The introduction of better methods of production has very different immediate consequences, according as these methods affect the commodities which minister to the wants peculiar to workmen as a class, or do not. Let us suppose, as a first case, that the cost of ordinary clothing is reduced one half by reason of newly discovered material, better machines, etc. As in the case of the whole people, so also in that of the owners of capital as consumers, there is, in consequence, an addition to their enjoyment of life. Their interest as well as their capital, compared with clothing material, would have become more valuable. But the relation between capital and interest, that is, the rate of interest, could not be directly changed. (Compare _infra_, note 3.) Only when the working class employ their materially increased wages to increase population; when in consequence hereof, their wages, estimated in money, again decline beyond what it was before; when, therefore, the price of a given quantity of labor declines, does the rate of interest rise, although a portion of that which the workmen have lost may be added to rent on account of the increased population?[186-4] [186-5] If the applicability of the new method of production is confined to articles of luxury used by the upper classes, for instance to fine lace, the rate of interest usual in the country will be affected thereby only to the extent that through the medium of commerce such products are exchanged with foreign nations against commodities consumed by the working classes. But there are very few improvements in production which have not led to a greater cheapness of those things which satisfy the wants of the working class; and this is especially clear in the improvements in the means of transportation so usual in our day. However, the increase of fixed capital, such as machines, railroads, etc., once they are completed, may, at first, cause a depression of the rate of wages, as well as an enhancement of the rate of interest; the former from the fact that a number of workmen is thereby, at least temporarily, thrown out of employment; the latter because the conversion of so much circulating into fixed capital must diminish the supply of the former.[186-6] A second class of obstacles consists in the diminution of the supply of capital. War, for instance, always causes such a destruction of capital, and at the same time for the most part renders the reproduction of capital more difficult to such a degree that the rate of interest is wont to rise greatly.[186-7] Something similar is true of other great catastrophes and of extravagance on a large scale.[186-8] Every state loan, whether intended for direct consumption or to procure capital for use (_Nutzkapitalien)_, decreases the supply of circulating capital which most directly determines the market rate of interest.[186-9] [186-10]