Herewith some clarifications for Mohammad Gani and Roger Sandilands. 
 
Mohammad writes: "I am puzzled. Is it possible that real wealth remains  
exactly the same but the supply of fiat money created by banks increase  
so that the financial value of the existing wealth increases? How may I  
be sure that George was mistaken? What happened to the real value and  
nominal value distinction? 
 
In the first place, banks do not create fiat money.  Only the central  
bank does.  It is indeed true that the real value of wealth may remain  
the same whiles the nominal value increases because of the increase of  
currency or an increase in the price level.  Similarly, the real value  
of wealth may remain the same whiles its nominal value decreases because  
the price level has fallen.  But this is besides the point that wealth  
is accumulated "useful things." 
 
Henry George's point was that because financial assets of savers are the  
liabilities of borrowers their increased level does not represent  
increased wealth of the community.  He was not concerned with the  
distinction between real and nominal values.  This is the point I argued  
to be incorrect.  For people to make more savings available to  
borrowers, they first must have earned more income (assuming they have  
all not decided to go on starvation diets).  Furthermore, the borrowers  
may spend the funds to acquire such useful things as cars, houses, plots  
of land, trinkets, violins, etc. 
 
It is also true that increases in the quantity of money (currency) would  
tend to increase the nominal value of financial assets.  But it is not a  
necessary requirement.  Increases in other means of payment or credit  
instruments do make it possible for the value of financial assets to  
increase without an increase in the quantity of money (currency).  Thus,  
the use of credit cards, checkable deposits, bank cards, electronic  
transfers can enable more transactions to take place -- resulting in  
increased income and savings (wealth accumulation) -- without the  
central bank increasing the money supply.  This is what is behind Roger  
Sandilands's point about the changing transactions velocity of money. 
 
Now, Roger wants to dispute my point that the increased value of land is  
a reflection of increased wealth in a community by distinguishing  
between produced and non-produced goods.  But had he attempted to verify  
  my point that "it is not in poor communities that land values are  
high, but in rich -- wealthy -- communities.  The increased land values  
are a reflection of the higher incomes from which the savings  
(non-consumption and cash hoardings) have been spent on acquiring land.  
  Should incomes (and savings) fall in the community, land values also  
will fall," he would have found little puzzle.  Land values are much  
higher in the states of New York and California than in Alabama or South  
Dakota in the USA, higher in the counties around London than some  
obscure corner of southern England, higher in the UK than in Nigeria,  
higher in Canada than in Columbia, etc.  Does Roger dispute this? 
 
Also, Roger misses the point of my clarification with his note that "one  
  person's accumulation of 'wealth' may place the purchase of assets  
increasingly out of the reach of the non-property-owning classes."  
Those who don't own (landed) property are just those who haven't  
acquired enough savings (out of increased incomes) to compete in the  
market place for them.  Let's not confuse the definition of wealth --  
accumulated useful things -- with distributional concerns, useful though  
such concerns may be in some regards. 
 
Finally, my Smithian definition of wealth is not violated by the events  
of the Great Depression, to which Roger refers.  I interpret the  
collapse of confidence in the financial markets and subsequent rush to  
withdraw bank deposits into cash as a contraction of savings, which  
later led to decreased investment, production, and income growth.  The  
increased demand for cash (hoarding) is what led to the decrease in  
money's velocity (k in M = kPy is 1/V in MV = PT or Py). 
 
I hope the above clarifications help.  They also should make the point  
that the definition of wealth has little to do with marginal utility,  
argued by Pat Gunning.  The utility (usefulness) of an item of wealth at  
the margin would only determine how much of it is included in the wealth  
owner's stock of accumuluated useful things. 
 
James Ahiakpor