Page:Stabilizing the dollar, Fisher, 1920.djvu/77

7] plains of China, India, Mexico or South America has doubled in price during the war period?"

Lord D'Abernon found that in England those objects of luxury "which would seem to be influenced not at all or only very remotely and to a very small degree by increased cost of labor and materials," such as old books, prints and coins, had, nevertheless, advanced, roughly speaking, fifty per cent during the war.

There seems little doubt that the rise in prices during the war, even in Russia where scarcity of goods played a part, was, nevertheless, chiefly due to paper money depreciation; while in the United States, prices rose before America entered the war, not because of any general scarcity here, but because of gold depreciation brought about by huge imports of gold (a billion dollars) from Europe, in other words, gold "inflation." After we entered the war there has been added credit inflation.

7. Price Movements Vary with Monetary Systems

Thus far our argument has been one of elimination. We have excluded the probability of the commodity explanation for rising prices (except, to some extent, in war-time) and find ourselves almost forced to a monetary explanation.

But we have still more positive evidence of the great and constant influence of money and money substitutes on prices.

We find, in the first place, that countries having like monetary standards have like price movements. Thus