are empowered to create. The process of creation is one of giving the promise of the Reserve Banks, in the form of Reserve notes or deposits, in exchange for the promises made to other Reserve
- Commercial (Member) Bank Credit — A multiple, ranging from 5 to 10 times the amount of reserves the bank holds in its reserve bank. The Board of Governors may raise or lower this requirement, making money tight or easy. 22. Commercial Bank Deposits — The deposits created when banks make loans or buy investment obligations, and the borrower or seller leaves his money on deposit. All deposits are created in this way, except when the Reserve authorities buy Government or corporation securities, then the deposits are created to credit of government. 23. Personal Cheque — A depositor's order instructing his bank to transfer funds from his account to the recipient's account, and is used in making the bulk of their monetary payments. 24. Legal Tender Money — Coin and currency. On the Reserve notes there is printed this: "This note is Legal Tender for All Debt, both Public and Private and is redeemable in lawful money (that is by giving you another bill like the one you present) at the United States Treasury or at any Federal Reserve Bank." On U.S. Silver Certificates, it is the same except it is "redeemable in silver dollars." 25. Investment Obligations — U.S. Bonds, corporate bonds, personal notes, mortgages, debentures, bills of exchange acceptable promise to pay, anything representing a monetary value. Loans — The extending of bank credit to borrowers, and the "purchase of investment obligations by banks is an extension of credit; therefore a loan. Cash — Is the bills and coin bankers keep on hand to issue to depositors, to be used in over-thecounter purchases. It has no value until in the hands of a would-be buyer. Rediscount — The buying as a discount of commercial bank investment obligations by Reserve Banks. Acceptable Paper