[286] A recent discussion of these problems is to be found in Shaw, A. W., Some Problems in Market Distribution, Harvard Univ. Press, 1915.

[287] Op. cit., pp. 51-52.

[288] London, Paris, and New York all do a great deal of manufacturing, particularly of finer things, whose value is high, and which require a high proportion of labor, as compared with machinery. Cf. our discussion of the London "Money Market," infra, in Part III.

[289] Ibid., p. 47.

[290] Cf. Jenks, The Trust Problem, Rev. ed., p. 29. The doctrine that these costs are net social loss is challenged by the present writer in an article, "Competition vs. Monopoly," in the New York Independent, of Oct., 1912.

[291] "Royal" has been estimated at $5,000,000; "Spearmint" at $100,000,000. Mr. Guy C. Hubbard, of the Dry Goods Economist, New York, has given the writer some exceedingly interesting data regarding the value, as bankable collateral, of various trade-marks and firm names.

[292] Cf. our discussion of "The Reconciliation of Statics and Dynamics," infra.

[293] Significant in this connection, is the contention of recent students of American agriculture, that the great need is better organization and credit, facilities for marketing.

[294] Loc. cit., p. 89. Though Fisher does not conclude that banking is bad, he does conclude that gold mining is a parasitic and socially injurious industry, like the making of burglars' "jimmies." See his Elementary Principles of Economics, N. Y., 1912, pp. 499-500.

[295] Fisher does admit that the character of the banking system, and of the money system, will affect the volume of trade. "There have been times in the history of the world when money was in so uncertain a state that people hesitated to make many contracts because of the lack of knowledge of what would be required of them when the contract should be fulfilled. In the same way, when people cannot depend on the good faith or stability of banks, they will hesitate to use deposits and checks" (78). But there is nowhere an admission that the amount of bank-credit has any influence on the volume of trade, and there are repeated assertions, as already instanced in the text, that the volume of trade is quite independent of the volume of money and bank-credit.

[296] Part IV of this book gives a detailed analysis to the problems involved in these contrasts.

[297] This thesis was set forth by the present writer at the 1915 meeting of the American Economic Association. See Papers and Proceedings, Supplement to March, 1916, Amer. Econ. Rev., pp. 168-169.

[298] Cf. J. B. Clark, Distribution of Wealth, passim, and J. Schumpeter, Theorie der wirtschaftlichen Entwicklung, pp. 1-101. See also the present writer's "Schumpeter's Dynamic Economics," Pol. Sci. Quart., Dec, 1915, and A. S. Johnson, in Quart. Jour. of Econ., May, 1914.

[299] Principles, Bk. III, ch. xviii, par. 1.

[300] Theorie der wirtschaftlichen Entwicklung, p. 77. Since the foregoing was written, Professor W. C. Mitchell has presented an admirable historical paper on "The Rôle of Money in Economic Theory," in which he has multiplied instances, in the history of the science, of this contempt for money, or abstraction from money, in economic theory. He finds that Marshall, and some other later writers, have given much fuller recognition to the rôle of money, which he conceives of primarily as an institution which has rationalized economic behavior, by forcing upon the individual bookkeeping habits of thought. This still leaves it legitimate to abstract from money, however, for "pure theory." Highly important as is the "measure of values" function, it does not explain the main work which money, as money, actually does in economic life, nor need it be a source of value for money. Cf., infra, our chapter on "The Functions of Money." Professor Mitchell's paper will be found in "Papers and Proceedings," Supplement to the March, 1916, number of the Am. Econ. Rev.

[301] The materials in this appendix are taken from an article published in the Annalist of Jan. 8, 1917, pp. 39, 53-54, and the New York Times Annual Financial Review of Dec. 31, 1916, and are reprinted by the courtesy of the New York Times Company.

[302] Vide Annalist, Feb. 7, 1916, pp. 183-184, and Feb. 21, 1916, p. 246.

[303] Wealth and Income of the People of the United States, p. 129.

[304] The justification of this procedure is argued more fully in my article in the Annalist of Feb. 7, 1916, above referred to.

