18 
Inflation and Stabilization 
restore its currency to its old gold parity. As 
the currency had previously been considerably 
depressed, the restoration required a process of 
deflation. In Sweden no attempt was made to 
mitigate this process by extending it over a long 
period of years. By aid of a contraction of the 
currency, the general price level was brought 
down in a very short time to less than half of what 
it had been. The result was, of course, a most 
violent economic crisis, which annihilated the for- 
tunes of a great many people, exposed the banks 
to serious difficulties, and for some time paralyzed 
the industry of the country. It is worth while to 
notice this fact because it seems often to be be- 
lieved that Sweden succeeded in restoring its cur- 
rency to its old gold parity without any serious 
difficulties and therefore could be taken as a proof 
of the soundness of such a policy. On the other 
hand, Sweden reaped the fruits of its determina- 
tion and its sacrifice. The economic life of the 
country started again on the new basis, and in the 
next few years comparatively great prosperity 
was reached. 
In Denmark and Norway an attempt was made 
to restore the old gold parity by aid of a gradual 
and inappreciable process of deflation over an 
indefinite series of years. The experience of these