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 vol 
ume 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 (Novem 
ber 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, de 
spite a sharp contraction in loans and a heavy with 
drawal 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 op 
erations 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 approx 
imately the corresponding dates are shown in the fol 
lowing table; 
January 25 April 26 
Number of reporting banks 671 681 
Net demand deposits on which re 
serve is computed $8,892,320,000 $9,100,089,000 
Government deposits 485,086,000 669,352,000