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 satis- 
factory 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 con- 
siderations. In 1920 they paid particular attention to the 
attitude of the American Government and to any indica- 
tions 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 pay- 
ment 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 agree- 
ments and disagreements between the former Allies, 
which were reflected in alternating confidence and mis- 
trust regarding the settlement of the international obliga- 
tions arising out of reparation and interallied indebted- 
ness. It was the significance given to political events by 
international speculators, especially in London and New 
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v