No commodity ever existed which could thus move in value. During long periods of time--within which gains in mechanical skill and invention, revolutions in political and social habits, changes in taste or fashion, settlement of new countries, opening of new markets, may take place--great alterations in the value of the standard may occur wholly from natural causes affecting the commodity side of the price ratio. And yet, in default of a perfect standard, persons who borrow and lend create debts and obligations expressed in terms of that article which has been adopted as the standard by the concurring habits of the commercial community of which they form a part. It should be understood, whenever men enter into obligations reaching over a period of time, that a necessary part of the risks involved in this undertaking is the possibility of an alteration in the exchange values of goods, on the one hand, and in the standard metal on the other, due to industrial changes and natural causes. This is one of the risks which belong to individual enterprise, differing in no way from other possibilities of gain and loss. For instance, prices rose, as indicated by an index number of 100 in 1860 to an index number of 216 in 1865. Therefore, in the United States, in this period of rising prices the creditor lost and the debtor gained. On the other hand, from 1865 to 1878, prices fell from 216 to 101, and in this period of falling prices the creditor gained and the debtor lost. It is to be observed, however, that these figures refer to actual quotations of prices during the fluctuations of our paper money. But it is evident in such movements as these, that parties to a time-contract must take their own chances of changes; and indeed it is much more wholesome that they should do so. It should be kept well in mind that it is not a proper function of government to step in and save men from the ordinary risks of trade and industry. It goes without saying that if changes in the value of the standard due to natural causes take place during the continuance of a contract, it is not the business of government to indemnify either party to the contract. This is a matter on which every individual who enters into time obligations must bear his own responsibility. FOOTNOTES: [1] John Stuart Mill, _Principles of Political Economy_, Vol. II, pp. 17-23. [2] Adapted from _The Report of the Commission of the Indianapolis Convention_, pp. 92, 93, 103, 104. The University of Chicago Press, 1898. CHAPTER II THE EARLY HISTORY OF MONEY