oh. 15 INDUSTRIAL & FINANCIAL CIRCULATIONS 217

of price arising in this way than by an equal changedue to a rise in the rate of efficiency-earnings. Thisis particularly the case where the profits are emergingin respect of a rise in the price of working capital whichhas not yet communicated itself to finished con-sumption-goods. We can conveniently call this stateof affairs Commodity Speculation, meaning by thismovements in the prices of goods in process of pro-duction which are not yet reflected in the purchasingpower of money. For fluctuations in the price ofWorking Capital, of which the index-number of rawmaterials at wholesale may be taken as fairly repre-sentative, may be supported by expectations as to theprices which will be obtained on the re-sale of the goodsat a subsequent date either in the same or in a morefinished form. Thus for a time, the length of whichwill be determined by the duration of productiveprocesses and the cost of carrying stocks, the rise inthe wholesale standard can be sustained without acorresponding rise in the consumption standard.

It follows that a speculative rise in the wholesalestandard, unaccompanied by a rise in the consumptionstandard, is particularly unlikely to be held back by ashortage in the quantity of money. Moreover, there isa further time-lag between the price-rise and the de-mand for money, in that the current price-quotationsreflect the prices at which contracts for future com-pletion are now being entered into; so that it is notuntil the date of completion that the higher prices willcall for increased Business-deposits. If, indeed, thespeculative movement is not supported in due courseby a rise in the consumption standard, it is not likelyto survive for long. For in this case the expectationson which it was based will have been disappointed.Nevertheless the time which elapses before the re-action may be quite substantial; and during thisinterval the movements of the wholesale standardand of that part of the Business-deposits which relate