Page:Indian Journal of Economics Volume 2.djvu/63

 to the original capital cost, (5) the current rate of interest for long investments. Should the rise of prices or of the rate of interest be proved by-calcu- lation to have made the work unprofitable, it be well to investigate the possibilities of temporary construction with the service at once and replacing permanent work at a suitable conjunction of low prices and interest. In deciding when to make tie replacement it would not be good policy to ass.ume that the would cheap object o! giving the the temporary by s temporary structure must, to justify its cost, remain in use for a certain minimum life. The opportunity o! putting in a permanent structure at lowest cost might thereby be lost. I am assuming a great difference of cost between the temporary and permanent strue- approaches anything like latter it will have to be tures; but if the former one-half the cost of the allowed a minimum life. Turning to the other case in which the expenditure almost entirely in obtained locally, it always in respect of may be' favor of on the work will be labor and of material observed that the chances are delay meaning higher wages rates and increased cost; so that if-the rate of interest is favorable for borrow- ing, or funds are in hand, construction may as well go forward as fast as the labor supply and engineer- ing conditions permit. The continuance during the war .of constructive work on the buildings of the new capital at Delhi is amply justified on this ground, as well as for the object of keeping the staff of skilled workmen together. Finally it is fluctuations of trade should time of commencement of necessary to inquire how the cyclical influence the policy of works. When trade is "sound" and active, and prices hae begun steadily rising, it may be assumed that a boom of trade is approaching