A Staggering Thought

“If all the bank loans were paid up, no one would have a bank depo­sit, and there would not be a dol­lar of cur­rency or coin in cir­cu­la­tion. This is a stag­ger­ing thought. We are com­pletely depen­dent on the com­mer­cial banks for our money. Someone has to bor­row every dol­lar we have in cir­cu­la­tion, cash or cre­dit. If the banks create ample syn­the­tic money, we are pro­s­per­ous; if not, we starve. We are abso­lutely with­out a per­manent mone­tary sys­tem.When one gets a com­plete grasp upon the pic­ture, the tra­gic absur­dity of our hope­less posi­tion is almost in­cred­ible - but there it is. It (the bank­ing prob­lem) is the most im­por­tant sub­ject in­tel­li­gent per­sons can in­ves­ti­gate and reflect upon. It is so im­por­tant that our pre­sent civi­li­za­tion may col­lapse un­less it is widely under­stood and the defects reme­died very soon.”

- Robert H. Hem­phill, Cre­dit Mana­ger of the Federal Reserve Bank of Atlanta