‘Too Late and Too Little?’

When in 1936 France abandoned the gold parity of the franc fixed eight years earlier by M. Poincaré, there followed a series of mini-devaluations and spells of depreciation. The French Finance Ministers that followed each other in close succession were all fighting desperate rearguard actions against a drastic adjustment of the franc to a level at which it would have become tenable in spite of domestic inflation. They delayed every downward adjustment until it became inevitable, and then they kept down its extent to the minimum. Each of these mini-devaluations was condemned by Paul Reynaud, the leading financial expert in French politics in the ’30s and later Finance Minister and Prime Minister, as having been ‘too late and too little’. That self-same verdict came to be repeated many times in many countries after the war. It will no doubt serve as the appropriate epitaph for Mr Nixon and for Mr Connally. They will go down in history as having inflicted incalculable harm on the United States and on the free world by their ill-advised policy preventing a timely and adequate adjustment of the dollar.