10

A TREATISE ON MONEY

BK. I

“reserve” against its deposits. These deposits wejmay term Central Bank-Money . It is convenient toassume that all the Central Bank-Money is held bythe Member Banks— in so far as it may be held bythe public, it may be on the same footing as State-Money or as Member Bank-Money, according tocircumstances. This Central Bank-Money plus theState-Money held by the Member Banks makes upthe Reserves of the Member Banks, which they, inturn, hold against their Deposits. These Depositsconstitute the Member Bank-Money in the handsof the Public, and make up, together with theState-Money (and Central Bank-Money, if any)held by the Public, the aggregate of CurrentMoney.

We can, therefore, continue our genealogical treeso as to exhibit the relationships thus :

Commodity Managed Fiat

Bank-Money

Held by CentralBank

Held byMember Banks

Central Bank-Money

Reserve Money

State-Money

Held byPublic

Member Bank-Money

Current Money