The meanings of savings deposits and of cash deposits have been defined in chapter 3, and their relationships to the financial circulation and the industrial circulation in chapter 15. Since the two together make up the total deposits, it follows that a fluctuation in the proportion of the savings deposits to the total deposits is liable to react on the volume of the cash deposits, and in particular on that of the income deposits, unless it is deliberately counteracted by a corresponding fluctuation in the volume of the total deposits. In this chapter we shall consider, on the basis of the statistical evidence, the extent to which the proportion of the savings deposits fluctuates in actual experience, so as to be in a position to consider the magnitude of the reaction of these fluctuations on the general monetary situation.

We saw in chapter 3 that deposit accounts in England and time deposits in the United States roughly correspond to the savings deposits, whilst current accounts in England and demand deposits in the United States roughly correspond to the cash deposits. In the United States the law requires that the amounts of time deposits and demand deposits respectively shall be separately published, so that there is no difficulty in obtaining statistical data-provided we can regard fluctuations in time deposits as approximately representative of the savings deposits. But in England it has been impossible hitherto to obtain any reliable indications, except by the courtesy of the banks themselves.