[305] The figures for railway gross receipts are taken from the Commercial and Financial Chronicle, rather than from Government reports, in order to get figures for calendar rather than fiscal years, and in order to get the latest possible figures. As the absolute figures are not strictly comparable throughout, the method employed has been to calculate percentage gains or losses for the same roads for successive years. This would lead to a cumulative error, if large new roads had been built during the period, and had retained their independence. In point of fact, however, the curves for the absolute figures and for the percentage changes run pretty closely parallel down to 1909, at which time a large number of small roads, not previously counted, are brought into the figures. As the number of roads reported varies, the percentage changes on the same roads give us the more accurate measure of year by year variation. It is, at the date of writing (December, 1916), the only possible method for 1916, since the Chronicle figures which come to the end of November are based on only 37 roads, with a mileage of 84,452 out of over 240,000 miles usually reported. For these roads, a gain of 19.63%, for the first eleven months of 1916 over the same months in 1915, is reported, and our figures for 1916 rest on the assumption that the gain for the whole year over 1915 is 17.27%. (The greatest gains are for the earlier months, as the end of 1915 was a period of great activity.) Much fuller figures supplied me by Mr. Osmund Phillips, of the New York Times, for the first ten months of 1915 and 1916 serve to justify this estimate for the gain of 1916 over 1915. For the Chronicle data, see vol. 102, p. 930, vol. 103, p. 2112, and passim.

The index of prices chosen is Dun's. (See especially Dun's Review of May 11, 1907, Jan. 9, 1915, and later months, and the discussion of Dun's index number in the Bulletin of the United States Bureau of Labor Statistics, Whole Number 173, July, 1915, pp. 148 et seq.) Dun's index number is chosen partly because it is complete for 1916, and partly because it is weighted in accordance with the consumption of different classes of goods, and so particularly suited to this inquiry. I venture to express strong preference for rationally weighted index numbers, and for the use of different index numbers for different purposes. (Vide the discussion of index numbers in ch. 19.) Our price index for each year is an average of the twelve monthly figures given by Dun from 1894 to 1916. For the years 1890-94, our price index is an average of the figures for January and July. This average is lower, in most years, than the average for the whole year, and may well be lower than the average for these years, but no attempt has been made to rectify this possible source of error. The index is recalculated from Dun's figures (where it is not a percentage, but a sum of prices), and made a true percentage index, with a base in 1910.

The figures for exports and imports are for calendar years. They were obtained, for the years 1890-1909, from Statistics of the United States, 1867-1909 (National Monetary Commission Report), and, for the years since 1909 from the Commercial and Financial Chronicle. For 1916, November and December are estimated.

[306] Their indicia of variation for "trade," though failing to meet the problems for which they were designed, as shown in chs. 13 and 19, are good indicia of variation for physical production and consumption.

[307] That this should have been seriously denied during the recent Presidential campaign, on the basis of the estimate that foreign trade is minute as compared with domestic trade, gives special point to the present discussion.

[308] King's figures, for which he estimates a margin of error of 25% are used for these years. (Loc. cit., p. 129.) The export and import figures used are for fiscal years.

[309] Probably the apparent moderate increase in imports is due wholly to higher prices. The actual physical volume has possibly been reduced, as compared with the period before the War.

[310] I am indebted to several colleagues for advice and criticism in connection with these tables, particularly Professors Taussig and W. M. Persons. Mr. N. J. Silberling has been particularly helpful, aiding in the choice of the statistical sources, suggesting methods of handling and interpreting them, and making virtually all the computations in the tables.

[311] Retail prices of exports and imports are obtained by adding 50% to the wholesale figures reported, on the assumption that wholesale prices are two-thirds of retail prices. The percentages in the final column are obtained by dividing the figures for foreign trade by the figures for domestic trade. The percentage would reach 100 when foreign trade becomes equal to domestic trade.

[312] The figures in column 4 are obtained for any year, say 1905, by taking the index in column 3 for 1905, the index in column 3 for 1910, and the absolute figure in column 4 for 1910, and solving by the "rule of three."

[313] The notion of interdependence need not involve circular reasoning, if the facts really justify it. The whole cosmos is, doubtless, interdependent. Often certain systems within the cosmos manifest enough independence of the rest of the universe to justify us, for some purposes, in thinking only of interrelations within the systems. The important thing is to make the circle in theory as big as the circle in fact. Cf. Social Value, p. 152, n.

[314] In chapter XVI.

[315] Cf. our chapter, infra, on "The Quantity Theory and International Gold Movements."

[316] Italics mine.

[317] Loc. cit., p. 165.

[318] The resemblance of the view here maintained to that of Professor Laughlin is at many points close. I am indebted to his Principles of Money for many suggestions.

