56 MODERN MONETARY SYSTEMS 
experienced in obtaining foreign credits. She was obliged 
to support Austria, Bulgaria and Turkey, but was far 
from having at her disposal, like France and England, 
enormous quantities of foreign securities.! ‘The United 
States failed her just at the moment when the American 
Treasury opened unlimited credits to her new Allies, 
whose financial resources were beginning to fail. 
It is true that with her powerful industry and the raw 
materials which she obtained in Central Europe, Germany 
was in a position to provide amply for the wants of herself 
and her Allies in war supplies, without becoming too 
dependent on neutral markets. Nevertheless she experi- 
enced great difficulty in paying for her imports, and the 
credits opened in her favour by her smaller neighbours 
were not adequate to her needs. She therefore made every 
effort to support her currency, not only by reducing im- 
ports to a minimum and prohibiting the transfer of capital 
abroad, but also by putting to the best use such stocks of 
foreign currencies as she possessed. By an ordinance of 
January 28th, 1916, supplemented by another of February 
oth, 1917, a Central Foreign Exchange Office (Devisen- 
zentrale) was set up to which foreign bills were to be 
handed over, and to which all those who wished to obtain 
direct or indirect media of exchange were to apply. All 
orders for the purchase or sale of foreign exchange were 
to be sent through one or other of the twenty-six banks 
which were admitted to form part of the Office. 
The Foreign Exchange Office thus enjoyed a com- 
pulsory monopoly of exchange and was therefore in a 
position to peg the rate more or less arbitrarily ; for it 
could buy up all the available exchange, and thereupon 
distribute it without being obliged to adapt the rate, 
which it fixed itself, to the ratio between supply and de- 
mand. The rates of the mark to the florin or of the mark 
1 An estimate commonly accepted places Germany’s pre-war holding of 
foreign securities at about 25 milliard marks; but as a large proportion 
could not be used, being in enemy hands, Germany had barely one-third 
of this sum at her disposal and, even so, only took belated measures to 
mobilise her securities.