Money as a Medium Exchange Barter Trading is too Clumsy Large-Scale Production requires a Medium of Exchange Recognition and measurement of changes in the value of money. Classification of Money Stabilization of the Price Level The Value of Money or General Level of Prices Where The Unit of Account is a Fixed Quantity of Bullion, Uncoined or Coined. The value of money or general level of prices where the unit of account is a coin of which the issue is limited. The value of money or general level of prices where the unit of account is a bank-note or currency note. Causes of Change in the General Price Level Possible Occasions of Inflation Ways of Dealing with Risk: Transfer To Specialists Choice Criteria Under Risk Hedging The origin and the functions of money Money, when its use has grown habitual The early history of money Currency in the hunting state Currency in the pastoral state Articles of ornament as currency Currency in the agriculture state Manufactured and miscellaneous articles as currency The invention of coining Qualities of the material of money Utility and value Protability Indestructibility Homogeneity Divisibility Stability of value Cognisability Legal Tender The Greenbacks - The Fluctuating Premium on Gold The Greenbacks - The Effects of Greenbacks Upon Wages Rent - Urban Rents Rent - Farm Rents Interest and Loan Capital Purchasing Power of the Principal of Loans The Rate of Interest Profits Profits in Agriculture Statistical Evidence Regarding Profits The Production and Consumption of Wealth Production Consumption Cost of the Civil War Greenbacks and Expenditures The Greenbacks and Receipts Contraction and Inflation of the Legal Tenders Passage of the Resumption Act The Struggle for Resumption The Purchasing Power of the Dollar Measurement of Changes in the Purchasing Power of Dollar Results of Changes in the General Price Level Buying Problems of the Consumer What is Good Buying? The Principles of Foreign Exchange The General Price Level Price Policies Price Flexibility Price Leadership Price Discrimination Special Pricing Practices Postage Stamp System Policy Implications

A rapid change in the price level always brings forth a host of socalled explanations. Fisher lists forty-three different reasons assigned in popular discussions for the "high cost of living" at the end of and following the World War I. The "false scents" as he calls them range from monopolies, middlemen, labor unions, the tariff, growth in cities, increased public expenditure, to purchase in package instead of bulk and ordering by telephone instead of in person. As he points out, some of the alleged explanations may have been important factors in raising particular prices but no one of them is adequate to explain the rise in the general scale of prices. It is to monetary causes that we must look for explanation of price movements of the character under discussion. The explanation must lie in a changed relation between society's command over means of payment and the supply of goods offered for sale. The relation between the supply of means of payment and the prices of goods is usually represented by the formula MV + M'V' = PT.M and M' represent respectively the average quantity of money and credit currency in circulation and V and V' their velocity of circulation; P equals the general level of prices and T the volume of trade or goods offered on the market. An increase in MV or M'V', not in response to, or accompanied by, an increase in T will obviously bring an increase in P. A revision of this formula as made recently by certain French economists expresses the fundamental relationships in another way. Their formula is I = PR, I representing money income or purchasing power, R, real income in goods and services, and P, the prices of these goods and services. If I increases not in response to or in proportion to R, P will obviously go up. But how can I, the total of money income or purchasing power, go up except in response to an increase in R? It will be noted that one man's command over goods and services (his purchasing power or potential demand) is presumably identical with the net value of the goods and services he or his capital have helped to make available. Supply of goods in other words constitutes demand for goods and increases pari passu with it. Money income is simply the convenient intermediary that allows us to apportion claims to goods, postpone purchase if we like, and allot our spending power over a variety of goods. It would seem clear that money income or total purchasing power can only increase without an increase in R as a result of some monetary cause, some peculiarity of the operation of our monetary system. MV or M'V' must have increased for reasons other than the increased demands of trade. Such increases are called inflation, resulting as they do in an advancing price level.