CURRENCY AND PRICE MOVEMENTS 103 
It should, however, be added that when a really general 
price movement takes place, i.e., one which involves 
nearly all commodities, and is also continuous and exten- 
sive, it is reasonable to seek some cause which is also 
general, and may result, in the event of a rise, in a general 
increase in purchase prices, due to an increase in the 
volume of currency in circulation, or in selling prices, due 
to a decline in production. 
And so, even on the hypothesis of a general, wide and 
continuous price movement, and still admitting the 
principle of the Quantity Theory, we ought not to exclude, 
a priori, the factor of commodity; but it seems that we 
should be particularly justified in taking into account the 
monetary factor. 
§ 2. The Quantity Theory in History. 
Moreover, some historical facts seem to bear out this 
hypothesis. We may mention the rise in prices in the 
16th century, which, even then, was attributed by some 
contemporaries to an enormous influx of precious metals.1 
! In addition to various works by Levasseur, de Foville, and D’Avenel 
and G. Wiebe, Zur Geschichte der Preisrevolution des XV Iten und XV IT ten 
Jahrhunderts, a recent thesis on the subject by M. A. Liautey, “La hausse 
des prix et la lutte contre la cherté en France au XVIeéme siécle,” may be 
mentioned. In spite of these interesting contributions to the subject it is 
difficult to measure price fluctuations during this period with any degree 
of accuracy. The rise seems to have begun to make itself felt before the 
main influx of precious metals began and continued after their production 
had declined; but the steepest rise seems to have occurred in the third 
quarter of the 16th century at the time when the increase in the world 
stock of metal was most marked. This explains Jean Bodin’s theory of 
cause and effect, which fits in so well with the doctrines ordinarily held 
that it has been accepted as decisive. The attention of most contemporary 
observers, however, seems to have been drawn to other factors, and 
chiefly to the fall in production during a period of war and other dis- 
turbances, and to the monetary policy adopted during this period. This 
last point, which is emphasised by M. de Malestroiet, deserves to be noted. 
In the 16th century, at least in France, the Crown debased the weight and 
fineness of currencies to a small extent; but it forced up their value, by 
continually raising the value of a gold or silver coin in livres, so that a 
smaller and smaller weight of precious metal corresponded to the livre or 
money of account. M. de Foville has estimated that in this way the livre