110 MODERN MONETARY SYSTEMS 
diately following the war from 1919 to 1922 a general 
contraction of currency and fall in prices, the latter was on 
the whole much more marked than the former ; for in most 
of the countries under consideration the circulation was 
only reduced to a small extent. Taking the index at 100 
for 1919, it moves in some few cases to about 80 (Sweden, 
Canada), more often to about go (Switzerland, New 
Zealand, Austria, Denmark), to 98 (France, Netherlands), 
or even rises ultimately to above 100 (Japan, South Africa, 
Spain) by the end of 1922. The price index, on the 
other hand, falls to about 50 or §5 (Sweden, Great 
Britain, Denmark, Holland), 60 (South Africa, Japan), 
70 (United States, Canada, Norway), and 80 (Australia, 
Spain, France). 
This series of facts, viz., that the fall in prices generally 
preceded the contraction of the currency, that the fall 
was in almost all the cases under observation much 
greater than the diminution of the currency and, finally, 
that the fall sometimes even coincides with an increase in 
the currency, runs counter to that rigid conception of the 
relation between the two phenomena which appears to 
be the logical result of the Quantity Theory.! Doubt- 
less it may be objected that conclusions drawn only from 
statistics of issues of currency, without taking into 
account in each country its credit structure, are in- 
sufficient. But the same criticism will apply to whatever 
theory is adopted and must throw the same doubt on the 
results of comparing variations in currency and prices 
both when they coincide and when they diverge. 
For the present we will confine ourselves to summaris- 
ing the most important facts which have now been ascer- 
tained and which, taken as a whole, may appear to con- 
form in general ways with the principles derived from 
the Quantity Theory. They may be described as follows : 
the rise in prices which occurred in the 16th century ; the 
depreciation among other paper currencies of the assignats ; 
the rise in prices which occurred in the middle and again 
1 See infra, where this idea, especially as expressed by Mr. Irving Fisher, 
is discussed.