IRVING FISHER, Professor Emeritus of Economics at Yale says:
"When a bank lends or invests, it extends credit, i.e. creates check-book money. When it gets loans paid or sells investments, it contracts credit, i.e. destroys check-book money. In normal times such creation and destruction of money roughly balance. But when they do not balance the nation's money is inflated or deflated and causes a boom or a depression."
LEWIS W. DOUGLAS, former Director of U. S. Budget, wrote in the Atlantic Monthly, in the fall of 1935:
"The Nation's banks today hold approximately 53% of the entire Federal debt. Banks, when they buy Government Bonds, rarely pay for them with cash that someone has deposited in the bank. Instead, they create a bookkeeping credit, against which the Government is entitled to draw... In a country in which more than 90% of all business is done by the use of checks, there is no essential difference between the creation of bank deposits by fiat and the creation of printing press money. Bank deposits not currency constitute our chief circulating medium."
SUMNER H. SLICHTER, Professor of Business Economics at Harvard says in his Modern Economic Society":
"When banks grant credit by creating or adding to deposits subject to check... new dollars are created. It is true that the new dollars are not stamped out of gold. They are credit dollars and they are created by the stroke of the pen rather than by dies and the stamping machines, but their purchasing power is not less than that of the dollars coined at the government mint. In other words the principal way in which dollars are created in modern economic society is by borrowing. This means that the number of dollars in existence at any particular time depends upon the willingness and ability of banks to lend. The volume of purchasing power fluctuates with men's state of mind; the growth of pessimism may suddenly throw millions of men out of work, or the growth of confidence may create thousands of jobs overnight."
THOMAS EDISON said:
"The only dynamite that works in this country... is the dynamite of a sound idea. I think we are getting a sound idea on the money question. The people have an instinct which tells them that something is wrong and that the wrong somehow centers in money.
"Don't allow them to confuse you with the cry of paper money. The danger of paper money is precisely the danger of gold if you get too much it is no good. There is just one rule for money and that is to have enough to carry all the legitimate trade that is waiting to move. Too little and too much are both bad. But enough to move trade, enough to prevent stagnation on the one hand and not enough to permit speculation on the other hand, is the proper ratio.
"If our nation can issue a dollar bond it can issue a dollar bill. The element that makes the bond good makes the bill good also. The difference between the bond and the bill is that the bond lets money brokers collect twice the amount of the bond and an additional 20 percent, whereas the currency pays nobody but those who contribute directly in some useful way.
"It is absurd to say that our country can issue $30,000,000 in bonds and not $30,000,000 in currency. Both are promises to pay: but one promise fattens the usurer and the other helps the people.
"It is the people who constitute the basis of government credit. Why then cannot the people have the benefit of their own gilt-edge credit by receiving non-interest-bearing currency - instead of bankers receiving the benefit of the people's credit in interest-bearing bonds? If the U. S. government will adopt this policy of increasing its national wealth without contributing, to the interest collector for the whole national debt is made up of interest charges - then you will see an era of progress and prosperity in this country such as could never have come otherwise."
"The function of money is not to make money but to move goods. Money is only one part of our transportation system. It moves goods from man to man. A dollar bill is like a postage stamp; it is no good unless it will move commodities between persons. If a postage stamp will not carry a letter, or money will not move goods, it is just the same as an engine that will not run. Someone will have to get out and fix it."
DAVID CUSHMAN COYLE:
The cross-roads of history will be the place where the United States does or does not develop means for keeping money out of Wall Street and making it travel up and down Main Street."
From "Brass Tacks"