Ralph H. Hess[75]: Professor Fisher's formula (MV + M'V' = PT) approximately expresses the mathematical equality of purchase and payment which cannot be questioned. I say _approximately_ because M' (defined by Professor Fisher as "bank deposits subject to check"), if it be made to express an accurate measure of circulating credit, should include not only open bank accounts, but certain other values which constitute _current means of payment_, such as bankers' bills, trade bills, cashiers' checks, and certified checks.... The relation which Professor Taussig has pointed out between M' and T (the _value of negotiable credit_ and the contemporary _volume of trade_) is not only possible, but, in any community of modernized commerce, is actual. Moreover, a knowledge of the process by which commerce is financed by the existing mechanism of discount, loan, deposit, and draft justifies the conclusion that, if the volume of trade (T) be resolved into its factors, namely, _materials of trade_ and their _frequency of exchange_, the latter factor of T is quite commensurate with the velocity of credit (V'). To me it seems incontestable that the volume and velocity of credit currency, as represented by bank deposits and other circulating media, vary directly as the volume and value of the materials of trade in the process of exchange, and are, mathematically speaking, dependent functions thereof. Granting this relation, an analysis of the equation of exchange establishes PT as the major determinant of M'V', and, in so far as paper money may be authorized and issued upon the security of commercial assets, of M. That part of the money in circulation which does not derive its circulating powers from actual and potential commercial values is itself material of barter incorporating so-called intrinsic values. The conclusion is clear that P (price) is independent of all other terms and factors of Professor Fisher's equation, that V and V' are determined by the mechanical circumstances and organization of exchange, and that the value of M and M', taken collectively, is a spontaneous derivative of PT. The fundamental determinants of prices and of "price levels," therefore, are to be found outside of monetary and credit agencies _per se_.