THE UNITED STATES, III. AFTER 1914 331
impact of gold movements into the country and out of it — were
the unexampled trade conditions of the war and post-war periods.
All previous rules and traditions concerning the amounts of reserve
which central banks should acquire and might be expected to main-
tain were shattered. The Federal Reserve Banks, guided in their
policy by the Reserve Board and by their own officers as well, could
hardly do otherwise than let their vast gold holdings serve as a
reservoir into which and out of which gold might move by the
hundreds of millions without affecting credit conditions, the price
level, the currents of international trade. Neither inflow nor
outflow had the effects which the received doctrines contemplate ;
nor indeed, so far as one can guess, could they have had these
effects, under the conditions then prevailing,whatever the guiding
authorities might have tried to approve or to veto.
It would carry us beyond the scope of the present volume to
enter on the questions of monetary theory which are raised by
these experiences. Questions of the same sort, and no less per-
plexing as regards their bearing on the theory of money and prices,
are raised by the monetary experiences of European countries
during the same years. When more time has elapsed and a nearer
approach to a normal economic situation has been reached, the
enigmas may prove less baffling than they appeared at the time,
the eventual outcome more in accord with familiar doctrines. But
it is clear that we must be cautious in applying the familiar doc-
trines of international trade to the interpretation of this quite
extraordinary situation.
Take what is perhaps the most significant aspect of all: that
equalization (approach to equalization) between the money values
of imports and exports which, as we have seen, was reached by
1923. Such an excess of exports as that of the war years was
obviously abnormal and could not persist. But the return to some-
thing like normal conditions was not reached by the process which
our general reasoning leads us to regard as normal. The inflow
of specie which would presumably ensue with the continuing enor-
mous excess of exports was belated. When it did set in, after
1919, it came with a rush. And when finally the gold poured in,
