THE PRICE OF WHEAT 167 
the lower classes would, @ priori, in the absence of 
counteracting causes, bring about a rise in these. But 
such a rise in the prices of a few commodities would not 
cause a rise in general prices. It may indeed cause them 
to fall, as Professor Fisher has shown in his treatment 
of the problem. 
It was rather the increase in the exchange media of 
all kinds which had the most important influence. 
Progress in metallurgical science has developed gold- 
mining on an unprecedented scale, and the output of gold 
has been largely increased. Moreover, new fields have 
been opened up in North America, South Africa, and 
Western Australia. This increase in the gold supply 
has had a direct influence on the amount of credit money 
in circulation. With the general development of bank- 
ing in the civilised world, the increase in credit instru- 
ments has been enormous—much greater in proportion 
than the increase in money proper—and it is due to 
this increase in the circulating media generally that we 
must look for the most powerful cause of rising prices. 
But not only have the general exchange media increased. 
Modern tendencies also promote much greater velocity 
of circulation. The progress of urbanisation resulting 
in a greater density of population, the growth of know- 
ledge as to banking, the system of shop credits, the 
increase in small deposits, all tend to foster a higher 
velocity of circulation both of money proper and of 
credit instruments. To put the whole position in a few 
words, all the factors on the right hand side of the 
‘‘equation of exchange’’ have increased greatly, while 
the one independent variable on the left hand side has 
also increased, but not to such an extent. The result 
is, therefore, that the other factor of the left hand side, 
the one dependent variable of the equation, has increased, 
that is, prices have risen. 
(ii) Absence of Violent Fluctuations —tThe character- 
istic feature of the price of wheat since 1894 is the 
