A general rise of prices follows the introduction of a credit currency, because it is always issued in excess of the natural volume of money; and consequently, as prices must, in the average, conform to the quantity of currency, they will advance as it is increased. It is quite idle to attempt to evade the operation of this law. When the Secretary of the United States Treasury endeavored to " float" his bonds by the issue of credit currency, he unfortunately " floated " all the merchandise of the country at the same time, so that the rise of prices compelled him to pay double for all the government needed; and hence he lost at least one-half of all the bonds that were thus sold.

The effect on fixed incomes is very marked. From whatever source, fixed incomes are depreciated in value just in proportion to the depreciation of the currency. But there is one exception in the practical operation of this principle. If the income received were to be expended entirely for food, clothing, and other ordinary articles of merchandise, the full depreciation of the currency would be felt. But if, as would usually be the case, a portion of it were used for the payment of rent, the depreciation, in so far, would be less operative. Neither the fee nor the use of real estate rises in proportion to other things.

The price of real estate, and its use, would, however, unquestionably advance to nearly the same extent as commodities in general, provided a credit currency were continued as the currency of the country for a long period, say from one generation to another. This, however, never has, and, in the nature of the case, is not likely to take place; credit currency being, necessarily, of limited duration.

Doubtless, investments have been made, especially in large cities, that would not have been made but for the great inflation in the currency of the United States during the Rebellion; but the price of such property has advanced slowly, as compared with flour, clothing, &c*

* That real estate in some large cities has much advanced, we are well aware; but, take the whole country through, it is doubtful if there has been an advance of ten per cent. Indeed, none is visible in the country generally.

A house in New York, worth twenty thousand dollars in 1859, was not worth fifty thousand dollars in 1864; but twenty thousand dollars' worth of flour, at prices of 1859, would have brought fifty thousand dollars in 1864. Why is this? Because everybody believes that prices have not permanently advanced, but will before many years, perhaps before many months, decline. Therefore permanent investments will not be made at prices corresponding to those of ordinary merchandise. This difference between real estate and consumable commodities, as influenced by the expansions and contractions of the currency, should be borne in mind, as it will explain phenomena that will be presented in our further inquiries.