Credit Money and the Precious Metals, 241 



'drawn against shipments really represent the commodities ; 

 the credits allowed on securities represent commodities in 

 the fixed form, for which the securities stand, such as Brazil- 

 ian railways. The credits allowed against Consols represent 

 the accumulated assets of the nation. And even accom- 

 modation bills, so far as they are in any sense legitimate, 

 may be said to represent potential commodities. Cheques, 

 when not drawn against actual cash deposits, also represent 

 commodities which are monetised, for they are drawn against 

 discounted bills backed by bills-of-lading, which are mere 

 warrants against goods, or they are overdrafts guaranteed 

 by securities representing certain assets. Even in the case of 

 over-drafts against which no securities are actually deposited, 

 the banker, in trusting the solvency of his customer, 

 believes that the credits are utilised for the purchase or 

 holding of commodities. Credits which have not some sub- 

 stantial backing of this kind may be classed with spurious 

 bank notes or false coin. Sir Thomas Farrer's contention, 

 therefore, really is, that instead of bi-metallism (the mone- 

 tisation of two commodities), what I may describe as a kind 

 of poly-metallism (the monetisation of many commodities) 

 actually exists. This monetisation of commodities is 

 effected, so far as the documents are in terms of gold, by 

 the bankers and other gold capitalists, and it is monetisa- 

 tion in a fixed ratio ; for when a bill is drawn for ;^ 1,000 

 against a given shipment of goods, and circulates as credit 

 money, the meaning is that those goods have, for the time 

 being, been monetised in a given ratio to one thousand 

 sovereigns. A bank is a kind of commodity mint ; and 

 just as notes issued against an equivalent reserve of gold 

 are gold-notes circulating instead of the gold, so a bill, 

 or other credit form, is a circulating commodity note. 



But this circulation is of a very limited kind. The 

 credit money, for instance, does not, generally speaking, 

 diffuse itself amongst the consumers of commodities, and it 



