is plentiful and wages good,
for expensive foods having little nutriment and then, for lack of
savings, to go badly underfed when work is slack and wages are small.
There is for each class of circumstances a golden mean of saving. The
saving habit may develop to irrational excess and become miserliness,
but this happens rarely compared with the many cases where men in the
period of their largest earnings spend up to the limit on a gay life
and make no provision for any of the mischances of life--business
reverses, loss of employment, accidents, temporary sickness, permanent
invalidity, or unprovided old age. Despite the development of late of
new agencies and opportunities for saving there is need of doing more
toward popular education in thrift.[3]

Sec. 3. #Commercial bank deposits of an investment nature.# If a
commercial bank pays no interest on demand deposits there is no motive
for the depositor to keep a balance larger than he needs as current
purchasing power. When his bank account increases beyond that point,
it becomes available for a more or less lasting investment to yield
financial income. If the sum is small or if the owner is at all
uncertain as to his plans or if he is not in a position to find
another attractive form of investment, the offer by the bank of a
small rate of interest on special time deposits (2 to 3 per cent is
not an unusual rate in such cases) will suffice to cause him to leave
such funds in the bank. Since about 1900 the practice has been greatly
extended of paying interest even on "current balances" of regular
checking accounts (demand deposits). If the new 5 per cent rule[4] as
to reserves against time deposits operates to cause commercial banks
generally to pay a rate ranging from 2-1/2 to 3-1/2 per cent on time
deposits, their amount will doubtless increase greatly. But still, in
the future as in the past, those depositors having funds that can be
invested for considerable periods will seek a higher rate of interest
than can be obtained from commercial banks.

In their loaning function the "commercial" banks (as the adjective
indicates) serve mainly the special needs of the _commercial_ elements
of the community--business men borrowing for short terms to carry out
particular transactions. Loans made on short-time commercial paper
(quick assets) are very suitable to the needs of a bank that has its
liabilities largely in the form of demand deposits. Time deposits can
be more safel