[319] Loc. cit., p. 165, n. The doctrine is reiterated on p. 168.

[320] This is strikingly true in the stock market—the place where more trade takes place than in any other market. See the figures in the preceding chapter with reference to stock transactions, and the chapter on "Bank Assets and Bank Reserves."

[321] For a history of this debate, with bibliography, see Laughlin's Principles of Money, ch. 7, on the "History and Literature of the Quantity Theory," esp. pp. 260 and 263-264. Laughlin shows the connection of the currency principle and the quantity theory.

[322] It may be that in the brief discussion of elastic bank-notes on p. 173 (loc. cit.), Fisher means to given an explanation of the theory of elasticity from a quantity theory standpoint. The statement there is that money not only tends to flow away from places where prices are high, but also from times when money is high. "If the price-level is high in January as compared with the rest of the year, bank-notes will not tend to be issued in large quantities then. On the contrary, people will seek to avoid paying money at high prices and wait till prices are lower. When that time comes they may need more currency; bank-notes and deposits may then expand to meet the excessive demand for loans which may ensue. Thus currency expands when prices are low and contracts when prices are high, and such expansions and contractions tend to lower the high prices and to raise the low prices, thus working toward mutual equality."

If this be the quantity theory account of elasticity—and it would seem to be about the only thing the quantity theory could say—it is about as far from giving an account of the real facts as any theory could be! Something of this sort is suggested, perhaps, by the behavior of Canadian bank-notes, which do expand in the fall, when prices of wheat are lowest, and contract in January, when wheat prices are higher. This grows, however, out of the peculiarities of an agricultural country, and does not at all illustrate the general doctrine maintained. First, wheat prices in the fall are low because wheat is most abundant then. Wheat prices in January, under the influence of speculation, commonly differ from wheat prices in the fall by an amount about equal to the elevator charges, rattage, insurance, interest, and other carrying charges involved. Second, wheat prices are only one element in the general price-level. Low wheat does not prove that the level is necessarily low. A good wheat crop may mean increases in general prices, and often does. Third, and more important, the real reason for an expansion in Canadian notes at such a time is that the wheat has to be moved. The farmers do not want to carry it; the speculators are ready to carry it; and it must be sold. Expanding trade, at the season, is the cause of expanding bank-notes. The influence of the price of wheat is exactly the reverse of that which Fisher assigns. If the price of wheat is low in the crop-moving season, less notes will be issued than if the price is high. In other words, the greater the increase in PT, not P or T alone, the greater will be the expansion of bank-notes. Decrease either P or T, and less notes will be issued.

In general, the phenomenon of elastic bank-credit is the phenomenon of an expanding bank-note or deposit issue accompanied by rising prices and volume of trade, and a decrease when trade and prices decrease. This is all commonplace, but I feel it best to refer to familiar sources to show how old and well recognized my statement of the case is. The following is from Mill's Principles of Economics, Bk. III, ch. 24, par. 1: "Not only has this fixed idea of the currency as the prime agent in the fluctuations of price made them shut their eyes to the multitude of circumstances which, by influencing the expectations of supply, are the true causes of almost all speculations and of almost all fluctuations of price; but in order to bring about the chronological agreement required by their theory, between the variations of bank issues and those of prices, they have played such fantastic tricks with facts and dates as would be thought incredible, if an eminent practical authority had not taken the trouble of meeting them, on the ground of mere history, with an elaborate exposure. I refer, as all conversant with the subject must be aware, to Mr. Tooke's History of Prices. The result of Mr. Tooke's investigations was thus stated by himself, in his examination before the Commons Committee on the Bank Charter question in 1832; and the evidences of it stand recorded in his book: 'In point of fact, and historically, as far as my researches have gone, in every signal instance of a rise or fall of prices, the rise or fall has preceded, and therefore could not be the effect of, an enlargement or contraction of the bank circulation.'"

I see nothing in Fisher's discussion of credit to differentiate it from the position of the old Currency School. And the reason is a very simple one: Fisher has followed the quantity theory to its logical conclusions!

[323] See our chapter on the "Volume of Money and the Volume of Credit."

[324] How close the relation between loans and deposits is may be seen from Professor Mitchell's chart, Business Cycles, p. 344. The same chart exhibits the variations in the reserve percentage, which is very much greater. The New York Clearing House banks, which we have seen (supra, "Volume of Money and Volume of Credit") have a spread of from 24.89% to 37.59% in the yearly average of percentage of reserves to deposits—a spread of over 50%—show a variation in yearly average for the percentage of loans to deposits of only 24.3%—the range being from 83% to 104%. Ibid., pp. 325 and 331. For a partially different series of years, see the chart of J. P. Norton, Statistical Studies in the New York Money Market, facing p. 104.

