vi EUROPE AFTER THE TREATY 225

exchange of commodities at what is not their realrelative value not only relaxes production, but leadsfinally to the waste and inefficiency of barter. If,however, a government refrains from regulation.andallows matters to take their course, essential com-modities soon attain a level of price out of thereach of all but the rich, the worthlessness of themoney becomes apparent, and the fraud upon thepublic can be concealed no longer.

The effect on foreign trade of price-regulation andprofiteer-hunting as cures for inflation is even worse.Whatever may be the case at home, the currencymust soon reach its real level abroad, with the resultthat prices inside and outside the country losetheir normal adjustment. The price of importedcommodities, when converted at the current rateof exchange, is far in excess of the local price,so that many essential goods will not be importedat all by private agency, and must be providedby the government, which, in re-selling the goodsbelow cost price, plunges thereby a little furtherinto insolvency. The bread subsidies, now almostuniversal throughout Europe , are the leading exampleof this phenomenon.

The countries of Europe fall into two distinctgroups at the present time as regards their manifest-ations of what is really the same evil throughout,according as they have been cut off from inter-national intercourse by the blockade, or have had

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