chapter  XXVII
6 Pages


The service of transporting capital (or more properly Command over Capital) is in essentials independent of the nature of the currency and could be quite well dealt with on the supposition that the money stock consisted only of gold pieces-could be dealt with, that is to say, without reference to the fact that the banking system also undertakes the manufacture of cheque currency. In view, however, of the fact that the use of a cheque currency contributes directly to the efficiency of the work of transporting capital by enabling the banks to transfer resources from point to point cheaply and rapidly, it has been more convenient to adhere to actual conditions, in which the cheque forms the principal means of payment. But in order to isolate the service of transporting capital it was necessary to eliminate that

part of the banks' work which is concerned with variations in the volume of the cheque currency and in the volume of payments it is required to effect, and proceed on the assumption that the amount of cheque currency supplied was just that amount required to enable people to effect the current volume of payments at the normal level of prices.