I found John Munro's rather exhaustive review of Jim Bolton's book quite 
illuminating but also puzzling in one particular respect: his treatment 
of credit.  Credit, I would contend, is the facility to make a purchase 
without money (cash or currency); it is thus a substitute for money.  
Adam Smith (/WN/, 1: 458) says pretty much the same thing: "...if money 
is wanted [scarce], barter will supply its place, though with a great 
deal of inconveniency.  Buying and selling upon credit, and the 
different dealers compensating their credits with one another, once a 
month or once a year, will supply it with less inconveniency.  A well 
regulated paper money will supply it, not only without any 
inconveniency, but, in some case, with some advantages."  Note that 
paper money was an instrument of credit, "money" is gold or silver in 
this analysis.  This is why I could not understand Munro's criticism of 
Bolton's explanation that credit substituted for money during the 
latter's scarcity (bullion famines).  He writes:

> Bolton obviously does not wish to entertain the Spufford thesis – 
> which necessarily implies a decrease in the income velocity of money – 
> because he seeks to show that an increased use of credit fully offset 
> the bullion famines by increasing either V or M or both.  In this 
> debate, on the role of credit, his chief opponent is Pamela 
> Nightingale (1990, 1997, 2004, 2010), and indeed the two have 
> continued this debate is recent issues of the/ British Numismatic 
> Journal /(2011, 2013).  I continue to support Nightingale.  That might 
> seem obvious for one accused of being a “monetarist,” so that readers 
> of this review must judge for themselves by a careful examination of 
> their respective publications (and the others cited here).  In my 
> view, Bolton fails to refute or contradict Nightingale’s two major 
> propositions.  The first, and most important, is that the supply of 
> credit remained essentially a function of the coined money supply, 
> because most (if not all) credit transactions depended on the use of 
> coin, and especially on the creditor’s confidence of being fully 
> repaid in coin:  so that credit generally expanded with increases in 
> the coined money supply and conversely contracted with any decline in 
> the supply or circulation of coined money, often disproportionately. 
An increase in the use of credit must be coincidental with an increase 
in the velocity of money (V); why should an increase in money's velocity 
also imply an increase in the quantity of money (minted coin/money) 
itself?  And why should the supply of credit -- making it possible for 
people to make purchases without the use of money -- also be a function 
of "the coined money supply"?

-- 
James C.W. Ahiakpor, Ph.D.
Professor
Department of Economics
California State University, East Bay
Hayward, CA 94542

(510) 885-3137 Work
(510) 885-7175 Fax (Not Private)