Page 3269 - Week 11 - Thursday, 13 September 1990
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When money is lent by a bank it passes into the hands of the person who borrows it without anybody having less. Whenever a bank lends money, there is therefore an increase in the total amount of money available.
The Encyclopaedia Britannica, the 14th edition, stated in the section on banking and credit:
Banks create credit. It is a mistake to suppose that bank credit is created to any extent by the payment of money into banks.
Where are the smiles, gentlemen? It continues:
A loan made by a bank is a clear addition to the amount of money in the community.
Professor Soddy, London, states in his book Wealth:
The cheque system, by dispensing with tangible tokens for money, enables the banker to vary the quantity at will. In fact, it is now never the same for two instances at a time. His loans are not loans as between ordinary people in which one gives up what the other gets; he creates the money he lends and destroys it when it is repaid. What he really does is to empower the impecunious borrowers to buy, extracting security from them in the event of their defaults.
And so with it go our homes, our land and our farms. Thomas Jefferson, the President of the United States, said:
If the American people ever allow private banks to control the issuance of their currency first by inflation and then by deflation, the corporation that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered.
Mayer Rothschild, father of the House of Rothschild which founded the great chain of banking houses, said:
Permit me to issue the money of a nation and I care not who makes the laws.
Of course, neither the Alliance nor the Labor Party. The High Court of Australia in the case of City of Melbourne v. The Commonwealth, 1974 CLR 81, stated:
State banking means the business engaged in by a state as a banker and does not include transactions between a state as a customer and a bank.
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