[325] Neither deposits nor loans vary proportionately with trade. Very active trade may merely increase the activity of loans and deposits, causing both to be shifted more rapidly—larger outgo, larger income, loans more frequently contracted and paid off, larger amounts "deposited" on a given day, but balances, both of loans and deposits, at the end of the day not increased proportionately with the activity. This is strikingly illustrated in the business of the stockbroker.

[326] Supra, p. 47.

[327] Italics mine.

[328] "Miscellaneous Articles on German Banking," in Report of Nat. Mon. Commission, p. 175. Art. by Max Wittner and Siegfried Wolff.

[329] The figures are not easily compared, as the figures for giro-transfers do not indicate the volume of giro-accounts, which is doubtless much smaller. I know no estimates for the turnover either of notes or of bills of exchange. To determine what proportion of business is done by each would, thus, not be easy. The volume of bills of exchange for the year is three times as great, for 1907, as the figures for note issue. The giro-system, as is well known, is relatively unimportant as compared with notes. But I do not undertake to assign figures showing proportions of business done.

[330] Inland bills of exchanges in connection with the grain trade are still very important, especially at Chicago and Minneapolis. The writer has met frequent reference to cotton bills at St. Louis. Wool bills are frequent in Boston.

[331] Vide my criticism of his statistical fallacy in this connection, in the Annalist of Feb. 7, 1916. He rules out foreign trade from his "equation of exchange" by the device of assuming that imports and exports cancel one another. This, however, to the extent that it is true, makes the bill of exchange more, rather than less, important as a substitute for money and deposits. Fisher, loc. cit., pp. 306, and 374-375. See appendix to chapter XIII of the present book.

[332] Vide ch. 16 for a more precise statement of this part of quantity theory doctrine.

[333] Purchasing Power of Money, pp. 169-170.

[334] Ibid., p. 170.

[335] Ibid., p. 171.

[336] Ibid., p. 172.

[337] Ibid., p. 172. Italics mine.

[338] Ibid., pp. 174-181.

[339] I call attention, in passing, to Fisher's confusion, in this sentence, of "commodities" with "trade." This occurs frequently in his argument. Cf. pp. 225-226, supra.

[340] The Capitalization theory is briefly outlined by Böhm-Bawerk, in the critical and historical volume of his Kapital und Kapitalzins (English title of the volume, Capital and Interest), in his criticisms of the theories of Henry George and Turgot. It has subsequently been elaborated, and much improved, by Fetter, in his Principles of Economics, and, more recently, has been restated, with mathematical formulæ, by Fisher, in his Rate of Interest. A good brief statement will be found in Seligman, Principles of Economics, ch. on "The Capitalization of Value." Extensive use has been made of it by Veblen. More recently, it has been elaborated in the controversy over the theory of interest participated in by Seager, Fisher, Brown and Fetter, in the American Economic Review, 1912-13-14, and the Quarterly Journal of Economics, 1913.

[341] Italics mine.

[342] The criticisms I should make of the present formulations of the time-preference theory of interest, as presented by Böhm-Bawerk, Fetter and Fisher, rest on the individualistic method of approach, and are at many points analogous to the criticisms I have made of the utility theory of value. These criticisms need not affect the points at issue here. On the particular point involved, I agree with Fisher that the productivity theory gives a wrong answer.

[343] E. g., Fisher, Purchasing Power of Money, p. 179.

[344] This confusion is a companion of the confusion between volume of goods in existence, or volume of production, and volume of goods exchanged. The errors growing out of this confusion have been dealt with in ch. 13, especially pp. 225-226. Virtually all quantity theorists make both these mistakes.

[345] The fundamental causation is psychological, and calls for a theory of value, as distinguished from exchange-relations.

[346] Supra, chapter on "Velocity of Circulation."

[347] This distinction is clearly made and developed by von Wieser, in the two articles referred to in our chapter on "Marginal Utility." It is used by him in criticisms of the quantity theory. "Der Geldwert und seine geschichtlichen Veränderungen," Zeitsch. für Volkswirtschaft, Sozialpolitik und Verwaltung, XIII, 1904; discussions in Schriften des Vereins für Sozialpolitik, 1009, no. 132. A similar distinction runs through J. A. Hobson's Gold, Prices and Wages, London, 1913. The present writer had worked out the line of argument here presented before reading either of these discussions.

