THE MONETARY CRISIS 71 
§ 9. Efforts to re-establish normal exchanges. England's 
traditional policy. 
In concluding this brief review of the exchange crisis 
resulting from the war, something must be said of the 
efforts of certain countries to put an end to it. Among 
the countries which were effectively belligerent, only the 
United States who entered the war late and, with the 
advantage of an enormous credit balance, found that a 
large part of the world’s stock of gold was flowing back to 
them, were able to return to normal conditions by restor- 
ing the freedom to export gold. Nor did this bring about a 
large decrease in their note issue, which, taking the index 100 
in 1919 as a basis, rose to 106 at the end of 1920, fell 
back to 88-6 at the end of 1921, and again increased, after 
a slight diminution (83) at the beginning of 1922, to 89 
at the end of that year. 
The former belligerents have for the most part not 
yet begun to pursue any definite monetary policy; the 
by being given a constant internal purchasing power. At first it may seem 
that this was the method adopted in Germany with the issue of the 
Rentenmark (ordinance of October 15th, 1923). This new currency is 
convertible unit for unit into gold debentures with a nominal value of 
500 gold marks, constituting an investment of constant value, the interest 
being equivalent to a fixed sum in gold at 59. Thus, besides the vague and 
illusory guarantee of a general mortgage on real property, the bearer of 
these notes at least had the prospect of an income with a constant value. 
The issue of rentenmarks, which were to be convertible into paper marks at 
the rate of one rentenmark for one billion (thousand milliard) paper marks, 
was accompanied by the stabilisation of the former, and rentenmarks were 
dealt in at par (4'2105 marks = 1 dollar). 
But although the issue of the rentenmark assisted stabilisation by 
checking internal depreciation and exercising a favourable psychological 
influence, it is obvious that stabilisation cannot be brought about by this 
very indirect method of making currency convertible, not into foreign 
currency, but into some “stable value,” and based, not on the capital sum 
involved, but only on the interest. The real cause was the quite different 
action taken at the same moment by the Reichsbank in Berlin and the 
money markets abroad. Here again the machinery which really effected 
stabilisation was the use of credits or liquid assets for the purchase and sale of 
foreign currencies at a fixed rate. But with insufficient means of action, the 
Reichsbank was soon obliged to ration foreign exchange and an exchange 
premium began to appear after February 1924.