64 MODERN MONETARY SYSTEMS
of 1920, and 122 milliards at the end of 1921. It might
be supposed that, given this complete absence of assets, the
German financial system must have had an unfavourable
influence on the value of the mark ; but after having de-
preciated by 50%, at Amsterdam at the end of 1918, and
by nearly 90-89, at the end of 1919, the mark was nearly
back at the latter rate at the end of December 1920, with
a depreciation of 92-109, as against 94:79, in January of
the same year and 87-59, in June.l Even internal prices
which had only been recorded in Germany since 1920 had
varied little in the course of this year; the index moved
from 1446 in August to 1437 in December, after having
reached 1506 in November, and remained at a lower level
during the first seven months of 1921 (official index of
wholesale prices).
The connection commonly supposed to exist between fluctua-
tions in the exchange, the note issue and prices is therefore
not apparent during this period; the comparative stability
of the exchange may, however, be partly attributed to
certain steps taken by the Reichsbank and the German
Government.?
But although, as has just been shown, the note issue in-
creased very considerably between 1918 and 1921 with-
out any appreciable fluctuations in the exchange or in
internal prices, it is no less remarkable that, from the
second half of 1921 onwards, the exchange rates and
prices rose concurrently and far out-distanced the note issue,
which, in spite of the activity of the Government printing press,
never increased in proportion to the rise in prices. Whereas
on June 30th, 1921, the percentage increase in prices was
only 2:19, of the corresponding figure for the previous
quarter, the note issue having increased by 59 the
position is reversed as soon as prices begin to follow the
exchange. This is shown by the table on p. 65.
Thus the monetary crisis in Germany shows on the
whole that the internal price fluctuations were narrowly
1 The loss on New York was rather more than 959%, at the end of January
1920, 89%, in June, and 94'1%, in December.
2 See Rist, Revue d’ économie politique, 1921, p. 73.
