and local authorities for all their great and rapidly
extending enterprises, formerly abandoned to the profit-maker; and
partly to a series of financial concerns, whose business it should
be to discount the bills and satisfy the requests for loans of
those profit-makers who now appeal to the bankers. But these
financial concerns should be organised, it is suggested, very
largely by trades and industries, specialising in particular
lines, and devoted, so far as possible, to meeting the business
needs of the different occupations. Whether they should be
financial concerns, owned and directed by shareholders, and ran
for their profit; or whether they might not, in some cases, be
owned and directed by the great industrial associations and
combinations that the Government is now promoting in the various
industries, and be run for the advantage of the industries as
wholes, may be a matter for consideration and possible experiment.
In either case, the concerns to which the Government would lend
its capital would, of course, have to be of undoubted financial
stability to be secured, it may be, by large uncalled capital,
or by the joint and several guarantees of a numerous membership;
coupled, possibly, with a charge on the assets."

At first sight this proposal to differentiate the functions of banking
is somewhat startling, and one wonders whether it could possibly
work. On consideration, however, there seems to be nothing actually
impracticable about the scheme. The Government would presumably take
over all the offices and branches of the banks of the country, and
would therein accept money on deposit and current account, making
itself liable to pay the money out on demand or at notice, as the
case may be, just as is done by the existing banks; it would hold
the necessary cash reserve, and it would apparently itself invest a
certain proportion of the money in Government securities, as the banks
do at present. The more difficult part of the banking business, the
advancing of money to borrowing customers, it would hand over to
financial institutions, created for this purpose presumably out of the
ashes of the nationalised banking business. These institutions would
make themselves responsible for the lending side of banking, and would
obviously, and naturally, be allowed to make a profit on this side of
the business. In this differentiation Mr Webb's in