THE MONETARY CRISIS 51
Trade Balance and partly by the expenditure of foreign
tourists.
But in spite of several recoveries, particularly between
May 1921 and May 1922, the French exchange in 1923
and 1924 dropped to the lowest point it had ever reached.
This aggravation of the exchange crisis in France does not
appear to have been directly caused by economic factors.
For the recovery of foreign trade, stimulated by a satisfactory
 relation between internal and external prices, was
followed by a serious attempt to balance the Budget. The
note issue, which had indeed risen from 30-§ milliards in
the middle of November 1918 to just over 39-5 milliards
in November 1920, has since been reduced to about 37
milliards. Therefore the economic and financial factors on
which speculators habitually form their judgment of the
future were not such as to explain an increase in the
depreciation of the franc. It becomes more and more
apparent that speculators were influenced by political considerations.
 In 1920 they paid particular attention to the
attitude of the American Government and to any indications
 of its intentions to suspend or resume financial
assistance to Europe. Until the beginning of 1920, the
hope which was long entertained that official credits would
again be opened seems to have partly counterbalanced
such influence as a prolonged deficit in the Trade Balance,
a persistent rise in prices, and the great uncertainty in the
Budget position may have had on the French exchange.
Later speculation appears to have discounted the payment
 of reparation. For the French exchange improved
considerably, the dollar falling from 13-84 francs to 11-97
francs (monthly averages for April and May 1921),
whereas the German exchange fell correspondingly.
Speculation was then guided by the alternating agreements
 and disagreements between the former Allies,
which were reflected in alternating confidence and mistrust
 regarding the settlement of the international obligations
 arising out of reparation and interallied indebtedness.
 It was the significance given to political events by
international speculators, especially in London and New

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