All lenders of money, particularly bondholders, favor an appreciating currency. No other class is always actively in favor of an appreciating currenc… - Edgar Lawrence Smith

The economists would say that it is the upward "Secular Trend" that favors common stocks as opposed to bonds, so long as the population and the business of the country are increasing. There is something more than growth of population that contributes to the rise in the "Secular Trend" and the increase in business from decade to decade. It is the constantly accelerating speed of modern life. All of our activities are on a much more rapid basis to-day than they were twenty years ago, due in part to the constant increase in the speed of communication and transportation and the countless major and minor time-saving devices that have been introduced into our business and private life.

We have found that there is a force at work in our common stock holdings which tends ever toward increasing their principal value in terms of dollars, a force resulting from the profitable reinvestment, by the companies involved, of their undistributed earnings. We have found that unless we have had the extreme misfortune to invest at the very peak of a noteworthy rise, those periods in which the average market value of our holdings remain less than the amount we paid for them are of comparatively short duration, and that even if we have bought at the very peak, there is definitely to be expected a period in which we may recover as many dollars as we have received. Our hazard even in such extreme cases appears to be that of time alone.

It is assumed that the reader is familiar with some, at least, of the various conceptions of the business cycle currently discussed by economists. These are summarized, in greater detail than is necessary for our present purposes, in Mitchell's "Business Cycles, The Problem and the Setting" (1927), and King's "The Cause of Economic Fluctuations" (1938); the latter being noteworthy for its sympathetic reference to those who have found it necessary to push their search for the underlying causes of business cycles beyond the limits customarily regarded as the boundaries of the economic field.