#Reserves in member banks.# A fundamental change is made in the rules as to the reserves against deposits that must be maintained by the member banks.

A new distinction is made between time and demand deposits.

Time deposits are defined as those payable after thirty days or subject to not less than thirty days' notice; and demand deposits as those payable within thirty days.

In every case the reserve requirement against time deposits is only 5 per cent.

This gives encouragement to banks to maintain savings departments.
The requirements as to reserves against demand deposits are not uniform, being the lowest for banks in smaller cities (the great majority), larger for banks in the reserve cities, and largest for banks in the three central reserve cities (New York, Chicago, St.
Louis).