A. Well, when they lend your Q. But suppose they've already $100 to someone they charge lent it to another customer?
him interest.
A. Then they'll let you have
Q. How much?
someone else's money.
A. It depends on the Bank Rate. Q. But suppose he wants his too Say five and a-half per cent. ... and they've let me have it?
That's their profit.
A. You're being purposely ob-
Q. Why isn't it my profit? Isn't it tuse.
my money?
Q. I think I'm being acute. What
A. It's the theory of banking if everyone wanted their money practice that...
at once?
Q. When I lend them my $100 A. It's the theory of banking why don't I charge them inter-practice that they never would.
est?
Q. So what banks bank on is not
A. You do.
having to meet their commit-
Q. You don't say. How much?
ments?
A. It depends on the Bank Rate. A. I wouldn't say that.
Say half a per cent.
Q. Naturally. Well, if there's
Q. Grasping of me, rather?
nothing else you think you can
A. But that's only if you're not tell me...?
going to draw the money out A. Quite so. Now you can go off again.
and open a banking account.
Q. But of course, I'm going to Q. Just one last question.
draw it out again. If I hadn't
wanted to draw it out again I A. Of course.
could have buried it in the gar-
Q. Wouldn't I do better to go off
den, couldn't I?
and open up a bank?
vi
Section I
WHAT CREATURE
IS THIS?
What is the Federal Reserve System? The answer
may surprise you. It is not federal and there are
no reserves. Furthermore, the Federal Reserve
Banks are not even banks. The key to this riddle is
to be found, not at the beginning of the story, but
in the middle. Since this is not a textbook, we are
not confined to a chronological structure. The
subject matter is not a curriculum to be mastered
but a mystery to be solved. So let us start where
