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A TREATISE ON MONEY

BK. II

from uniformity of movement as a temporary ab-normality which will soon cure itself.

Even if the ultimate effect of monetary changeson different prices were to be, at long last, uniform,this would still be less important for many purposesthan the initial variability. It may, indeed, beconceded that relative price-levels in England andFrance may not be appreciably different now fromwhat they would have been if the disturbances of theWars of Napoleon had never occurred—though thismay only be an example of the general propositionthat the influences of even the most catastrophicepisodes of history evaporate away in time or atleast lose themselves as unidentifiable drops in theocean of subsequent events. But however this maybe, it is above all with short-period consequences thatwe are concerned in some of our most practicallyimportant inquiries into monetary phenomena—in thecase of all those, for example, connected with thefluctuations of credit and of business activity. Toact in such cases on the assumption that all classes ofprices are affected more or less in the same way bya change “ on the side of money ” is, as we have saidabove, to assume away the very phenomenon whichwe are out to investigate. The fact that monetarychanges do not affect all prices in the same way, in thesame degree, or at the same time, is what makes themsignificant. It is the divergences between the move-ments of different price-levels which are at once thetest and the measure of the social disturbances whichare occurring.

When we are concerned with the Diffusion ofPrice-Levels, not within a single country, but inter-nationally, there are still greater obstacles to theassumption of a rapid and unimpeded action. Thistopic belongs to the Theory of International Traderather than to the Theory of Money. But Chapter 21below will contain some observations bearing on it.