52 MODERN MONETARY SYSTEMS 
the aggravation of the crisis which has since showed 
itself ; the phenomena to which it has given rise, and, 
lastly, the first efforts made with a view to returning to a 
less abnormal state of affairs. 
§ 2. The exchange policy of the Allies during the War. 
Union of sterling and francs with the United States 
dollar. 
In spite of the serious world-wide disturbance in 
economic life due to the dislocation of trade and of 
production and consumption during the war, this was 
not the period in which the exchange crisis was most 
acute 1n many countries. 
On the side of the Allies, the principle of pooling re- 
sources had been applied to finance; the exchange crisis 
was considerably lessened through the credits opened by 
those belligerents which were less injured economically 
and financially, as also by means of agreements with 
certain neutrals. France granted loans to her continental 
allies; England in turn opened credits for her (April 
1916). Thus the franc, which had lost ground much 
more quickly than sterling after April 1915, followed a 
nearly parallel course from April 1916 onwards. France 
and England also provided all their allies with liquid 
assets abroad in large amounts by exporting a small 
portion of their stock of gold and above all by progres- 
sively disposing of the enormous holdings of foreign 
securities of their capitalists.! Later they obtained credits 
in the United States, first from the banks, then, after the 
entry of America into the war, from the American 
Treasury. Finally, large credits were granted by certain 
neutrals for the purchase of supplies. In particular, a 
1 Every effort was made to induce their nationals to place foreign 
securities at the disposal of the Governments. Measures were taken to this 
end by the British Government at the end of 1915, and by the French 
Government early in 1916 (notice in the Journal officiel of May 5th, 1916). 
Measures were also taken which have not yet been entirely abolished, 
particularly in France, to prevent the export of capital for the purchase of 
foreign securities or for any unauthorised purpose (law of April 3rd, 1918, 
still in force owing to successive prorogations).