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Deposits of Demand Paper as Purchases
Turner, Roscoe
Turner, Roscoe
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Abstract
Bank clearings have long been regarded as one of the most valuable indices of the volume of commercial transactions had during a given period. Implicit in this is recognition of the fact that payments, where more than a few dollars are involved, are today almost universally made by check. It is, of course, recognized, however, that such statistics contain an element of unreliability in that an increase in amount may be accounted for, at least in part, by a greater use of bank deposits, as well as by reason of a greater amount of business done. The movement to popularize the "trade acceptance" as an instrument to displace the open book account has no doubt contributed to the increase in volume of bank clearings, but without occasioning a corresponding increase in commercial transactions. Possibly it might also be shown that a greater number of time or demand notes have been drawn payable at banks than heretofore, and, like the trade acceptance so payable, have contributed to the aggregate of bank clearings. But whatever their utility to reflect an increase in the volume of business, clearing statistics testify convincingly that bank deposits and the instruments used to avail of deposits are elements of increasing significance in the financial scheme of things.