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 investment for the development of new or backward countries, chiefly in America. This demand for developmental capital has raised the rate of interest and profits, stimulated a full use of the new potential supply of credit, and has been a principal direct agent in the rise of prices.

The quite recent growth of facilities for credit explains the acceleration of supply of money. But since a large use of credit promotes industry, it might appear that the accelerated supply of money should be attended by a corresponding acceleration of supply of goods. In such an event there could have been no rise of prices.

An investigation into the industrial or goods side of the problem shows, however, that the growth of supply of goods, though doubtless considerable, has been much slower than the growth of credit. This is explained partly by the above-mentioned change of business structure, which has enlarged the proportion of existing wealth available as basis for credit. But other causes have directly assisted to retard production, especially the vast unproductive expenditure of modern states, the increasing