We now pass from the pure theory of money and a qualitative study of the characteristics of a system of representative money to the applied theory and a quantitative study of the facts as they exist in the leading monetary systems of today, chiefly in Great Britain and in the United States.

The plan of this volume is as follows.

In Book v we shall treat of the monetary factors and their statistical fluctuations, such as the proportions in which the aggregate of bank money is divided between savings deposits and cash deposits, the velocity of circulation of bank money, and the causes which make this aggregate of bank money to be what it is. The somewhat detailed character of these chapters is essential to enable us to judge of the relative quantitative importance of different factors. For, when the aggregate of bank money has been determined, the statistics of the savings deposits are the most important indication as to how much of this aggregate is being employed in the financial circulation and how much is left for the industrial circulation; and given the volume of the industrial circulation, the velocities of circulation determine, broadly speaking, what level of output and incomes this is capable of supporting.

In Book VI we turn aside from what might be called ‘influences on the side of money’ to ‘influences on the side of investment’, examining the causes of fluctuations in the rate of investment and illustrating the argument of this and the preceding books by analysing what happened on several typical occasions in recent history.