Ralph George Hawtrey: Bank

Ralph George Hawtrey was British economist. Explore interesting quotes on bank.
Ralph George Hawtrey: 22   quotes 0   likes

“By its means the banker creates the means of payment out of nothing, whereas when he receives a bag of money from his customer, one means of payment, a bank credit, is merely substituted for another, an equal amount of cash.”

Ralph George Hawtrey

Source: Currency and Credit (1919), Chapter II, "Metallic Money", p. 20 (2nd ed. 1921)
Context: The use of money does not disestablish the normal process of creating credit. Money, it is true, is always being paid into the banks by the retailers and others who receive it in the course of business, and they of course receive bank credits in return for the money thus deposited. But for the manufacturers and others who have to pay money out, credits are still created by the exchange of obligations, the banker's immediate obligation being given to his customer in exchange for the customer's obligation to repay at a future date. We shall still describe this dual operation as the creation of credit. By its means the banker creates the means of payment out of nothing, whereas when he receives a bag of money from his customer, one means of payment, a bank credit, is merely substituted for another, an equal amount of cash.

Money

“Banks lend by creating credit. They create the means of payment out of nothing.”

Ralph George Hawtrey

Ralph M. Hawtrey as assistant secretary of the British Treasury, quoted in: Robert Latham Owen (1939), National economy and the banking system of the United States. p. 102

“Economic theory, in every branch, deals with practical affairs. Its subject is human welfare, and it is never entirely dissociated from the practical question of how human welfare is to be promoted. But it is a special characteristic of the art of central banking that it deals specifically with the task of an authority directly entrusted with the promotion of human welfare. Human welfare, human motives, human behaviour supply material so baffling and elusive that many people are sceptical of the possibility of building a scientific edifice on so shifting a foundation. But however complex the material, and however imperfect the data, there is always an advantage to be gained from systematic thought.”

Ralph George Hawtrey

Preface
The Art of Central Banking (1932)

People , Art , Motivation , Question