m THE MARK EXCHANGE 95

in value. Some foreign investors in marks began totake fright and, so far from increasing their holdings,sought to diminish them. And now at last theGerman Government was called on to make importantcash payments on Eeparation account. Sales ofmarks from Germany , instead of being absorbed byforeign investors, had now to be made in competitionwith sales from these same investors. Naturally themark collapsed. It had to fall to a value at whichnew buyers would come forward or at which sellerswould hold off. 1

There is no mystery here, nothing but what iseasily explained. The credence attached to storiesof a " German plot " to depreciate the mark wilfullyis further evidence of the overwhelming popularignorance of the influences governing the exchanges,an ignorance already displayed, to the great pecuniaryadvantage of Germany , by the international craze topurchase mark notes.

In its later stages the collapse has been mainlydue to the necessity of paying money abroad indischarge of Reparation and in repaying foreign in-vestors in marks, with the result that the fall inthe external value of the mark has outstript anyfigure which could be justified merely as a conse-quence of the present degree of currency inflation.

1 Any one, who can fully persuade himself of the unalterable truth ofthe proposition that every day the sales of exchange must exactly equalthe purchases, will have gone a long way towards understanding thesecret of the exchanges.