Front Page Titles (by Subject) Single Bank System. - Money and the Mechanism of Exchange
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Single Bank System. - William Stanley Jevons, Money and the Mechanism of Exchange 
Money and the Mechanism of Exchange (New York: D. Appleton and Co. 1876).
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Single Bank System.
To obtain a clear notion of the way in which bankers help us to avoid the use of money as the medium of exchange, we must follow up the rise of the system from the simplest case to the complete development of the complex organization now existing in the United Kingdom. Let us imagine, in the first place, that there is an isolated town having no appreciable dealings with other parts of the world, and possessing only a single bank, in which each inhabitant has deposited all his money. If any person a, then, wishes to make a payment to b, he need not go to his banker, draw out coin, and carry it to b, but may hand to b a cheque requiring the banker to pay the coins to b, if needed. But if b makes payments in the same way, he will not need to draw out any coin. It would be a mere formality for b to receive the coin due from a, and then pay it back over the counter to the credit of his account with the same banker. The payment is made by merely writing the sum of money to the debit of a's account, and to the credit of b's account. If b wishes to make another payment to c, a similar record in the banker's ledger will accomplish the business. However many other traders, d, e, etc., there may be, their mutual transactions may be settled in the same way, without their seeing a single coin. We may represent this elementary banking organization by the following diagram,
in which it is obvious that P represents the single banker, and a, b, c, d, e, his customers. The deposit banks of Amsterdam and Hamburg furor perfect illustrations of this arrangement.
So long as we regard only the internal transactions of a town, then, a stationary amount of coin, lying untouched in the bank, will allow the whole to be accomplished. If the traders never require to make payments to a distance the metallic money might be dispensed with altogether. But since any of the customers a, b, c, etc., may want his money, the banker ought to keep at least as much as will meet possible demands.