ABSTRACT
Throughout the nineteenth century it was taken for granted that the interests of mankind could best be served by a monetary system in which the currency was maintained at a fixed parity in relation to gold. This conception had taken such deep roots in the minds of statesmen, economists and the general public that even after the war, in spite of the fundamental changes of conditions, most countries considered it their supreme duty to restore their currencies to their prewar parities and maintain these parities at all costs. Even countries such as France and Italy, where post-war conditions resulted in a substantial depreciation of the exchange, were reluctant to give up hope of the eventual return to the prewar parity. Great Britain and the Scandinavian countries restored their currencies to their pre-war gold value at the cost of heavy sacrifices, and maintained them there until the crisis, in spite of the obvious disadvantages of this policy. Once the gold standard was restored at the old parities, it would have been regarded as sacrilege to suggest that these currencies should be devalued. Similarly, when countries where post-war inflation assumed high dimensions reluctantly consented to devalue their currencies, public opinion became determined that these new parities should be maintained, and regarded them as just as sacrosanct as they did the old parities before the war.
