on gold in terms of greenbacks, and with the New York rate of exchange on London. This is shown in Figure 8.
For the period of the recent war the data are so meager that it is impossible to express the exact re-
Fig. 8. The Ratio of the American to the English Price Level Compared with the Ratio of American to English Money
Showing a fairly close similarity and throwing light on the contrasts of Figure 6. Thus, when, during 1861-1864, the currency, or greenbacks, which would buy a unit of gold rose rapidly (as shown by the lower curve), American prices in greenbacks also rose rapidly relatively to English prices in gold (as shown by the upper curve); and when, during 1864-1878, the former ratio fell, the latter ratio fell also.
lations in figures, but we can arrange the different countries in the approximate order in which their prices rose. As a result, we find that the order of the nations corresponds in general with the order in which the currency in these nations has been inflated by paper as well as with the order in which their monetary units have depreciated in the foreign exchange markets. This order—of ascending prices and roughly of expanding currency during the war—is: Australia, India, New Zealand, United States, Canada, Denmark,
