Still weaker is Mr Webb’s assumption that if the interests of the shareholders with “their perpetual and insatiable desire for profit” were eliminated, cheap and plentiful banking facilities would inevitably result from bureaucratic management.  The contrary has been shown to be the case in the examples of the Post Office, of the Telephone Service, and the London Water Supply.  In the case of the telegraph and the telephones, the Government took over prosperous businesses, and has managed them at a loss.  In the matter of the Post Office it is not possible to compare the Government with individual enterprise, but it will generally be admitted that the Telephone Service has by no means been improved since the Government took it over.  Mr Webb points out that nationalisation, whether of banks or of other forms of enterprise, does not necessarily mean government under a Minister by a branch of the Civil Service.  But it is impossible to ignore the fact that as soon as nationalisation takes place those who are responsible for the management of the enterprise are practically certain to develop the qualities and idiosyncrasies of civil servants, which are so unlikely to tend to elasticity, rapidity and efficiency in business management.

In fact, Mr Webb practically grants this point by the very interesting development he suggests by which the two chief functions of banking should be differentiated, and one of them should be nationalised and the other should remain in the hands of private enterprise.  He develops this truly ingenious suggestion as follows:—­

“Just as we have (except for some obsolescent survivals) separated the function of issuing paper money from that of keeping current accounts, so we shall separate the function of keeping current accounts from that of money-lending.  The habit of the British banker of combining in one and the same concern (a) the essentially routine business of keeping current accounts or receiving deposits; and (b) the much more difficult and hazardous business of lending capital to private traders, is not a necessary characteristic of banking organisation; and, whilst possibly the most profitable to the profit-seeking banker, this combination may not be the most advantageous from the standpoint of the community.

“It may accordingly be suggested that the business of banking, as understood in this country, is destined to be further divided into two parts, one of which is ripe for immediate nationalisation, and need no longer be carried on for private profit, whilst the other should be the sphere of a number of separate and diversely specialised organisations catering for particular needs.  The whole of the deposit and current account side of banking—­with its services in the way of keeping securities, collecting dividends, meeting calls, making regular payments, and carrying through the purchase and sale of securities—­ought to be united with