It therefore generally is true that the importance of money as the standard of deferred payments increases with the use of money as a medium of trade.

The volume of outstanding debts expressed in terms of money now very greatly exceeds the total value of the circulating medium.

Changes in the general level of prices have, therefore, great effects upon all existing debts.

The value of all debts changes in the same proportion as does that of the standard unit of money; when this rises or falls in value, it means increase or reduction, in the same ratio, of the purchasing power of every creditor.

It is as if he had in his possession metal dollars equal in amount to the face of the debt, and they had changed by so much in purchasing power.