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

6 Money, Bank Credit, and Economic Cyclesownership is not transferred, but rather the depositor continuesto own the good, while in the case of the deposit of fungiblegoods, one might suppose that ownership is transferred tothe depositary). Nevertheless, we must emphasize that theessence of the deposit remains unchanged and that the irregulardeposit fully shares the same fundamental nature of alldeposits: the custody and safekeeping obligation. Indeed, in theirregular deposit there is always an immediate availability infavor of the depositor, who at any moment can go to the grainwarehouse, oil tank, or bank safe and withdraw the equivalentof the units he originally turned over. The goods withdrawnwill be the exact equivalent, in terms of quantity andquality, of the ones handed over; or, as the Romans said, thetantundem eiusdem generis, qualitatis et bonetatis.2THE ECONOMIC AND SOCIALFUNCTION OF IRREGULAR DEPOSITSDeposits of fungible goods (like money), also called irregulardeposits, perform an important social function whichcannot be fulfilled by regular deposits, understood as depositsof specific goods. It would be senseless and very costly todeposit oil in separate, numbered containers (that is, as sealeddeposits in which ownership is not transferred), or to placebills in an individually-numbered, sealed envelope. Thoughthese extreme cases would constitute regular deposits inwhich ownership is not transferred, they would mean a loss ofthe extraordinary efficiency and cost reduction which resultfrom treating individual deposits jointly and indistinctly fromone another 6 at no cost nor loss of availability to the depositor,who is just as happy if, when he requests it, he receives a tantundemequal in quantity and quality, but not identical interms of specific content, to that which he originally handedover. The irregular deposit has other advantages as well. In6 In the specific case of the monetary irregular deposit, the occasional useof cashier services offered by banks is an additional advantage.