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tion. Even the widely heralded German efficiency has not 

 been able to devise a plan whereby men can work and fight 

 at the same time. Declining production and the interruption 

 of transportation reduce the supply of commodities. Since 

 time immemorial any force that has reduced production has 

 been a price-raising force. 



In time of war, gold, silver, paper, and credit money de- 

 preciate in terms of other things. This decreased demand for 

 money is a price-raising force. 



On the other hand, there is an increase in the demand for 

 commodities. Normally the world's civilians individually 

 consume most of the goods that the world produces, and only 

 a small proportion of the goods is consumed by individuals 

 collectively that is, by units of government. In time of 

 war the governments become great buyers and consumers of 

 goods and services. Since there is no other source, the gov- 

 ernments must take the goods away from the individuals. 

 Almost regardless of the method used, the result is a net in- 

 crease in the demand for commodities. This is a price-raising 

 force. 



Some persons contend that the change is not due to de- 

 creased demands for money alone or increased demands for 

 commodities alone, but that the two demands are insepara- 

 ble. In time of war, individuals and nations prefer goods to 

 money. Goods are better adapted to the waging of war than 

 is money. Since people regard goods more highly and money 

 less highly than they formerly did, they are willing to give 

 more money for a given amount of goods. This is another 

 way of saying that prices rise. 



Sometimes the world loses faith in the future of a warring 

 nation. Defeat or the inability to meet its debts are sus- 

 pected, both within and without the country. Under such 

 circumstances the exchange value of its currency may 

 fall. Since its money is worth less than formerly, it takes 