[348] I have chosen maid-servants, to avoid complications of costs of production in the reasoning that might come if other labor, engaged in producing goods for the market, were selected. To tighten the argument a tittle further, I assume that the masters receive their monthly incomes on the first day of the month; that they pay the maids on the same day; that the rest of the expenditures, both of masters and maids, are strung out through the rest of the month.

[349] Op. cit., p. 27.

[350] A possible alternative interpretation of Professor Fisher's conception is suggested in two or three sentences in the passage of the Purchasing Power of Money I have been discussing. On p. 175 he makes a distinction between individual prices relatively to each other and the price-level. But the distinction which he discusses in the passage as a whole is between the price-level and individual prices not considered in relation to each other. Comparison, moreover, with his original enunciation of the notion (Papers and Discussions, 23d Annual Meeting of the American Economic Association, pp. 36-37), would serve to justify the interpretation I give, as nothing at all is said there about super-ratios between individual prices. But the internal evidence is even more convincing. Demand and supply, and cost of production, find their problem, not in the relation between the money price of aspirin and the money price of caviar, but in the money-price of aspirin or the money-price of caviar considered separately. Professor Fisher thus conceives supply and demand in his Elementary Principles (p. 260). This interpretation is especially necessary, since Professor Fisher is joining issue with writers who surely use demand and supply and cost of production as means of explaining money-prices, and not super-ratios between them. Further, the price-level is not, on Professor Fisher's own scheme, a factor in determining the relations of the prices of sugar and of wheat inter se. With a given price-level, wheat might be worth a dollar and sugar nine cents, and the ratio of their money equivalents would be 100:9; with a price-level twice as high, wheat would be worth two dollars, and sugar eighteen cents, but the ratio between their money equivalents would be still 100:9. The whole discussion is quite meaningless unless the contrast be between concrete money-prices of particular goods, and their average. On either interpretation, moreover, my criticism of the exalting of the average into an entity would stand.

[351] Purchasing Power of Money, pp. 175-179.

[352] I am glad to find myself in agreement with Professors Laughlin and Kemmerer in holding that this notion of Professor Fisher's is untenable. "The distinction Professor Fisher draws between the prices of individual commodities and the general price-level appears to me, as to Professor Laughlin, to be untenable. It is, moreover, contradictory to his general philosophy of money. His index numbers recognize no general price-level distinct from individual prices.... Professor Fisher's illustration of the ocean would be more apposite if he called it a lake whose level was continually changing, and if he considered each particular wave as extending to the bottom." Kemmerer, Papers and Discussions, 23d Annual Meeting of the American Economic Association, p. 53. At the same time, I agree with Professor Fisher that there must be something more fundamental than the particular prices to make the scheme work. This something I find in the absolute value of money.

[353] Loc. cit., p. 14.

[354] Cf. Social Value, chs. 2 and 11, and "The Concept of Value Further Considered," Quart. Jour. of Econ., Aug., 1915. See also, supra, the chs. on "Value," "Supply and Demand," "Cost of Production," and "Capitalization."

[355] This tendency may be more than offset by the increasing significance of money as a "bearer of options" or "store of value" in periods of panic and depression. See, infra, the chapter on "The Functions of Money," and Davenport, Economics of Enterprise, pp. 301-03.

[356] "Agricultural Credit in the United States," Quart. Jour. of Econ., Aug., 1914, p. 708, n.

[357] Iowa farm lands are exceedingly active, 18% of the farms being sold annually. The Mississippi lands are much less active. I am indebted to Dr. Pope for information regarding Iowa on this point.

[358] The Single Taxer could at least retort that this need not protect landlords in countries, like England, which lend surplus capital abroad.

[359] Cf. Trosien, Der landwirtschaftliche Kredit und seine durchgreifende Verbesserung, p. 29, cited by J. E. Pope, loc. cit., p. 705, n.

[360] This was seen by Mill, (Principles, Bk. III, ch. viii, par. 4), and has been especially emphasized by Laughlin, Principles of Money, ch. 10. Cf. A. C. Whitaker's discussion in the Quart. Jour. of Econ., Feb. 1904.

[361] Supra, p. 124, and ch. on "Dodo-Bones."

