BETWEEN THE MIDDLE OF MAY and early July of 1973, the price of the dollar in the foreign exchange market fell sharply. The amount of the decline was greatly exaggerated by some reporters, who cited figures of 25 percent or more, which really measured only the dramatic decline against the German mark, the Swiss franc, or an average of a few European currencies. The fall against an average of the currencies of the major U.S. trading partners was much less-6.3 percent, when each country is weighted in proportion to its bilateral trade with the United States. The dollar remained stable against the currencies of our two major trading partners, Canada and Japan, and also against those of the United Kingdom and Italy. Even this smaller average decline, however, presents something of a mystery, coming as it did after the dollar had been devalued on February 12, 1973, for the second time in fourteen months, and when people who follow these matters generally held that it was, if anything, already below its long-run equilibrium value.