OH. I 5 INDUSTRIAL & FINANCIAL CIRCULATIONS 249

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currently produced fixed capital is quite a small pro-portion of the total turnover of securities.

Nor does the price of existing securities depend atall closely over short periods either on the cost ofv production or on the price of new fixed capital. For

existing securities largely consist of properties whichcannot be quickly reproduced, of natural resourceswhich cannot be reproduced at all, and of the capitalisedvalue of future income anticipated from the possessionof quasi-monopolies or peculiar advantages of one kindor another. The investment boom in the UnitedStates in 1929 was a good example of an enormous risein the price of securities as a whole which was notaccompanied by any rise at all in the price of the cur-> rent output of new fixed capital. Furthermore, the

values of the two categories of wealth traded, namelyLoan Capital (e.g. bonds) and Real Capital ( e.g . shares),will not infrequently move in opposite directions, thuspartially compensating one another.

The fact of the financial turnover varying in-dependently from the industrial turnover is not, how-'• ever, of so much practical importance as might have

been expected. For the velocity of the Business-4 deposits B is so very high—as a result of the great

development of devices for economising the use of cashby Stock Exchange clearings and the like—that theabsolute amount of the variations in the volume ofmoney so employed cannot ordinarily be very great.

The main variation in the total demand for moneyfor financial purposes arises, therefore, in quite adifferent way, namely in the volume of the Savings-deposits.

The existence of Savings-deposits is an indicationthat there are persons who prefer to keep their re-sources in the form of claims on money of a liquidcharacter realisable at short notice. On the otherhand, there is another class of persons who borrow^ from the ban k s in order to finance a larger holding

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