188

POLITICAL  ECONOMY

in  gold-using  countries  is  based,  are  bound
to  raise  prices,  other  things  being  equal.
Now  changes  on  the  side  of  demand  and
supply  with  reference  to  gold  are  not  likely
to  occur  together  in  such  a  way  that  the
purchasing-power  of  money  is  unaffected  ;  and
we  actually  find  on  studying  the  figures  which
indicate  the  level  of  prices  that  great  alterations ­
  have  taken  place  from  one  period  to
another  in  the  purchasing-power  of  money.
Roughly  speaking,  prices  fell,  largely  in
consequence  of  the  effects  of  the  industrial
revolution,  throughout  the  first  part  of  the
nineteenth  century.  Afterwards  for  a  few
years  they  kept  moderately  stationary  as
the  new  productive  forces  slackened  off  and
banking  developed  so  that  substitutes  for
coins  were  largely  introduced.  A  rise  in
prices  was  brought  about  by  the  gold  discoveries ­
  in  the  “  ’fifties  ”  ;  and  from  the
early  “  ’seventies  ”  until  nearly  the  close  of
the  nineteenth  century  prices  fell  materially,
partly  in  consequence  of  the  progress  of  the
community  in  the  matter  of  productive
methods,  and  partly  in  consequence  of  the
adoption  of  a  gold  currency  by  many
countries  which  had  previously  used  silver.
Of  late  years  there  has  been  another  change
in  the  value  of  money  :  since  about