Let us now imagine some
alteration to take place in the currency, by which it is
depreciated one-half: prices soon adjust themselves to the new
circumstances, and the annuity of the widow, though nominally of
the same amount, will, in reality, purchase only half the
quantity of the necessaries of life which it did before. The
workman who had placed his money in the savings' bank, having
perhaps purchased ten pounds' worth of materials, and expended
ten pounds in labour applied to them, now finds himself, by this
alteration in the currency, possessed nominally of eighty pounds,
but in reality of a sum which will purchase only half the labour
and materials required to finish his machine; and he can neither
complete it, from want of capital, nor dispose of what he has
already done in its unfinished state for the price it has cost
him. In the meantime, the other workman, who had incurred a debt
of a hundred pounds in order to complete the purchase of his
calendering machine, finds that the payments he receives for
calendering, have, like all other prices, doubled, in consequence
of the depreciation of the currency; and he has therefore, in
fact, obtained his machine for one hundred and fifty pounds.
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