88

THE EFFECTS OF

CHAP. XX.

necessary that the increase should on the wholecourse of those years be at the rate of five per cent,annually. Every addition would reduce the ratioof the succeeding addition, acting as compoundinterest does on money. If we take as an examplethe sum of all commodities to be ten millions ofpounds, and add to it two per cent, the first year,and to the sum so obtained, ten million two hun-dred thousand pounds, at the end of the secondyear, with the addition of two per cent., willbe ten million two hundred and four thousandpounds. In this way the prices of the commodi-ties would be double, or twenty millions, in some-what less than thirty-six years. In the next thirty-six years, at the same ratio of addition, the priceswould be again double, or forty millions. Thenext twenty-eight years would be more than suf-ficient to raise the prices of the commodities tofive times as much as at the beginning of the hun-dred years.

This view of the subject, thus expressed so asto make it intelligible without any algebraic opera-tion, seems necessary to account for tbe little noticetaken of the great advance in prices between 1483and 1583 \ An advance of somewhat less thantwo per cent, is scarcely perceptible till some yearshave elapsed ; and those who do happen to observeit would be satisfied by attributing it to some localor temporary cause, rather than to so distant an

1 The exact annual addition of 1-J per cent, to any sum willin one hundred years increase the original sum fivefold.