Speech at the Chicago Forum of the American Institute of Banking.

This article presents the speech delivered at the Chicago Forum of the American Institute of Banking. The speech focuses on the banking behavior of deposit. It is as a dealer in debts, then, that we look for the peculiarity and economic functions of banks. It has, of course, often been pointed out that the funds owed depositors have the characteristic of being, either by law or custom, payable on demand. In addition, however, a portion of the debts banks owe, namely, checking accounts, have a peculiarity that is shared only by debts in the form of Government or bank notes--they serve as the medium of exchange, or money, of the community.