II

INFLATION AND DEFLATION

87

tion is one which has been inherent in the Statesince Rome discovered it. The creation oflegal tender has been and is a Government’sultimate reserve; and no State or Governmentis likely to decree its own bankruptcy or itsown downfall so long as this instrument stilllies at hand unused.

Besides this, as we shall see below, the bene-fits of a depreciating currency are not restrictedto the Government. Farmers and debtors andall persons liable to pay fixed money dues sharein the advantage. As now in the persons ofbusiness men, so also in former ages theseclasses constituted the active and constructiveelements in the economic scheme. Those secu-lar changes, therefore, which in the past havedepreciated money, assisted the new men andemancipated them from the dead hand; theybenefited new wealth at the expense of old, andarmed enterprise against accumulation. Thetendency of money to depreciate has been inpast times a weighty counterpoise against thecumulative results of compound interest andthe inheritance of fortunes. It has been aloosening influence against the rigid distribu-tion of old-won wealth and the separation ofownership from activity. By this means eachgeneration can disinherit in part its predecessors’heirs; and the project of founding a perpetualfortune must be disappointed in this way, un-less the community with conscious deliberationprovides against it in some other way, moreequitable and more expedient.