Page:Economic Development in Denmark Before and During the World War.djvu/108

92 Before the war incomes had grown rapidly, but nowhere near as rapidly as during the war, when they doubled in the course of three years. Moreover, the capitals of joint-stock companies increased from 854,000,000 kroner in about 1912 to 1,330,000,000 kroner in about 1917. Savings Bank deposits increased from 575,000,000 kroner in 1901 to 858,000,000 kroner on March 31, 1914; but in the next four years the figure mounted to 1,255,000,000 kroner. Still greater was the increase of business in Banks of Deposit; from 395,000,000 kroner at the close of 1901 the sum increased to 906,000,000 kroner in 1913, and again to 2,441,000,000 kroner in 1917, having almost trebled, accordingly, in those four years. Thus we may go on giving proofs of the rate at which the money economy of the country changed.

In considering these circumstances we must bear in mind that the purchasing power of money greatly decreased. During the war the prices rose on an average by 90 per cent., whereas during the previous fourteen years they had risen by one third altogether, consequently in the proportion of 1 to 2.5. This consideration will greatly reduce our estimate of the amount handled by the Savings Banks and Banks of Deposit. The country's increase in wealth, though real, is not nearly so great as it appears to be.

Various economists have attributed the rise of prices to the great increase in the volume of paper money issued in Denmark as in all other countries. In 1910 the note circulation of the Danish National Bank amounted to 92,000,000 kroner; in August 1914 it had reached 147,000,000 kroner—an increase which cannot be looked upon as extraordinary in view of the great development of industry and commerce. But during the next four years it increased to 365,000,000 kroner, i.e. in the proportion of 1 to 2.5. The above explanation is founded on statistics of earlier days. The truth is more likely to be found in the fact that banks are the instruments of the economic community, and not the reverse; in other words, the banks must adapt their issue of notes to