THE  PRICE  LEVEL

187

and  in  money  in  circulation.  This  expansion  is  not
to  be  explained  on  the  score  of  loan  created  deposits
—  there  having  been  a  substantial  reduction  in  the
loan  account  —  but  must  be  at  least  considered  in
connection  with  the  marked  decline  in  government
deposits.
Second,  as  redemption  periods:  In  the  second
cycle  (November  20-December  31,  1917,)  the
volume  of  checkable  deposits  increased  from  $7,208,-406,000
  to  $7,497,821,000  or  $289,415,000;  the  volume ­
  of  loans  and  discounts  declined  from  $9,535,-527,000
  to  $9,390,836,000  or  $144,691,000;  and  the
amount  of  money  in  circulation  increased  (November ­
  1,  1917-January  1,  1918,)  from  $4,924,928,-348
  to  $5,120,424,908  or  $195,496,560.  There  was
thus  for  the  period  a  large  increase  of  deposits,  despite ­
  a  sharp  contraction  in  loans  and  a  heavy  withdrawal ­
  of  currency.
It  is  possible  to  supplement  the  foregoing,  in  the
case  of  the  third  cycle  and  to  a  less  extent  in  the
case  by  the  fourth  cycle  by  an  examination  of  the  operations ­
  of  the  “  member  banks  in  leading  cities,”  as
reported  weekly  to  the  Federal  Reserve  Board  after
December  7,  1917.  The  issue  period  of  the  third
cycle  extended  from  January  22  to  April  22,  1918.
The  deposits  and  investments  of  the  banks  at  approximately ­
  the  corresponding  dates  are  shown  in  the  following ­
  table;
January  25  April  26
Number  of  reporting  banks  671  681
Net  demand  deposits  on  which  reserve ­
  is  computed  $8,892,320,000  $9,100,089,000
Government  deposits  485,086,000  669,352,000