[46] [For a method of determining the velocity of the circulation of money, see Appendix A.]
[47] It is important to bear in mind that wherever P is used in this chapter it represents the index number, or scale of prices, at which the trade, T, is conducted.—Editor.
[48] An almost opposite view is that of Laughlin that normal credit cannot affect prices because it is not an offer of standard money and cannot affect the value of the standard which alone determines general prices. See the Principles of Money, New York (Scribner), 1903, p. 97. Both views are inconsistent with that upheld ... [here].
[49] This fact is apparently overlooked by Laughlin when he argues that there is not "any reason for limiting the amount of the deposit currency, or the assumption of an absolute scarcity of specie reserves." See Principles of Money, p. 127.
[50] Interesting changes in the magnitudes of the equation of exchange between 1896 and 1914 are given in the appended diagram, which is taken from a reprint of Professor Fisher's article, The Equation of Exchange for 1914, and the War, the American Economic Review, Vol. V, No. 2, June, 1915.—Editor.
[51] Adapted from Irving Fisher. Recent Changes in Price Levels and Their Causes, Bulletin of the American Economic Association. Fourth Series, No. 2, Papers and Discussions of the Twenty-third Annual Meeting, December, 1910, pp. 43-44.
[52] Irving Fisher, The Purchasing Power of Money, pp. 74-88.
[53] Ibid., pp. 149, 150.
[54] Causes of the Changes in Prices since 1896. Bulletin of the American Economic Association, Fourth Series, No. 2, Papers and Discussions of the Twenty-third Annual Meeting, December, 1910, pp. 27-36.
[55] There is a possible error here of perhaps $500,000,000.