises to pay 

 money by the government; the third, the emission of promises 

 to pay money by banks, duly authorized thereto. 



This general subject has been fully treated elsewhere,t 

 the discussion of the latter alternative, issues of bank-notes, 

 being reserved as more appropriate in this place. During the 

 period between the close of the Revolutionar}^ War and the 



*A "draft may be roughly described as any order for money other than 

 one drawn by an individual upon a bank in which he has a deposit. 



I Book sixth, chapter IV, 



