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POLITICAL ECONOMY 
time ; and there is no reason to suppose that 
rapidity of circulation will be affected by 
variations in the supply of coins. Moreover, 
it is apparent that the quantity of exchanging 
which each unit of money will effect in any one 
transaction must depend on the quantity of 
exchanging to be done. The agency intended 
to be employed in carrying out exchanges is 
used up, and just used up, in carrying them 
out, owing to competition on the part of 
people possessing money with which they 
intend to make purchases. And the quantity 
of exchanging to be done cannot be altered 
by variations in the extent of the means 
for effecting exchanges. So the purchasing 
power of money must vary inversely and in 
the same proportion as the supply of monetary 
units. This doctrine, it will be observed, 
is implied in our earlier exposition, but 
something is gained by making it explicit. 
Countless illustrations of the truth of the 
quantity theory might be gleaned from the 
pages of history. Prescott, in his History of 
the Conquest of Peru, writes thus of what 
happened after the division of the spoil 
among Pizarro’s followers at Cuzco :—“ The 
effect of such a surfeit of the precious metals 
was instantly felt on prices. The most 
ordinary articles were only to be had for