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124 ECONOMIC INQUIRIES AND STUDIES
the point now under consideration; and we do not know
that they will be permanent at all when prices and
wages are fully adjusted.
The disturbance to industry by the falI of prices
generally is also a vera causa of a check to the rate of
material growth. But the effect of such a cause seems
to be confined within narrow limits, and it is not a new
cause. I t occurs in every time of depression due to dis-
credit, being partly the effect and partly the calise of
the depression itself. All that is new recently is the
extreme degree of the fall, and I must express the
greatest doubt whether a mere difference of degree
aggravates materially the periodical disturbance of in-
dustry, tending to check production, which a fall of
prices from a high to a low level causes. So far as past
experience has gone, at any rate, no such cause has
been known' to check production to any material ex-
tent. If any such cause tended to have a serious effect
we should witness the results every time there is a
shrinkage of values owing to the contraction and appre-
ciation of an inconvertible paper currency, and I am
not aware of any such contraction having had the effect
described on production, though the effect in producing
a feeling of depression is beyond all question. The
facts as to the great contraction in this country between
1815 and 1820 are on record, while the experience of
the United States after the civil war is also fresh in
everyone's recollection. Contraction of currency and
fall of prices, though they are painful things, do not
stop production materially.
Another explanation suggested is that there is in
fact no antecedent reason for supposing that the rate
of material growth in a community should always be
at the same rate-that a community may, as it were,
get "to the top" as regards its development under
given conditions, and then its advance should be either
less rapid than it had been or it should even become
stationary. The defect of this explanation is that it
assumes the very thing which would have to be proved.