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Wednesday, 3 June 1942

Unexpected consequences of banking convenience have appeared. The idea of the cheque was a very obvious and a simple one, yet its working out leads us to quite a remarkable kind. The opening nineteenth century saw the rise of the cheque to an importance far exceeding that of the restrained aud regulated bank note. If cheques were forbidden to-morrow, all the money in the country, even if no one held any for more than a day, would scarce suffice for half the needs of the very slackest working of our economic life. An enormous amount of business of the English-speaking communities is now transacted by cheque without the moving of a bank note or the shifting of a coin. The clearing house has become an organ of primary importance in our economic life.

The Commonwealth Bank cannot function as it was originally intended to function in our economic life until it engages more actively in general banking business. It should determinedly compete with the private banks in order to control more effectively the economic resources of the country. The article continues -

The experience of the century is making it clear that, except for the convenience of paper end coins for small immediate transactions, it would be possible to dispense with actual concrete money altogether; it would be possible co sustain the general working of an entire economic system by clearing-house bookkeeping by the continual transfer of money on account, of crude purchasing power, that is, from one account to another.

I hope that the Government will take steps to see that the Commonwealth Bank extends its operations along the lines I have indicated.

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