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It devalues in this way:
Now when you say that you have an automobile it means that you have an actual automobile.
If carriages were defined as automobiles then when you would say "I have an automobile" it could mean that you actually do not have one, you just have a carriage. And proudly call it automobile just because government extended the meaning of the word. While actually it is just the same old carriage and not an automobile.
There was absolutely no reason to add wrong definition to the world. New word would have made sense.
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