23 
MONEY 
can only speculate, some time must elapse before the 
truth appears, ‘and the mistakes are often mostly in 
one direction so that they do not cancel each other. 
Now the price of a thing at any moment is con- 
stantly influenced by anticipations of what the de- 
mand for and the supply of the thing is going to be 
in the future, and the more durable the thing is, the 
more important are the effects of these anticipations 
likely to be. Thus plums were not a penny cheaper 
in the summer of 1918 because next year’s crop was 
universally expected to be much larger. But when 
any oneis in search of a house, not to rent for a short 
time but to buy for good and all, he finds himself 
met immediately by the owner’s views about the 
demand for and supply of houses next year and 
many years after that. If there is general agreement 
that the demand for houses will 4 good and the 
supply poor for many years, the value of houses will 
be higher than if the contrary is the case, whatever 
the present quantity of houses and whatever the 
present desire of persons for house-room and whatever 
their number and their means to pay for what they 
desire may be. It is just the same with gold as with 
houses, except that there is perhaps a little more 
probability of general error in one direction or the 
other in consequence of the widespread impression 
that gold is invariable in value. In considering 
whether to buy iron or any non-precious metal, and 
even a precious metal which is not the standard 
metal, men think of the future demand for and supply 
of that particular metal, because they think that 
these factors will settle its future price : but they will 
think nothing about the future value of the gold they 
are going to give for the iron. Estimates of the 
future value of gold, if made at all, are made quite 
unconsciously in the estimates which are formed of 
the likelihood of a general rise or fall of prices. If