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ESSAYS IN PERSUASION

PART

tracted their supply of money and have ex-perienced the fruits of Deflation. Others havefollowed inflationary courses more riotouslythan before.

Each process, Inflation and Deflation alike,has inflicted great injuries. Each has an effectin altering the distribution of wealth betweendifferent classes, Inflation in this respect beingthe worse of the two. Each has also an effectin overstimulating or retarding the -productionof wealth, though here Deflation is the moreinjurious. The division of our subject thusindicated is the most convenient for us tofollow,—examining first the effect of changes inthe value of money on the distribution of wealthwith most of our attention on Inflation, andnext their effect on the production of wealthwith most of our attention on Deflation.

(a) changes in the value of money,

AS AFFECTING DISTRIBUTION

(i) The Investing Class

Of the various purposes which money serves,some essentially depend upon the assumptionthat its real value is nearly constant over a periodof time. The chief of these are those con-nected, in a wide sense, with contracts for theinvestment of money. Such contracts—namely,those which provide for the payment of fixedsums of money over a long period of time—arethe characteristic of what it is convenient to call