ABSTRACT
The circulation process takes the form: Commodity-Money-Commodity. In this process the social exchange of goods is completed. The essential purpose of the process is the satisfaction of individual wants through general exchange of commodities. A commodity is exchanged for another of equal value. While commodities are continuously disappearing from circulation, money continues to circulate without interruption. Money can be dispensed with as an expression of equivalence. But it is indispensable as a symbol of value because it is a necessary means of giving society's sanction to the value of a commodity. The issue of legal tender paper money is a well-known and frequently used means for the state to meet its debts when no other means are available. Under a system of pure paper currency given a constant velocity of circulation, the sum of prices denoted by the paper money varies directly with the sum of commodity prices and inversely with the quantity of paper money issued.
