CH. 3

THE ANALYSIS OF BANK-MONEY

45

show a progressive fall between one quarter-day andthe next. But the most important seasonal fluctua-tion in the value of k x is likely to be found in the caseof agriculturalists who receive their incomes when theysell their crops. In the case of such a country asIndia, for example, the seasonal fluctuations in thedemand for cash in different districts due to this causeare so great as to be a matter of common observation.In a community made up of weekly wage-earners,quarterly salary - earners and agriculturalists, it isevident, therefore, that the composite value of k x (weinclude—the reader will remember—notes as well asbank-accounts under the designation income-deposits)will describe a complex curve with many peaks anddepressions through the year, even though its yearlyaverage is fairly constant.

Its average value, moreover, will depend not onlyon the average length of the intervals between pay-days but also on the habits of the community in thematter of paying its bills pari passu with consumptionor in arrear ; i.e. on whether its disbursements aremade at a level daily rate or whether they are con-centrated in the periods immediately after pay-days.Where certain heavy payments are concentrated atparticular seasons, this will be reflected in a corre-sponding seasonal drop in k x —as, for example, in thecase of the British income-tax which is well known tohave the effect of appreciably depressing the level ofthe income-deposits in the spring.

Changes in such customs and habits affecting thetimes and seasons of receipts and disbursements—which are, however, likely to be slow—will generallyhave more influence on the average value of k x overthe whole year than will fluctuations in trade or inprices. A temporary falling away in real incomesmay have some effect in reducing 4 asa result of theeffort to maintain consumption at a time when suchincomes are falling. A distrust of the currency, such