Exchange, Prices, and Production in Hyper-Inflation

FOREWORD

THIS study is the first of a series to be published under the auspices of the International Finance Section of the Department of Economics and Social Institutions in Princeton University. This section was established as a memorial to the late James Theodore Walker, Princeton 1927, with funds largely provided by members of Mr. Walker’s family. The function of the Section is research, advanced teaching and public service in the field of international finance.

Since German reparations furnish perhaps the most important present problem’s in this field it seemed fitting that this volume on the German currency débâcle in the immediate post-war years—a phenomenon closely associated with reparations—should inaugurate the series. It is the intention of the Section on International Finance to develop the fundamental rather than the ephemeral aspects of the subjects with which it deals and the student of monetary problems will find matter in the theoretical and statistical chapters of this book which will, I am sure, be of permanent interest to scientific economists. At the same time the careful analysis which Professor Graham has made of the effects of inflation on German national economic life should engage the attention of men of affairs. The rapidity of German recovery since 1924 has frequently been remarked. If, as Professor Graham suggests, the patient was not as sick in 1924 as appearances indicated, and had in fact slowly been improving since the end of the war, prevailing ideas should be readjusted along two lines. In the first place, it is improbable that the relative prosperity of Germany since 1924 is the flash in the pan that many people have been disposed to regard it and, in the second, prosperity, though real, has not been as rapid as surface phenomena would lead one to believe. The synthesis of these conclusions points to a tempered optimism for the future.

E. W. KEMMERER.