Thus when there are violent shocks to the pre-existing equilibrium between the internal and external price-levels, the pre-war method is likely to break down in practice, simply because it cannot bring about the re-adjustment of internal prices _quick enough_. Theoretically, of course, the pre-war method must be able to make itself effective sooner or later, provided the movement of gold is allowed to continue without restriction, until the inflation or deflation of prices has taken place to the necessary extent. But in practice there is usually a limit to the rate and to the amount by which the actual currency or the metallic backing for it can be allowed to flow abroad. If the supply of money or credit is reduced faster than social and business arrangements allow prices to fall, intolerable inconveniences result. Perhaps some of the incidents of debasement of the coinage which are sprinkled through the currency history of the late Middle Ages were really due to a similar cause. Prior to the discovery of the New World the precious metals were, over a long period, becoming progressively scarcer in Europe through natural wastage in the absence of adequate new supplies, and the drain to the East; with the result that from time to time the price level in England (for example) would be established on too high a level in relation to European prices. The resulting tendency of silver to flow abroad, being accentuated perhaps by some special temporary cause, would give rise to complaints of a “scarcity of currency,” which really means an outflow of money faster than social organisation permits prices to fall. No doubt some of the debasements were helped by the fact that they profited incidentally a necessitous Exchequer. But they may have been, nevertheless, the best available expedient for meeting the currency problem.[47] We shall look on Edward III.’s debasements of sterling money with a more tolerant eye if we regard them as a method of carrying into effect a preference for stability of internal prices over stability of external exchanges, celebrating that monarch as an enlightened forerunner of Professor Irving Fisher in advocacy of the “compensated dollar,” only more happy than the latter in his opportunities to carry theory into practice. [47] Cf. Hawtrey, _Currency and Credit_, chap. xvii. The reader should notice, further, the different parts played by discount policy under the one régime and under the other. With the pre-war method discount policy is a vital part of the process for restoring equilibrium between internal and external prices. With the post-war method it is not equally indispensable, since the fluctuation of the exchanges can bring about equilibrium without its aid;--though it remains, of course, as an instrument for influencing the internal price level and through this the exchanges, if we desire to establish either the one or the other at a different level from that which would have prevailed otherwise.