Financial Legislation and its Limitations. 



1 1 



great stress upon "again"); whereas observation shows that 

 there is no more than the sHgh'test grain of truth in that idea. 

 One would think that the introduction of the business of the 

 safe deposit company, the facilities of which are often taken 

 advantage of for safe-keeping of specie, would cause inquiry as 

 to the difference between this revived old deposit business and the 

 modern guaranty business. But when a form of speech is once 

 rooted in the language, it is almost impossible to eradicate the 

 fallacies that may cluster about it. A large part of the work of 

 students in the political sciences consists in showing that new 

 meanings attach to old terms. It is most curious that the mis- 

 apprehensions here alluded to prevail in the face of the modern 

 fact that almost everybody deals with a bank. He knows that 

 part of his deposits come from his borrowings in his business. 

 Why should he not draw the natural inference that the checks 

 of others which he deposits come also from loans obtained previ- 

 ously by them? There is crying need for economic, and espe- 

 cially for financial, education. Although banking business has 

 been developed, in practically its present form, for two centuries, 

 the popular theory is still that of the money changer on the 

 Rialto; and yet the economist is perpetually met with the ques- 

 tion whether there is any practical application of economic 

 theory ! 



§io. While the banker himself has accepted some of the false 

 conclusions of nominalistic reasoning, he has rejected others, and 

 is gradually emancipating himself from the rest. Under the 

 misdirection of arbitrary legislation, he opens his profits-and- 

 loss account on notes separately from that on deposits ; he looks 

 upon his notes as issued, not for loans, but for bonds, in the 

 United States, in the face of the obvious fact that he buys his 

 bonds with his capital; and on the Continent, where the deposit 

 business is little developed, he looks upon deposits as a special 

 warehousing business, although he takes the right view there of 

 his notes; and he is only now, after years of false conservatism 

 and confused timidity, receiving his education on the similarity 



France, no. Also by A. Lefranc, La liberie du commerce et les etablisse- 

 ments de credit, p. 78. 



125 



Legislative 

 blunders have 

 miseducated 

 the banker 

 himself. 



