114 MODERN MONETARY SYSTEMS 
during this period by any greater rise in prices than 
occurred in countries with a constant circulation.! These 
observations suggest that, with the disappearance of 
causes such as war, which give rise both to abnormal 
issues (the financial situation) and to a rise in prices 
(under-production, exchange, etc.), it is no longer easy 
to prove that simultaneous variation of these two kinds 
of phenomena in which the Quantity Theory finds its 
origin. 
In any case it will be observed that it is not enough, 
in order to justify the Quantity Theory and show that it 
1s universally applicable, to rely on a few historical coinci- 
dences; and it no longer appears, as at first sight, to 
follow quite simply and inevitably from that interplay of 
supply and demand which is a fact of common experience. 
We will therefore now attempt to discover the logical 
basis of this conception, which is at present imperfectly 
established by the sum total of our observations of a few 
experienced facts. 
§ 3. The basis of the Quantity Theory; how far it is logically 
valid. 
If we are prepared, subject to further analysis, to 
admit in its most general form the proposition contained 
in the Quantity Theory, and if we hold it to be gener- 
ally justified in extreme cases, we shall in particular note 
that any considerable and persistent price movement 
connoting an equally considerable and lasting change in 
the circulation should be assumed to be connected with 
that change and that the latter should be considered a 
factor, and perhaps a predominant factor, in the price 
movement. 
But many authors go further than this; in the first 
place, they state that the quantity of money will neces- 
1 See above, p. 93. M. Aftalion, in the article already cited, points out 
that in Poland, also, prices remained at about the same level from October 
1921 to January 1922, in spite of a considerable increase in the note issue 
(183 to 227) and at a time when the exchange was almost stable.