60 MODERN MONETARY SYSTEMS 
France, with an enormous surplus of imports to pay for,! 
suddenly lost the benefit of the credits opened by the 
British Treasury (end of 1918) and by the American 
Treasury (March 1919). Thereby the regulating machinery, 
which had consisted in the issue of bills at a more or less fixed 
rate with the help of these foreign credits, and had bound up 
the franc with sterling and dollars since 1917, disappeared. 
These large credits which supplied the exchange market 
were succeeded by private credits, which were, however, 
insufficient, chiefly because some of those opened during 
the war expired, and had either to be paid off or 
renewed. The French exchange seems therefore to have 
been supported mainly by the sale of securities or by 
speculative credits 2 opened by foreign capitalists, who 
with every fall in the franc discount a recovery in the 
near future, and, by the purchase of credits on France or 
by the sale of dollars, .., of bills drawn in Paris on New 
York, effect transfers of capital in the hope of repatriating 
them later at a more favourable rate.? 
Capital temporarily invested in France or left on de- 
posit in the hope of better times is still estimated at several 
milliards of francs. Speculation seems to have helped 
the French exchange considerably in surmounting the 
difficulties of the period between the withdrawal of the 
British and American official credits and the recovery of 
the economic situation, which was gradually brought 
about partly by the restoration of equilibrium in the visible 
1 According to French official Customs statistics, the deficit in the 
Trade Balance was 61 milliards between August 1914 and December 1919, 
and 46 milliards between January 1919 and December 1922. Whatever the 
margin of error in Customs statistics for such an abnormal period, and 
whatever the corrections which may be necessary as a result of factors 
which are not susceptible of being statistically recorded, these figures give 
some idea of the order of magnitude of the deficit to be met with the help 
of international credit. 
2 The method of obtaining these credits has been described by M. 
Décamps in particular in “La Crise des Changes.” Speculators understood 
so well the significance of this change of system that, as M. Décamps says, 
President Wilson’s message of December 1919 that Europe would in 
future have to do without American assistance caused sterling to rise in 
48 hours from 41 to 45 francs, and the dollar from 10 to 12 francs.