ouses. If the
members of the community were wealthy enough each would have more
of these and of other things, and the sum total of money would be
greater. Great as is the convenience of money, poorer communities have
to do with little of it. It is, therefore, a confusion of cause and
effect when poor communities imagine that their poverty is due to lack
of money.

Sec. 5. #Concept of the individual monetary demand.# Let us now seek
to get in mind the idea of an _individual monetary demand,_ as that
amount of money which at any time is required by an individual to make
his purchases in expending his income. Every man may be thought of
as having an average monetary demand, or his average individual cash
reserve, throughout a period. A man with a salary of $50 a month
paid monthly has ordinarily a maximum monetary demand of $50. If his
expenditures are made in two equal parts, the one on pay-day, the
other thirty days later, his average monetary demand during the month
is a little over $25. If most of his purchasing is done in the first
week of the month, his average monetary demand may be perhaps $10.
Many a workman purchases on credit, running accounts at the stores for
a month. Then on pay day he spends his entire month's wages the day
he receives it, and goes without money for the rest of the month. His
average monetary demand throughout the month would then be about
equal to one day's wages. Evidently any person's cash reserve may
be expressed as that proportion of his income that is to him of more
value retained in money form for any period than if at once expended.

In this conception of the individual monetary demand, must, however,
be included not merely the demands of retail purchasers, made by
themselves, but also those of all agencies such as merchants, bankers,
and transportation companies, serving the needs of ultimate consumers
of goods. The use of money may be necessary several times before a
commodity completes its journey from producer to consumer.

Of two persons whose expenditures of money are of the same kind and
made at the same rate, the one having the larger amount of purchases
to make has the larger monetary demand. But the amount of purchases
does not always vary directly with the amount of real income[2]; for
example, a farmer and a village mechanic may have at their disposal
incomes equal in the quantities of goods, such as food, fuel,
clothing, and house-uses (worth, let us say, $1000 for ea