62 MODERN MONETARY SYSTEMS
York, which seems to have brought about the most violent
fluctuations in the French exchange up till 1923; the
prospect of payments falling due at certain periods, and
especially at the end of 1920 as a result of abnormal im-
ports or of certain reimbursements, exercised a consider-
able but less permanent influence at certain times. On
the whole, the French exchange during the post-war
period, mainly resting on speculative credits, was in-
fluenced rather by the imponderable factors in the fore-
casts of foreign exchange dealers, who were more pre-
occupied with the future than the present, than by the
substantial elements of the Balance of Payments.
No doubt this also applies to the Italian exchange,
which followed the same course as the franc for a long
time, although at a much lower level ; but from the end
of 1922 onwards their connection ceased, and lire showed
a tendency to rise, whereas the depreciation of the French
exchange became more marked. The Belgian exchange,
on the other hand, after having long been at a somewhat
higher level than the French franc, has from then onwards
usually preceded the latter in any fall.
§ 6. The Monetary Crisis in Germany and its characteristics.
Prices follow the exchange, but are fairly independent
of the note issue.
The fate of the exchanges in the defeated countries,
and in particular in Germany, where the mark followed
its course to its ultimate collapse, seems also to have been
decided by the psychological elements in speculation.
Thus the mark, which at first had also been supported by
speculative credits, was gradually forsaken as the dis-
appointed speculators sold out and cut their losses. The
chief stages of depreciation coincide with the political
events which affected Germany, particularly those con-
nected with reparation payments.! But the fall in the
1 Apart from the sharp fall which followed the presentation of the
Schedule of Payments, the breakdown of the Franco-British negotiations
in August 1922 regarding the request for a moratorium, the decision
regarding Upper Silesia in October, and, lastly, the occupation of the Ruhr,
should be noted.
