Money, Bank Credit, and Economic Cycles - The Ludwig von Mises ...

86 Money, Bank Credit, and Economic Cyclesbankers carry out: demand deposits and time “deposits.” Inthe first case, customers entrust their money interest-free tobankersso the money will be safer, and more accessible for makingpayments, and to avoid the hassle and trouble of countingand guarding it, and also because, in gratitude for this gooddeed they do the moneylender in giving him their money, ifit so happens they have no money left under his charge, hewill also accept some overdrafts without interest. 79The second operation, the time “deposit,” is very differentfrom the first and is in fact a true loan or mutuum which isgranted the banker for a fixed term and yields interest. Saraviade la Calle, in compliance with the traditional canonical doctrineon usury, condemns this transaction. Furthermore, heclearly states that in the case of the demand-deposit contract,customers should pay the bankerfor if they deposit money, they should pay for the safekeepingand should not derive as much profit as the laws permitwhen depositing money or property that requires safeguarding.80Saravia de la Calle goes on to censure those clients who selfishlytry to capitalize on the illicit activity of bankers, makingdeposits and expecting bankers to pay interest. As he vividlyputs it,He who deposits his money with someone he knows willnot guard it, but will spend it, is not free from sin, at leastvenial sin. He acts as one who turns over a virgin to a lecheror a delicacy to a glutton. 81Moreover, the depositor cannot ease his conscience bythinking the banker will loan or use other people’s money butnot his own.79 Ibid., p. 195.80 Ibid., p. 196.81 Ibid., p. 197.