on account of the advances made by him. It is a business truism that no banking house could at a moment meet all its outstanding obligations.* A necessary source of banking profits, e.g., is a large excess of the volume of business over reserves.
As to (h) : Another great part of the basis of such loans is made up of invested funds and collateral held by the lender. These at the same time are much of the basis on which rests the
' Property convertible into cash at will.
■ The legally ubligatory reaerre for the National Banks, (or inataoce, Ib 2G per cent, at combined note circulation and depoelta in central c banks, 15 per cent, in otbers. — Seviud Statute*. 5191.
■■■rrit
lender's presumptive ability to pay claims preseDted. But these investmenta, in industry or real estate, in interest-bearing securities and collateral of whatever description, represent future income of the lender's debtors (as, e.g., government and municipal securities), or property which is already either engaged in the industrial process or tied up in forms of wealth (a8> e.g., real estate) which do not lend themselves to industrial uses. Ijoans obtained on property which has no present industrial use, which cannot in its present form or under existing circumstances be employed in the I processes of industry (as, e.g., speculative real estate), or loans on property which is already enftV j I gaged in the industrial process (as, e.g., stocks, ^ ^ 1 industrial plant, goods on hand, real estate in ,>^' use),' represent, for the purpose in hand, nothing
more substantial than a fictitious duplication of material items that cannot be drawn into the industrial process. Therefore such loans