France

FRENCH recovery from the effects of the war was rapid. Agriculture was never restored to its pre-war importance either in area cultivated or in production, but there was a large extension of manufacturing, the index ¹ (1913 = 100) rising from 61 in 1921 to 143 in 1929, and these were all years of increasing prosperity, and of relatively full employment. Recovery was helped by immigration, the number of foreigners in the country increasing to about three million, and in this way the grievous wartime losses of manpower were compensated. It was helped also by the “moderate” inflation. The inflation raised prices fourfold, caused the franc to fall, and provoked many dramatic financial and political crises; but it nevertheless kept the economy feverishly active, and was not large enough to bring ruin, as in Germany. The fact that the franc was undervalued in the foreign exchanges throughout this period, and even after stabilisation in 1926, was also helpful to exports, which rose in volume ² from 71 in 1923 (1927 = 100) to 101 in 1928, while imports in the same period increased only from 100 to 106. At the end of the 1920’s France was considered to be financially one of the strongest countries in the world, and much of the safety-seeking capital whose movements so damaged the world economy between 1929 and 1931 took refuge in Paris.