like that proportion. But in these two countries not only the amounts
of exchanges per capita but the methods of exchange and the rapidity
of the circulation of money differ greatly.[7]

(3) It cannot be applied as a per capita rule to the same country
through a series of years, without taking account of the many changing
factors. It is estimated that in 1800 the money stock was about $5
per capita in the United States, and in 1914 about $35[8], but average
prices have not necessarily changed in the same ratio. In a period of
years a country may change in a multitude of ways, in complexity of
industry, modes of exchange, transportation, wealth, and income. These
changes require, some larger, others smaller, per capita amounts
of money to maintain the same level of prices. For example, the
substitution of cash payments for book-credit in retail trade calls
for a larger per capita stock of money; whereas an increased use of
banks and checking accounts, by economizing the use of money, enables
a smaller amount of money to maintain the same level.[9]

(4) Tho applied originally to standard money, the quantity theory
applies to all other kinds of money circulating side by side and at
a parity of value, so far as these fulfil the definition of money and
are not merely supplementary aids of money. These substitutes for, or
supplements to, money enable each dollar to do more work, to circulate
more rapidly. If the standard money alone were doubled in quantity,
while the various forms of fiduciary money (smaller coins, bank notes,
government notes) remained unchanged, the quantity of money as a whole
would not be doubled. Indeed, in such a case, the method of exchange
would be greatly altered. According to the quantity theory, therefore,
prices would not be expected to double.