io W. G. Langzvorthy Taylor 



upon their value as subject to the same laws as those to which a 

 commodity is subject. Among- the inflationists, the fallacy per- 

 sists in a crude form, "that money is what money does," that is 

 to say, if the circulating function is established, the standard of 

 value function will take care of itself. And the further fallacy 

 persists that a bank deposit is practically money, because it is 

 supposed to represent money deposited in a bank, whereas the 

 literal deposit of money in a bank is but a survival of an ancient 

 and superseded business, out of which banking indeed sprung. 

 However, so far as application today is concerned, the notion is 

 as fallacious as is the other that a laboring man is a slave because, 

 in ancient times, labor was done by slaves, and because it may be 

 historically true that the laboring man is evolved from the slave. 

 It is along this line of popular thought that everyday language 

 calls a bank loan a loan of "money," and assimilates it to the hir- 

 ing of a livery team. The banker is popularly supposed to be a 

 dealer who takes people's money on deposit, that is, for safe- 

 keeping, and loans their money out again (lay great stress upon 

 "again") ; whereas observation shows that there is no more than 

 the slightest grain of truth in that idea. One would think that 

 universally the introduction of the business of the safe deposit 

 company, the facilities of which are often used for deposit of 

 specie, would cause people to inquire as to the difference between 

 this revived old deposit business and the modern guaranty busi- 

 ness ;• but when a form of speech is once rooted in the language 

 it is almost impossible to eradicate the fallacies that 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 misapprehensions here again alluded to 

 should prevail in the face of the fact that almost everybody deals 

 with a bank nowadays. He knows that the largest part of his 

 deposits come from his borrowings in his business. Why should 

 he not draw the natural conclusion that the orders which he de- 

 posits come also from loans made by the persons who have made 

 payments to him? A simple illustration of this sort shows the 

 crying need for economic, and especially for financial, education. 

 Although banking business has been developed in practically its 



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