174 STATE MONOPOLY IN BANKING

are practically certain to develop the qualities and
idiosyncrasies of civil servants, which are so unlikely
to tend to elasticity, rapidity and efficiency in busi-
ness management.

In fact, Mr Webb practically grants this point by
the very interesting development he suggests by
which the two chief functions of banking should be
differentiated, and one of them should be nationalised
and the other should remain in the hands of private
enterprise. He develops this truly ingenious sug-
gestion as follows:—

" Just as we have (except for some obsolescent
survivals) separated the function of issuing paper money
from that of keeping current accounts, so we shall
separate the function of keeping current accounts from
that of money-lending. The habit of the British banker
of combining in one and the same concern (a) the
essentially routine business of keeping current accounts
or receiving deposits; and (6) the much more difficult
and hazardous business of lending capital to private
traders, is not a necessary characteristic of banking
organisation; and, whilst possibly the most profitable
to the profit-seeking banker, this combination may not
be the most advantageous from the standpoint of the
community.

" It may accordingly be suggested that the business
of banking, as understood in this country, is destined
to be further divided into two parts, one of which is ripe
for immediate nationalisation, and need no longer be
carried on for private profit, whilst the other should be
the sphere of a number of separate and diversely spe-
cialised organisations catering for particular needs. The
whole of the deposit and current account side of banking
—with its services in the way of keeping securities,
collecting dividends, meeting calls, making regular