and that the money used for paying wages and buying commodities is suddenly doubled, is it not evident that under these circumstances prices and wages would go up, or, in other words, that the purchasing power of money would go down? When the islanders tried to use cocoa-nuts for money, this fact was perfectly well understood. Anything that made cocoa-nuts more plentiful, lowered their value and their purchasing power; the average of general prices was controlled by the supply of the circulating medium. In the island the supply of money could not be increased; no more discoveries of chests of gold and silver were made. But the trade and commerce of the island steadily increased, more commodities were produced, and bought and sold; and as the trade of the community became more complex, these commodities were bought and sold a greater number of times before they were consumed. These circumstances caused a corresponding increase in the value of money, or, in other words, a corresponding decline in general prices. The number of uses for money was extended; the number of
