Page:Stabilizing the dollar, Fisher, 1920.djvu/80

26 1873 when gold and silver broke apart, and 1896, the price level in gold countries fell 25% and in silver countries rose 30%.

Again countries with exceptional monetary standards show exceptional price movements. When, during a paper money regime such as during the Civil War in the United States or the Napoleonic wars in England, the curve tracing an index number in terms of paper is compared with that in terms of gold, the former looks like a great blister upon the latter. Figure 6 illustrates this fact.

So also when a country shifts over from a gold to a silver standard and from a silver to a gold standard, as did India, its price movements shift likewise. Figure 7 illustrates this.

In the third place, not only do the price levels of various countries having different monetary standards differ from one another, but the degrees of difference correspond to the degrees of difference in their standards, that is, the variations in prices of goods correspond with the variations in the values of the two metals as measured each in terms of the other.

For instance, the divergence between prices of goods in gold countries and in silver countries corresponds roughly to the divergence between the prices of gold and silver. Thus, between 1873 and 1893 the price of silver in London fell 40%, while the price level of commodities in gold countries relatively to prices in silver countries fell about 40%.

Similarly, prices in the United States in the greenback days of the '60s and '70s, as compared with prices in gold countries, such as England and Germany, shifted, in a general way, with the premium