(Extract from Midland Bank Review)
"If now we examine a bank balance sheet, we shall see that bank deposits are like notes in that they are supported by debts due to the banks. True, the banks hold some currency, that is, authorized pieces of paper and coin, to meet immediate demands; but we have already seen that currency is nothing more than debt...
Finally the debts of the banks are supported by entries in their books representing debts owed to them in respect of direct borrowing by their customers. Many of these are "secured", that is to say, the borrower has pled- ged or mortgaged to the bank some assets he possesses and on the ownership and estimated value of which he borrows. The assets may be houses or lands, or other physical thing, but the proportion of bank accomodation secured in this way is small, so that it is true to describe the debts of the banks as supported almost entirely by debts owing to the banks by public authorities, business undertakings and individual customers.
So long as the debts owed to the banks, together with the cash they hold are at least equal to the debts they owe, the banks are "solvent" and so long as the debts owing to the banks can be converted into repayment of their liabilities to their customers, the position of the banks is "liquid"... the fact remains that debts from the banks are balanced by debts to the banks. Thus all the money is bank indebtedness, and it is this cardinal fact that gives to the banking system the power to expand or contract the quantity of money by increasing or diminishing the quantity of bank debts."
Taken from the Statement of Evidence of the Social Credit Political League of England, published November, 1957 - p. 44, appendix. B.