“SCARCITY OF COMMODITIES” 8g 
and substitutes a penalty : if the issue is depreciated 
60 per cent. he will, to adapt a famous phrase, have 
to pay tenpence for fourpence. Of course, he will 
not do it, and consequently the increase of the 
currenc is stopped and this maintains its value. 
Scarcit+ of commodities” as a cause of high 
§ 5 
During the war and afterwards, when a currency 
began to depreciate, it was often said that the cause 
of the rise of prices was a growing scarcity of com- 
modities. This was supposed to be an argument in 
favour of increasing the currency, though it is diffi- 
cult to see how any sane person could believe that the 
fact that commodities had declined in quantity was 
a reason for making that decline greater in proportion 
to currency by increasing the quantity of currency. 
If there is a desire to keep prices stable, it would seem 
much more reasonable to reduce the currency when 
there is a decline in the quantity of commodities. If 
the value relationship between currency and other 
things is upset by a decline in the quantity of other 
things, it certainly will not be restored by increasing 
the quantity of currency. 
But though the importance of changes in the 
amount of commodities available was obviously no 
argument for increasing currencies, it is worth while 
to ask whether in treating of the causes of the rise 
and fall of prices in general, we do not require to take 
more account of such changes than has been taken in 
the earlier part of this book. 
It may be argued that as the value of everything 
is reckoned by the quantity of other things for which 
it exchanges, the quantity available of all such things 
is just as important as the quantity of the thing itself. 
Iron or wheat, while remaining available in the same 
quantity as before, mav rise in value because other