A commodity is not money if it does not alter prices

Money is something that alters prices.

When a bank makes a loan it puts more money in circulation, this effectively creates money because a reduced reserve ratio does not alter the quantity of bank deposits and money held in reserve doesn't alter prices.

Fractional reserve banking is a form of theft because when the money is deposited, the cash is spent into the economy (perhaps to purchase a mortgage) not kept in a vault, and instead the customer is given bank receipts (credit) instead of a warehouse account.

Cash is not money if it is not 'active' in the economy. If cash is held by banks, in their vaults, is does not alter prices and so, for that reason, it is not money in the truest sense. A bank with full reserves alters prices to the same extent as one with no reserves, hence cash cannot be said to be money in and of itself, it can only be money if it is outside the banks. It is not money in all cases. Cash might be money if it is altering prices.