n INFLATION AND DEFLATION 91

their real value in England , seven-eighths inFrance, eleven-twelfths in Italy , and virtuallythe whole in Germany and in the successionstates of Austria-Hungary and Russia .

Thus the effect of the war, and of the monetarypolicy which has accompanied and followed it,has been to take away a large part of the real valueof the possessions of the investing class. Theloss has been so rapid and so intermixed in thetime of its occurrence with other worse lossesthat its full measure is not yet separately ap-prehended. But it has effected, nevertheless, afar-reaching change in the relative position ofdifferent classes. Throughout the Continent thepre-war savings of the middle class, so far as theywere invested in bonds, mortgages, or bankdeposits, have been largely or entirely wipedout. Nor can it be doubted that this experiencemust modify social psychology towards thepractice of saving and investment. What wasdeemed most secure has proved least so. Hewho neither spent nor “speculated,” who made“proper provision for his family,” who sanghymns to security and observed most straitlythe morals of the edified and the respectableinjunctions of the worldly-wise,—he, indeed,who gave fewest pledges to Fortune has yetsuffered her heaviest visitations.

What moral for our present purpose shouldwe draw from this? Chiefly, I think, that it isnot safe or fair to combine the social organisa-tion developed during the nineteenth century(and still retained) with a laisser-faire policy