Warehouse banking (unique item.)
A warehouse bank is one where you go and leave your valuable for later collection. You pay a fee to the banker to look after your stuff and he keeps it safe and sound for you. If this is an antique piano or a distinctive bit of jewelry then it is obvious when your item is or isn't in the bank.
Warehouse banking (non unique items.)
A warehouse bank is one where you go and leave your valuables for later collection. You pay a fee to the banker and he puts your non unique item (grain, gold coin, fiat paper money etc) into a big pot with other similar looking items and when you come back to reclaim you are given an equivalent amount in return, but it almost certainly won't be the exact same items as you deposited, just a replacement that is very ,very similar.
If I put £100 in pound coins into a bank on Monday, the odds of me getting the exact same pound coins back are almost nil if I return a week later.
Why is this distinction important?
Simply because ownership is incredibly hard to prove in the case of non unique items, especially if no attempt is made to keep track of who owns what.
If no attempt is made to keep track of who owns what then an unscrupulous person can use that "fog of war" to their advantage. To give an example from our unique item warehouse bank -
I give the banker my antique Bentley piano to look after and pay him a fee. I think that my piano is safe in storage, being well looked after and have paid a sum of money to the banker to do this looking after. One night I go out to a concert hall to watch a performance...there, on the stage is what looks surprisingly like my piano. It can't be, can it?
I wait impatiently through the performance and then explain the situation to the management, who are anxious to quell my fears and so let me have a (supervised of course) look at the piano after the performance is done. My god! It IS my piano, I can tell by the markings, the security ink and so on.
Surely the banker would have called me to tell me he had been robbed?
Ahhh...the banker has loaned my piano for a fee to the pianist! The swine! But at least he has now been caught and both the pianist and I can reclaim our money and the banker can go to jail for his fraud.
But...what if....I cannot tell my item apart from all others?
So..what if I gave the banker some fiat currency and he loaned it to someone else...would I be able to tell? Would anyone?
Probably not. Even the banker would become hopelessly confused once the paper had started to circulate. Lets have a three man analogy. Dave, Bob and John.
Dave owns a shop, Bob has £3,000 which he wants the bank to look after and John has next to nothing but is willing to work and borrow. Bob puts his £3,000 in the bank, the banker tells him it will be safe.
John agrees to borrow the £3,000 from the banker at interest, and then he spends it at Daves shop. Dave, fearing theft, sensibly puts it into the bank. There is still only £3,000, but the bankers books show much more money than that (called broad money by bankers, this is just a recording of frauds like double billing, double counting, misplacing assets in the liability column and so on.)
As we see, the situation is already extremely complicated. Several people all think they have claims to the £3,000 but actually it was only ever owned by Bob. It never ceases to be Bob's money. Everyone else has just used it. Such procedures if done openly would no doubt attract a fee, if left in the dark and ownership is claimed by multiple people they are flat out fraud. Fraud done in ignorance by some, but deliberately by others, but fraud all the same.
This leads to the interesting position where the banker can have the £3,000 in his possession but be also at the same time on the phone to John asking him when he is going to "get his money back." Worse, John will probably believe that the banker is somehow out of pocket. Even worse, the banker can make a good show of having lost money in a courtroom and so John will probably go bankrupt, even if he works out he has been defrauded. Unless he can come up with something like proof of what the banker has done or can find some way to highlight the fraud he is snookered.
Similarly, it can lead to the position where two people arrive at the bank to pick up "their" £3,000 at the same time and both of them will be going home empty handed because the banker has loaned it to someone who hasn't brought it back to the bank (yet.)
This whole complicated mess can be easily avoided by keeping track of whose property is where.
Accurate recording could end all banking crisis forever, this is blatantly obvious - but then there are no opportuinites for the bankers to misrepresent their way to wealth and power.
For example - right now there are roughly £50billion in legal tender in the united kingdom, most of which is in the possession of the bankers and there are also trillions of pounds of imaginary debts.
No one owes them anything, they already have it.