THE VALUE OF MONEY 305 



Let me summarize very briefly the conclusions 

 derived from a study of these charts. Taking the 

 decade 1850-60 as the dividing-line between the first 

 and latter half of the century, the two periods present 

 the following contrasts : 



(i) The prices of agricultural produce fluctuated 

 violently before 1 850, and attained comparative stability 

 after i860. 



(2) Prices before 1850 were low, and after i860 were 

 high, with a rising tendency. 



(3) Before 1850 prices in different localities fluctuated 

 independently of each other; after i860 they were all 

 linked together, and fluctuated simultaneously. 



The changes in (i) and (3) need no explanation, as 

 they are the natural consequence of improvement in 

 the means of transport, which was, in my opinion, 

 by far the most important economic event of the 

 nineteenth century ; (2) requires a more careful 

 examination. 



The value of money in India, as everywhere, 

 depends upon the supply and demand. By the supply 

 of money is meant the amount of money in the 

 country and the rapidity of circulation ; by demand 

 is meant the number of transactions which have to be 

 effected by means of money. Both supply and demand, 

 therefore, present certain factors which it is impossible 

 to estimate accurately. The rapidity of circulation 

 has probably increased greatly in the course of the 

 last hundred years, but we have no means of gauging 

 it with accuracy. On the other hand, the demand for 

 money has been increased, firstly, by the growth of 

 population and the extension of commerce, of which 

 some estimate can be formed ; and, secondly, by an 

 increase in the use of money, which we have no 

 means of computing. That there has been a great 

 increase in the use of money there can be little doubt. 

 A very large number of the exchanges within a village 

 were in old days effected by means of barter. Rents 



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