FOR several years prior to 1939 there was in the
United States a widespread fear that the coun-
try was heading toward serious inflation. This
fear was greatly increased by the outbreak of the
Second World War and by our subsequent entrance
into the war, with its resulting tremendous military
and naval expenditures. At this writing, in the sum-
mer of 1942, we have already experienced substan-
tial inflation, and in the judgment of most economists
there is much more in prospect.

Historically speaking, inflation is a usual accom-
paniment of war and of postwar readjustments. Dur-
ing the last century and a half at least, in connection
with every great war in Europe, with the possible
exception of France in the Napoleonic Wars, the
principal belligerents have all experienced serious
inflation. This is true, for example, of the French
Revolution, with its notorious assignats and magnats,
of England's wars at the beginning of the nineteenth

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