The formula which includes credit is as follows: MV + M'V' = PT Here, MV and PT have the same significance as before. M' is the average amount of bank-deposits in the given region for the given period, and V' is the velocity of circulation of those deposits. M, money, consists of all the media of exchange in circulation which are _generally_ acceptable, as distinguished from those which are acceptable under particular conditions, as by endorsement. M excludes money in bank reserves and government vaults. Money, specifically, includes gold and silver coin, minor coins, government paper money, and bank-notes; M' consists of deposits transferable by check. This version would not satisfy such a writer as Nicholson,[149] who would limit money to gold coin, and would include in M' not only deposits, but also bank-notes, and other credit instruments. I may suggest here, what I shall later emphasize, that Fisher's "money," though he doubtless is using the most common definition of money, is really a pretty heterogeneous group of things, concerning which it is possible to make few general statements safely. In economic essence, _e. g._, bank-notes are much more like deposits than like gold, and if one wishes to separate money and credit, bank-notes belong with M' rather than with M. But we must take the theory as we find it! Again, credit is by no means exhausted when bank-deposits are named. Why should not book-credits, and bills of exchange be included? Why not postal money-orders, why not deposits subject to transfer by the giro-system? M' is defined[150] as "the total deposits subject to transfer by check," and would, thus, exclude the giro-system of Germany. It is surely a very provincial equation of exchange, with which Fisher and Kemmerer seek to set forth the universal laws of money! Fisher's reason for excluding book-credits is that book-credits merely postpone, and do not dispense with, the use of money and checks.[151] Book-credits, unlike deposits, have no _direct_ effect on prices (_Ibid._, 82, n.; 370), but only an indirect effect, by increasing the velocity of money. (_Ibid._, 81-82; 370-371.) Book-credit, indeed "time-credit" in general thus has no direct effect on prices, and is properly excluded from the equation of exchange. These distinctions seem to me highly artificial. In the first place, the use of checks, in part, merely postpones the use of money: money is moved back and forth from one part of the country to another, and from one bank to another, to the extent that checks fail to offset one another, and in the case of book-credit, while there is less of this offsetting, there is a good deal of it, especially between stockbrokers in different cities, and in small towns and at country stores, and particularly in the South, where the country storekeeper and "factor" are also dealers in cotton, etc., and where they advance provisions during the year to the small farmers, receiving their pay, in considerable degree, not in