[362] Comptroller of the Currency estimates the State bank-notes in 1861 at 202 millions; in 1862, at 183 millions. Report of the Comptroller of the Currency, 1915, vol. II, p. 37.

[363] W. C. Mitchell, History of the Greenbacks, ch. on "The Circulating Medium," and passim.

[364] See Conant, Modern Banks of Issue, New York, 1896, p. 114. An interesting analysis of the course of the gold premium and of prices during the period of the Bank Restriction in England, and of the controversies relating thereto, will be found in Knies, Der Credit (vol. II of Geld und Credit), pp. 247 et seq. The same period is studied in detail by Thos. Tooke in his History of Prices.

[365] Money and Monetary Problems, p. 105, and preceding.

[366] Nicholson, loc. cit., 84ff.

[367] Ibid., 76ff.

[368] Cf. Laughlin, J. L., Principles of Money, and Scott, W. A., Money and Banking.

[369] Cf. infra, our discussion of credit. It is not maintained that credit needs to be based on physical goods, but it is maintained that credit is based on values, which are generally not the value of a sum of gold.

[370] I have elaborated this notion in a hypothetical case in the chapter on "Dodo-Bones," to which I would now refer. See also the analysis of an "ideal credit economy" in the discussion of reserves in the section on Credit, in Part III.

[371] Infra, the discussion of reserves in Part III.

[372] Cf. the chapter on "The Origin of Money," infra.

[373] See especially History of the Greenbacks, pp. 188ff.; 207-208; 275-279.

[374] Various efforts have been made by adherents of the quantity theory to meet the facts developed by Mitchell with reference to the Greenbacks. Thus, it has been suggested that the coming to par of the Greenbacks shortly before the resumption of specie payments was an accidental coincidence, due to the fact that the volume of trade in the United States just happened to grow to the right amount to bring the Greenbacks to par at that time. No statistical evidence has been offered for this thesis, I believe. It is, indeed, the only logical thing which a quantity theorist could say on the matter, except one alternative, (F. R. Clow, J. P. E., vol. II, p. 597) namely, that if the Greenbacks should exist in such quantity that, under the quantity theory, their value ought to fall below the discounted future value of the gold in which they were to be redeemed, speculators would take them out of circulation, holding them for the interest, and so reduce their quantity that the value would rise to that discounted future value. The first thesis, that based on putative changes in the volume of trade, though highly improbable in fact, is logically possible. The second thesis, however (Purchasing Power of Money, p. 261) meets serious difficulties. What motive would a speculator have for taking the Greenbacks out of circulation, and hoarding them? The answer is, he gets thereby the "interest," as the Greenbacks approach the date for redemption in gold. If this were the only way in which he could get this gain, the answer would be good. But there is another way in which he can get it, and something more besides, namely, by lending out his Greenbacks. In that case, since the creditor gets the full benefit of an appreciating standard of deferred payments, he would get all the "interest" which he could get by hoarding, and, in addition, he would get contract interest on his loan. Of course, if the principle of "appreciation and interest" worked out with perfect smoothness, he would find his contract interest reduced as the other rose, and one might even expect, if the Greenbacks were very redundant, that contract interest would disappear. There is no evidence that this did happen, however! And so long as any contract interest existed, we have a thoroughly valid reason why a holder of Greenbacks would lend them rather than hoard them.

Another effort to harmonize the facts with the theory consists in the contention that anticipated future increases in the Greenbacks would work in the same way as actual increases. But this is to shift the whole basis of the quantity theory, which rests in the notion of a mechanical and—in the mass—unconscious equilibration of quantity of money and number of exchanges. The quantity of money is not increased until it is increased! Cf. Mill, Principles, Bk. III, ch. 12, par. 2, and Jos. F. Johnson, Money and Currency, Rev. ed., p. 235.

Professor Fisher has another way to meet the facts of the Greenback régime, and that is by holding that they prove his case! I do not think that anyone, however, who examines the figures he offers on p. 260 (loc. cit.) will be impressed by the degree of concomitance between money and prices which they exhibit, especially after Mitchell's careful analysis of changes in detail.

At another point, Professor Fisher maintains (p. 263) that the rapid changes in gold premium which came with news from the military operations (e. g., the 4% drop in Greenbacks after Chickamauga), were due to alterations in velocity of circulation and in volume of trade! As the gold market usually got the news by wire, before the newspapers got it, however, this thesis is not very convincing.