Page:Indian Journal of Economics Volume 2.djvu/50

 40 STANLEY JBVON$ Thus, (n the whole per[od of 186 years for wh[ch index numbers are available there have been three per(ods of secular rise of prices and two of secular fall besides the initial years which cannot be W[thout attempting to enter fidly [nto the of prcs, classified. causes of progress of these changes, [t civilizat(on seems may be said that the to bring two opposing tendencies to bear upon prices, of which sometimes one and sometimes the other is preponderant. An expansion [n the quantity of currency in circulation relat[vely to popular(on is the normal accompan(ment of increas[ng wealth; and this takes place not only in co(n and paper money, bu also in a far more important way in banker's credit. Go(ng back 100 years in India, or 400 years in England,-we find that prices of home made produce have roughly speak[ng trebled, and tlds must be due ma[nly to the great [ncrease of the circulat.[ng medium. The other secular constant reduction of pr[ce of the of tendency [s towards a all articles (one after other, aga[n and again) through the cheapen[ng the means of transport and the invent[on of far cheaper modes of product[on, and the abol(t(on of cus- toms barriers, monopol[es, etc. But temlorarily wth the reverse effect, demand for tree capital and thus besides quickening the demand for materials and ra[s[ng wages of employees, thus causing a more rap[d c[rcula- tion of existing currency. more nteuse effect of the invention acts st(mulat(ng the creating credit, an even nconvertble notes, and failure of many banks, part of a general con tracton of credit which The French Revolutionary wars and the sibsequent Napoleon[c wars were probably mainly responsible' for the first secular r(se (1789-1809). The wthdrawal of bound to follow the [nfiat[on, and initiated the secular fall, which was continued by the progress of communl. were was Great wars have same klnd.