In this long -but with a wealth of teachings- evolution towards the metal currency, a deeper and deeper breach has been opened between the specific-intrinsic value of precious metals, and the abstract-auxiliary value of the moentary instruments. With the introduction of paper currency, these two realities have become definitely dissociated: at present, they bear no relation with each other.
On reaching this point the monetary system, free from the heavy ballast of metals, can evolve towards more and more intangible forms, more dematerialized, more abstract, in accordance with its primitive nature.
This is in fact what has happened, and what still happens under our own eyes. Today, paper currency is not the only sort of monetary instrument used. To it has been added the so-called scriptural currency, which is purchasing power entered on an account. The paper currency which we take to the bank becomes there monetary units entered on a personal account; these units will then be able to circulate through a simple game of entries between different accounts, without any need to circulate paper currency: this is called clearing. Two people having current accounts in the same or in different banks, may effect their mutual payments by simply entering the corresponding figures in their respective accounts.
This new form of monetary circulation is the last invention of the banks to face, in this case, the paper currency shortage, controlled by the State. By means of the entries in the current accounts the circulation of a lot of paper-money is avoided; but, on top of that, new monetary circulation can be produced. This is, indeed, the bankers' job: to create the purchasing power which is lacking on the market, to make possible an additional monetary circulation, when the existing one is not enough. And this is being done, as it was before, through credit. But now the credit is no longer granted by emitting bank notes more or less backed by cash deposits, because...
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