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.! Doubtless
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 insufficient.
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 summarising
the most important facts which have now been ascertained
and which, taken as a whole, may appear to conform
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.
