MONEY 137 
fice some profits in the interests of the 
community. 
We have learnt that variations take place 
from time to time in the purchasing-power 
of money, owing to the influence of the trade 
cycle. When trade is good prices rise. It 
might be thought that when trade was good 
prices would fall, because when trade is good 
production is stimulated, the output increases, 
and there is more for money to buy. At 
the same time, however, money power 
increases in consequence of an augmented 
rapidity of circulation of money and larger 
issues of credit money, as we have seen, and 
this latter influence more than counteracts 
the former. It is now important to notice 
that the purchasing-power of money alters 
not only cyclically but also independently 
of the state of trade. On the one side the 
value of money is affected by the volume of 
production. Inventions which render pro 
duction easier increase the supply of goods 
and tend to lower prices. On the other side, 
it is affected by supplies of gold and the 
development of banking. New discoveries 
of gold and the introduction of easier methods 
of winning it, by adding to the supplies 
of bullion upon which the quantity of money