A B C of modern socialism

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by the price mechanism, wangle (it is the best word) the purchasing power of money. Without doubt capitalism finds the banking system invaluable. Technically considered, banking, finance and money are separate activities. - The distinction between finance (as now understood) and banking is in form maintained. The financial houses in the City of London are not the banks. In like manner, the Mint issues money. But all financial transactions, whether the issue of capital or loans, or even bill-discounting, are to-day impotent without the co-operation of banks, whilst the universal habit of paying by cheque instead of by money leaves the Mint in obscurity. It is, of course, theoretically correct to declare that the banks could carry on without finance. Thus the National Guilds would unquestionably act as bankers, but would not be interested in finance, since capital would be superseded by credit. The issue of money is a problem in itself and might become a State function. But these distinctions are too fine for practical consideration. Even if finance is in form distinct from banking, the broad fact remains that the majority of bank directors are industrial magnates or their nominees. And since finance is a dominant factor in modern capitalism, no injustice is done in assuming an organic community of interest between banking and finance.

What really emerges is the ever-widening gap between finance or capital and the functional processes which yield, or can yield, an output in commodities greatly exceeding commercial anticipa-