Page:Indian Journal of Economics Volume 2.djvu/62

 H. fl. tVON$ because he public body is unable o make any such forecas and hesitates to "cu is loss ". The correc policy obviously is to be continually making forecasts whils works are projected, and o hasten or retard puing construction in hand solely on he indication of the best forecas available at the time. There might be justification in waiting for a better forecast, as, for instance, by waiting for the world's harvests be approximately known; but this is a blind postponement in the hope of of the year to very different to circumstances changing. The' policy in regard without taking work either in to the country.  to time of commencement of works, and their several parts, in relation to prices and wages, will depend upon a differentiation between works requiring expenditure mainly on manufactured materials, especially such as are commonly imported, and works on which the expenditure is mainly for wages. As regards the former class the tendency of policy in a time of high prices like the present will be for postponenent; but no decision should be made into account the profitablehess of the direct revenue or in indirect benefit A work calculated to yield 40 per cent per annum on its capital cost t the old prices wonld still yield 17 per cent on its cost when prices of materials forming two-thirds of its total cost at the old prices had on the average trebled, and there would still be a very handsome margin above the rate of interest. The extent to which a rise of prices of materials should be allowed to check new works depends, therefore, on five hings (1) the extent of the rise, 2) its probable duration, (8) the percentage of total cost which these materials represent, (4) the original percentage rate of direct revenue (or better, if possible, of the estimated social income) anticipated  S nuina o#on on I. 7.