54 MODERN MONETARY SYSTEMS 
manipulating the exchange market, played a part similar 
to that of a Conversion Office and obtained much the 
same results. Thus, in spite of an enormous deficit in the 
Trade Balance, which had been very little reduced by 
strict limitation in the freedom of import and by the 
arrangement between the Allies to make foreign purchases 
in common,! the fall in the Allied exchanges had been 
arrested with the help of the United States at the moment 
when it was in danger of becoming more rapid. The 
fluctuations of the opening phase gave place to a long 
period of stability in relation to the dollar. The latter, it is 
true, had to bear the burden of the arbitrage, by means of 
which it was used for payments to neutrals ; it fell promptly 
and soon stood lower than the franc had stood earlier in the 
war. Nevertheless, even in relation to neutral exchanges, 
its depreciation was restricted during the entire period of 
hostilities within limits which now seem fairly narrow; 
for the loss on exchange of the dollar did not exceed 
2419, in relation to the Swiss franc shortly before the 
end of hostilities (June—August 1918). After America’s 
entry, sterling hardly lost more than 29, the French 
franc 69, in relation to the dollar. During the entire war- 
period the maximum loss on exchange of the French franc 
was about 10%, with regard to sterling, 129, with regard 
to the dollar, 309, with regard to the Swiss franc and the 
Dutch florin, and 45%, with regard to the Swedish crown. 
The Italian lira did not fall by more than 609, with 
regard to the Swiss franc during the last and severest 
phase of the war. The rouble alone, being insufficiently 
supported on the Allied markets, followed up to the 
middle of 1917 a course approximating to that of the 
Austrian crown, which it then overtook, ultimately losing 
as much as 809%, on the Geneva market. 
1 The surplus exports of the United States, almost entirely sent to the 
European belligerents, have been estimated at more than 7 milliard 
dollars for the years 1917 and 1918 alone. The surplus imports of France 
during the war have been estimated at 70 milliard francs, but were 
partly counterbalanced by the disbursements of the Allied armies, and 
partly paid for by the sale of securities.