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 borrows saved money it gives the citizens the choice whether they will make the sacrifice; when it borrows from banks it creates fresh spending power, so lowering the value of all the money already in existence, including its own, and so perpetrating something very like a swindle, which robs those who are unable to increase their incomes and lines the pockets of those who have essential goods and services to sell.

To take a practical example let us suppose that the Government makes an issue of ten million pounds' worth of Treasury Bills which are taken up by the banks. The first result would be that ten millions would be transferred from the banks' balances in the Other Deposits at the Bank of England to the Government's balance in the Public Deposits, and the banks would have ten millions more Government securities or bills discounted, according to their system of book-keeping, and ten millions less cash at the Bank of England. But the Government would forthwith draw on its increased balance at the Bank, to pay for the fighting men's needs, and the contractors and others who received its cheques would pay them into their banks. Thus the ten millions would be transferred back from the Public