If any nation tries the old
experiment of paying its bills in irredeemable paper money, that
desperate expedient will have the same result that it did with us during
the civil war. Inflation of the currency will expel gold from that
country and raise its price level higher than elsewhere.
After the war is over prices will probably not retreat, but will move
upward even faster than before. There may then come the familiar "boom"
period, which may culminate in a commercial crisis in a few years after
the close of the war, as was true after the Crimean war, the American
civil war, and the Franco-Prussian war. The rebound will probably be
fastest in England. Statistical price curves of many nations usually
show an upward turn when war begins and another when it ends. The war
will thus aggravate a rise of prices already in prospect.
It would take considerable space to give, completely, the reasons for
these prognostications, but I have tried to justify them in a brief
addendum to a book to be issued this week on "Why Is the Dollar
Shrinking?"
The sudden lightning bolt of war produced as one of its first economic
effects a general dislocation of credit machinery in Europe and to some
extent in this country.
Pages:
557
558
559
560
561
562
563
564
565
566
567
568
569
570
571
572
573
574
575
576
577
578
579
580
581