[Footnote 11: This could not be treated in connection with the interest-rate in Vol. I, Part IV, for the reason that even its elementary treatment must presuppose the fuller study of the nature of money and the study of changes in the level of prices, that has just been given in this and the three preceding chapters. The theory of interest in Vol. I, therefore, is a static theory in respect to the standard of deferred payments, and requires adjustment to apply to a condition of a changing price-level.] [Footnote 12: See above, sec. 3.] [Footnote 13: Mention was made in Vol. I of the prospect of profit as affecting the motives of commercial borrowers; e.g., pp. 298, 335, 348, 495.] [Footnote 14: The modern explanation of this phenomenon was worked out in the period of falling prices before 1896 and hence was referred to as the theory of "appreciation and interest" (meaning the relation of the appreciating dollar to a falling rate of interest). More generally the theory is that of the relation of a changing standard of deferred payments and the rate of interest.] [Footnote 15: See ch. 4, sec. 12, and above secs. 1, 2, 4, 5.] [Footnote 16: See Vol. I, on agricultural leases, p. 159, wheat prices, p. 436, and changes in the land supply, p. 442.] [Footnote 17: See ch. 5, sec. 11.] [Footnote 18: The advocacy of this proposal was called "the free-silver movement" because it involved resuming the free coinage of silver at the legal ratio of 16 to 1.] [Footnote 19: This happened to coincide with a relative increase of the price of food-products and of other necessities of daily life at a greater rate than general prices. This aspect of the much discussed rising cost of living must be carefully distinguished from that of the change of the _general_ price level, and also from that of the relatively slower change of wages. See Vol. I, pp. 437, 445-446 on population and food supply.] [Footnote 20: See on the labor theory of value, Vol. I, pp. 210, 228-229, 502.] PART III BANKING AND INSURANCE CHAPTER 7 THE FUNCTIONS OF BANKS § 1. Nature and classes of banks. § 2. Functions of banks. § 3. The essential banking function. § 4. Time deposits. § 5. Demand deposits. § 6. Discount and deposit. § 7. Nature of banking reserves. § 8. Bills of exchange, domestic. § 9. Issue of notes. § 10. Divergent views of typical bank notes. § 11. Banking credit as a medium of trade. § 12. Productive services of banks. § 13. Income of banks.