rich enough to have much money, and compact enough to be able to
lodge its money in single banks, it at once begins so to do. English
colonists do not like the risk of keeping their money, and they wish
to make an interest on it. They carry from home the idea and the
habit of banking, and they take to it as soon as they can in their
new world. Conjectural history would be inclined to say that all
banking began thus: but such history is rarely of any value. The
basis of it is false. It assumes that what works most easily when
established is that which it would be the most easy to establish,
and that what seems simplest when familiar would be most easily
appreciated by the mind though unfamiliar. But exactly the contrary
is true. Many things which seem simple and which work well when
firmly established, are very hard to establish among new people, and
not very easy to explain to them. Deposit banking is of this sort.
Its essence is that a very large number of persons agree to trust a
very few persons, or some one person. Banking would not be a
profitable trade if bankers were not a small number, and depositors
in comparison an immense number. But to get a great number of
persons to do exactly the same thing is always very difficult, and
nothing but a very palpable necessity will make them on a sudden
begin to do it. And there is no such palpable necessity in banking.
If you take a country town in France, even now, you will not find
any such system of banking as ours. Cheque-books are unknown, and
money kept on running account by bankers is rare. People store their
money in a caisse at their houses. Steady savings, which are waiting
for investment, and which are sure not to be soon wanted, may be
lodged with bankers; but the common floating cash of the community
is kept by the community themselves at home. They prefer to keep it
so, and it would not answer a banker's purpose to make expensive
arrangements for keeping it otherwise. If a 'branch,' such as the