can someone comment on this for me please.....

Goldsmiths could increase the money SUpply by issuing receipts to their borrowers. These borrowers agreed to pay back the gold, with added interest. The actual gold in the vault is only a certain percentage of the receipts that are held by the borrowers and the owners of the gold. In other words, goldsmiths created money. Paper money came into existence because of goldsmiths in the middle ages. Money evolved out of receipts for deposits at goldsmiths. The person depositing the money got the clients name and the amount of money that they were depositing. The receipts soon became negotiable like the bills of exchange. A goldsmith banker was someone that expanded services to include storage wealth. They provided loans, transfers of money, and provided bills of exchange. Every time a dollar is deposited into a bank account, the bank's total reserves get higher. All banks keep some of it on hand as the required reserves. All other reserves get loaned out. When a loan is made, it then makes the money supply increase. Basically, that is how banks make money, and increase their money supply. The goldsmiths can link it to the current banking system by depositing money into an account. Goldsmiths could actually produce more receipts than gold, which created a risky situation