A DIFFICULTY 177

side of banking, and would obviously, and naturally,
be allowed to make a profit on this side of the
business. In this differentiation Mr Webb's in-
genuity is seen at its very best. He reserves for the
State that part of banking which is purely a matter
of routine, and he leaves to private enterprise that
part of it which requiries the elasticity and judgment
and quickness in which the average bureaucrat is
most likely to fail. A-certain amount of friction may
easily arise from this differentiation. The interest
that the State would be enabled to allow to depositors
would clearly depend to a great extent on the interest
which it would be able to receive from the financial
institutions engaged in lending the money. These
institutions could naturally pay the State interest
according to the rate which they were able to charge
their borrowing customers, leaving themselves a
margin for profit and for protection against the risk
that their business would involve. It is obvious
that there might at times be considerable difficulty
in adjusting these two different points of view, and
anybody who knows anything about the length of
time and argument involved in inducing officials to
make up their minds can only fear that occasional
jarring in this connecting link between the two sides
of banking might sometimes produce effects which
would be awkward for the industry of the country.

But apart from this obvious difficulty, can we
contemplate with equanimity the prospect of the
State monopoly of the ordinary banking facilities as
they present themselves to the man in the street,
namely, the provision of bank branches, the use of