See "United States Depository."

Deposits ("Bank Statement"). Deposits as referred to under " Bank Statement" are somewhat difficult to define from the fact that money itself to the full amount of the deposits is not necessarily understood, for the reason that a man with a deposit of $50,000 may borrow from the same bank $25,000, which, instead of being paid to him in cash, will be credited to his account, swelling it to $75,000. One-third of this amount, therefore, certainly is not cash, and the increase in the deposit does not increase the bank's money holdings. This explains why an increase in deposits follows an expansion of loans. Such matters are all based on credit and a due appreciation of its importance in connection with financial and business affairs should be kept constantly in mind.

The deposits of the associated banks of New York are divided so as to show separately the amount of "net demand deposits " and "net time deposits " (for an understanding of which turn to the subjects in quotations), and enables one to estimate the "reserve" requirements, as explained under the subject "Reserve."

Since the inauguration of the Federal Reserve System so many of the old banking customs of this country have been changed, it is recommended that all those who desire a better understanding of this subject should read the "Federal Reserve Act " to be found at the end of the book.