io8

ESSAYS IN PERSUASION

PART

only temporary set-backs. What more couldthey have done?

I will tell you. The great army of yourpredecessors have failed, in spite of all theirefforts, to depreciate adequately the internal-purchasing power of the franc. Your presentdifficulties are due, not to the inflation of thenotes or to the fall of the exchange (for theseevents are tending all the time to help you outof your troubles), but to the failure of thesefactors to diminish proportionately the in-ternal purchasing power of the rentier’s moneyclaims.

The following figures present the essenceof your problem. In December 1925, thegold value of the franc on the foreign exchangeswas 19 per cent of its pre-war parity; worldgold prices were about 158 per cent of theirpre-war level; therefore on the pre-war basisa note circulation and a franc price levelamounting to 830 per cent (for 158-^19 =8-3)of their pre-war figures would be justified.Now the note circulation, being about 1000 percent of its pre-war figure, roughly correspondsto the level of the foreign exchange—though,allowing for increased territory and the lossof gold and silver coin from the circulation,it is probably still too low in relation to theexchange, rather than too high, on a pre-warcomparison.

When we come to the internal franc pricelevel, on the other hand, we find an entirelydifferent story. Imported raw materials have