ABSTRACT
The war years saw the end of the gold standard when its two basic requirements, interconvertibility between paper money and gold and the free export of gold, were suspended. Initially, most of the belligerent countries were able to maintain adequate gold reserves and familiar exchange rates, chiefly by taking gold coins out of domestic circulation and concentrating them in official hands. As the years passed, however, it became increasingly difficult for the warring nations to support the pre-war pattern of exchange rates. For Britain and France the difficulty was overcome finally by the receipt of American loans, following that country’s entry into the war early in 1917. Lacking such support, the German and Austrian exchanges were in a state of collapse by 1918. But for most countries, including the United States, Britain and the Empire, France, Italy, the Netherlands, Spain, Sweden, Japan, Argentina and Brazil, exchange rates at the end of the war diverged remarkably little from the pre-war pattern despite the upheaval of the previous four years.
