Word: franc
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...very pleasant," said French Finance Minister René Mayer one day last week, "to cooperate with a man who has as sane ideas as Sir Stafford Cripps." Nonetheless, he was not taking all Sir Stafford's ideas. This week, despite Crippsian objections, the French devalued the franc in a way that, Cripps thought, threatened the pound...
...French had simply made up their minds to stop biting off their noses. With the franc artificially pegged at 119 to the U.S. dollar (when its real value was closer to 340 to the dollar), the French were losing too much world business. If people with dollars could get more francs with them, they could buy more of what France had to sell, from cognac to Citroens. Also, by offering more francs for a dollar, Mayer hoped to lure out of hiding hoards of gold and dollars, valued at hundreds of millions...
Except for the assurance that France would try to stop cheapening of the pound, the French went ahead with the" Mayer plan. They pegged the "official franc" at about 214 to the dollar for use in the export-import trade, planned to set up a free market for trading in dollars...
Underlying the squabble about the "sudden" devaluation of the French franc is a simple economic problem. French exports necessary to bring in dollars have been priced out the market by a combination of slowed-down inflation and a tight currency exchange. To start the mills rolling again, the French Cabinet decided to cut the value of the currency...
...British have objected from fear that the free-market which the French propose for the franc will inevitably affect the pound adversly. If large amounts of pounds flow through Paris, the British government feels that it will also have to devalue, making foreign commodities more expensive at a time when exports are beginning to climb to a level high enough to cover imports...