VI

EUROPE AFTER THE TREATY

22g

possibly continue. Yet it is' difficult to see how theposition can be readjusted except by a lowering of thestandard of consumption in France , which, even ifit is only temporary, will provoke a great deal ofdiscontent. 1

The situation of Italy is not very different. Therethe note circulation is five or six times its pre-warlevel, and the exchange value of the lira in terms ofgold about half its former value. Thus the adjustmentof the exchange to the volume of the note circulationhas proceeded further in Italy than in France . Onthe other hand, Italy 's " invisible" receipts, fromemigrant remittances and the expenditure of tourists,have been very injuriously affected; the disruptionof Austria has deprived her of an important market;and her peculiar dependence on foreign shipping andon imported raw materials of every kind has laid heropen to special injury from the increase of worldprices. For all these reasons her position is grave,

1 How very far from equilibrium France' s international exchange now iscan be seen from the following table :

Monthly Average.

Imports.

Exports.

Excess of Imports.

£1000.

£1000.

£1000.

1913

28,071

22,934

5,137

1914

21,341

16,229

5,112

1918

66,383

13,811

52,572

Jan.-Mar. 1919

77,428

13,334

64,094

Apr.-Junel919

84,282

16,779

67,503

July 1919

93,513

24,735

68,778

These figures have been converted at approximately par rates, but this isroughly compensated by the fact that the trade of 1918 and 1919 lias beenvalued at 1917 official rates. French imports cannot possibly continue atanything approaching these figures, and the semblance of prosperity based onsuch a state of affairs is spurious.