PREFACE.
The connection between monetary appreciation and the rate of interest has received very scant attention from economists. The writer has been led to believe that this neglect has somewhat retarded the progress of economic science and the successful interpretation of economic history—in particular the monetary history of the last twenty years. The views here put forward were first stated in brief before the American Economic Association at Indianapolis, December, 1895. They differ radically from those expressed by Mr. Giffen and many other eminent economists. For this reason it has been necessary to make a statistical examination of all available facts bearing on the subject. Such a study could not be properly conducted without a definite economic theory as a starting point. The idea on which this theory is founded appears to have occurred independently to several writers, of whom Mr. Jacob de Haas, Jr., of Amsterdam, seems most fully to have realized its importance. To develop the theory in a quantitative form, some simple mathematics have been employed. With numerical illustrations at each step, it is hoped that those to whom mathematics are distasteful will find few, if any, impediments to easy reading. The mathematical reader, on the other hand, may feel that the discussions are too much encumbered by numerical illustration and detail; but these presentations are usually in such a form that they can easily be passed over by those who find them superfluous. The gist of the theory is contained in Chapter II, but its statement would not be complete, nor the apparent objections to it fully answered, without the discussions of Chapters III-VI.
