part n INFLATION AND DEFLATION 81

another, bestows affluence here and embarrass-ment there, and redistributes Fortune’s favoursso as to frustrate design and disappoint ex-pectation.

The fluctuations in the value of money since1914 have been on a scale so great as to con-stitute, with all that they involve, one of themost significant events in the economic historyof the modern world. The fluctuation of thestandard, whether gold, silver, or paper, hasnot only been of unprecedented violence, buthas been visited on a society of which theeconomic organisation is more dependent thanthat of any earlier epoch on the assumption thatthe standard of value would be moderatelystable.

During the Napoleonic Wars and the periodimmediately succeeding them the extreme fluc-tuation of English prices within a single yearwas 22 per cent; and the highest price levelreached during the first quarter of the nine-teenth century, which we used to reckon themost disturbed period of our currency history,was less than double the lowest and with aninterval of thirteen years. Compare with thisthe extraordinary movements of the past nineyears. From 1914 to 1920 all countries ex-perienced an expansion in the supply of moneyto spend relatively to the supply of things topurchase, that is to say Inflation. Since 1920those countries which have regained controlof their financial situation, not content withbringing the Inflation to an end, have con-