in bad times as well as in good; indeed, of the two, people of slightly-varying and fixed incomes have better means of saving in bad times because prices are lower.  Quiescent trade affords no new securities in which the new saving can be invested, and therefore there comes soon to be an excess of loanable capital.  In a year or two after a crisis credit usually improves, as the remembrance of the disasters which at the crisis impaired credit is becoming fainter and fainter.  Provisions get back to their usual price, or some great industry makes, from some temporary cause, a quick step forward.  At these moments, therefore, the three agencies which, as has been explained, greatly develope trade, combine to develope it simultaneously.

The certain result is a bound of national prosperity; the country leaps forward as if by magic.  But only part of that prosperity has a solid reason.  As far as prosperity is based on a greater quantity of production, and that of the right articlesas far as it is based on the increased rapidity with which commodities of every kind reach those who want themits basis is good.  Human industry is more efficient, and therefore there is more to be divided among mankind.  But in so far as that prosperity is based on a general rise of prices, it is only imaginary.  A general rise of prices is a rise only in name; whatever anyone gains on the article which he has to sell he loses on the articles which he has to buy, and so he is just where he was.  The only real effects of a general rise of prices are these:  first, it straitens people of fixed incomes, who suffer as purchasers, but who have no gain to correspond; and secondly, it gives an extra profit to fixed capital created before the rise happened.  Here the sellers gain, but without any equivalent loss as buyers.  Thirdly, this gain on fixed capital is greatest in what may be called the industrial ‘implements,’ such as coal and iron.  These are wanted in all industries, and in any general increase of prices, they are sure to rise much more than other things.  Everybody wants them; the supply of them cannot be rapidly augmented, and therefore their price rises very quickly.  But to the country as a whole, the general rise of prices is no benefit at all; it is simply a change of nomenclature for an identical relative value in the same commodities.  Nevertheless, most people are happier for it; they think they are getting richer, though they are not.  And as the rise does not happen on all articles at the same moment, but is propagated gradually through society, those to whom it first comes gain really; and as at first every one believes that he will gain when his own article is rising, a buoyant cheerfulness overflows the mercantile world.