46

A TREATISE ON MONEY

BK. I

as existed in Europe during the post-war inflationperiod, may also reduce 7c x far below its normal valueby inducing customers to make their purchases in ahurry. But apart from such exceptional causes, h xis unlikely to change its value materially between oneyear and another.

To make a guess at what this stable average valueof h x actually is, is made difficult by the absence(at present) of any statistics which would enable usto distinguish between the income-deposits and thebusiness-deposits. Since the matter will be examinedmore carefully in Volume ii., it will be sufficient tosay here that in the case of Great Britain the averagevalue of h x is in all probability more than 5 per centand less than 12 per cent of the community’s annualincome, and may be put provisionally at somewherein the neighbourhood of 8 per cent.

Let us turn next to the Business-deposits. Herewe are likely to find much less stability and regularitythan in the case of the Income-deposits. The volumeof transactions, in respect of which the business-deposits are turned over, will consist of the chequesdrawn to cover all the exchanges of goods, docu-mentary instruments and titles, etc., passed backwardsand forwards between business men, and may beclassified as follows :

(i.) Transactions arising out of the division of pro-ductive functions, namely :

(a) Payments from entrepreneurs to the income-deposits of the factors of production ;

(i b ) Transactions between those responsible for thestage of process (of extraction, manufacture,transport or distribution) just completed andthose responsible for the next stage or forassembling the different components ;

(ii.) Speculative transactions in capital goods orcommodities ;

(iii.) Financial transactions, e.g. the redemption