Foreign Exchange rates 1913-1941 #2: The currency Upheavals of the Interwar PeriodApril 6, 2014

Last week, we started to look in ~ the history of currency values in the 1913-1941 period. I’m still not certain this will be worthwhile, however the initial results were relatively interesting.

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March 30, 2014: foreign Exchange prices 1913-1941: simply Looking in ~ the Data

France:The french franc was another significant currency of the time, with what one might call a “leadership role” in money affairs. In other words, other countries would react to or imitate what France was doing. So, let’s take it a look.


This shows the variety of U.S. Cent per french franc. The franc lost a most value throughout WWI and soon afterwards, much too lot to allow the franc’s value to be raised back to its prewar parity, together was the case in the U.S. And Britain. It was repegged to gold in late 1926, in ~ a devalued rate. The franc was devalued in 1936 — fairly late, complying with Britain in 1931 and the U.S. In 1933 — and also as we check out it never ever really stabilized again, yet continued to shed value into WWII.



I pointed out previously that Belgium’s history mirrored France’s, therefore here’s the worth of the Belgian franc/belga vs. The French franc. Remember, the belga money was presented when the Belgian franc was repegged come gold, likewise in 1926 together with France. However, the belga was worth 5 prior Belgian francs, so that rise in value is really simply a redenomination. It shows up that the belga’s gold value after 1926 (taking right into account the 5:1 redenomination) was much less than the French franc’s yellow value, however, together it to be worth a tiny less than 4 French francs — a sort of devaluation you can say.

Belgium devalued in April 1935, no doubt setting the political criterion for France to carry out the same a year later. However, the Belgian franc maintained its worth (vs. Gold) after ~ the 1935 devaluation, while the French france sank into the depths.

British India:


India was British in those days. I think the silver coins to be in widespread use in landscape India in those days, as was the instance in China together well. However, the brothers overlords additionally maintained a rupee currency which, not surprisingly, was attached to the british pound. Thus, it to be devalued in 1931 together with the brother pound, and again in 1939. This was actually fairly significant, because India developed a most commodity goods for world export, significantly cotton and also cotton cloth.


The Bulgarian lev preserved its value vs. Yellow throughout the 1930s. Funding controls were imposed start in April 1932. Ns seem to remember the there to be hyperinflation in Bulgaria soon after WWI, which is perhaps why our data here begins in 1921.


Not surprisingly, Canada’s background amounts come a mix of British and U.S. Influences. The Canadian dollar shed some value during WWI, and also was went back to its former gold standard parity in 1925, along with the brothers pound. The Canadian dollar was devalued in 1931, together with the brother pound. However, the Canadian dollar to be stabilized vs. The U.S. Dollar (and therefore gold) afterwards, much more so 보다 the pound, which was much more of a floating currency. An additional devaluation in 1939 mirrors the of Britain.

Beginning in in march 1940, Canada list an “official” rate and a “free” rate. The two are around the same, however. The complimentary rate is shown.


The Chilean peso lost a lot of value throughout WWI, like the French franc, and was repegged to yellow in late 1924. It to be devalued in might 1932, after the british devaluation however not coinciding through it. However, ~ that, the peso was properly repegged come gold, even maintaining this while the U.S. Dollar to be devalued in 1933. An additional devaluation in January 1935 returned the peso/dollar price to about its 1932 level. Apparently, Chile chosen the “competitive advantage” indigenous the 1932 devaluation vs. The USD, and wanted come return that after the U.S.’s 1933 devaluation. It’s a common pattern of the time. Funding controls were imposed beginning in April 1933. Native November 1937, over there is one “official” price (shown) and also an “export” rate, i beg your pardon is around 22% reduced in value.

Adding it all up, the peso shed a most value from whereby it was at the beginning of WWI (not presented here).


Chinese largely used a metallic money during many of this time, which had been the case since the please of document money in the Ming dynasty. In other words, they offered silver coins, and any other form of silver on metallic weight. The tael to be a usual measure in China, back the Mexican silver dollar was likewise popular. There was a file yuan as well, which has actually a 1:1 parity with the Mexican silver dollar coin.

Thus, the variability of the yuan/dollar price basically reflects the variability of silver vs. Gold during this time. However, as we have the right to see, the paper yuan was connected to yellow in 1935, transitioning to a gold basis native a silver- basis. This didn’t critical long, as the record yuan to be devalued in 1938, as it was printed to fulfill the needs of military spending in the challenge of the Japanese invasion.

Now you can see why Chinese human being preferred steel coins. When you space using a steel coinage-based currency, you will normally tend in the direction of silver instead of gold, because gold is of as well high a worth for usage in coinage exclusively, there is no some kind of lower-denomination adjunct. This to be fine because that a long time, and formed the basis of “bimetallic” systems approximately the world. Silver and gold were basically 2 versions of the exact same thing, due to the fact that their industry value stayed in a trustworthy range. The is why I take into consideration bimetallic systems to be “gold typical systems,” which might confuse some human being who don’t recognize this history. Civilization at the time thought about them to be gold-based systems too. However, start in the 1870s, this ruptured for the an initial time in history, i beg your pardon drove many of the people to monometallic gold-based systems. Chinese and also Indians stuck with silver coins.

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For some reason, I uncover this weird satisfying. That is nice to gain an idea of what was going on during that time.