ssisting
trade, and could not live without trade, and that trade if deprived of
their services would be gravely inconvenienced and could only resume its
present activity by making a new machinery more or less on the same
lines. The bill whose imaginary history has been traced, came into being
because the drawer had a claim on England through a trade transaction.
He was able to sell it to the South American bank only because the bank
knew that many other people in Argentina would have to make payments to
England and would come to it and ask it for drafts on London, which, by
remitting this bill to be sold in London, it would be able to supply.
International finance is so often regarded as a machinery by which paper
wealth is manufactured out of nothing, that it is very important to
remember that all this paper wealth only acquires value by being
ultimately based on something that is grown or made and wanted to keep
people alive or comfortable, or at least happy in the belief that they
have got something that they thought they wanted, or which habit or
convention obliged them to possess.

FOOTNOTES:

[Footnote 2: All this imaginary picture is of events before the war. At
present Dr. Pillman, being a patriotic citizen, is saving much faster
than before, and putting every pound that he can save into the hands of
the British Government by subscribing to War Loans and buying Exchequer
bonds. He is too old to go and do medical work at the front, so he does
the next best thing by cutting down his expenses and finding money for
the war.]

CHAPTER III

INVESTMENTS AND SECURITIES

So far we have only considered what happens to the money of those who
save as long as it is left in the hands of their bankers, and we have
seen that it is only likely to be employed internationally, if invested
by bankers in bills of exchange which form a comparatively small part of
their assets. It is true that bankers also invest money in securities,
and that some of these are foreign, but here again the proportion
invested abroad is so small that we may be reasonably sure that any
money left by us in the hands of our bankers will be employed at home.

But in actual practice those who save do not pile up a large balance at
their banks. They keep what is called a current account, consisting of
amounts paid in in cash or in cheques on other banks or their own bank,
and against this account they draw what is needed for their weekly and
mo