1928

The franc germinal is replaced by the franc Poincaré in France

After World War I, the franc floated on the foreign exchange market and depre­ciated. This deteri­or­ation in the pur­chasing power of money was due to war and recon­struction expenses, the rise in public debt and the trade balance deficit. Thanks to the policy con­ducted by Raymond Poincaré, the franc sta­bilized on the foreign exchange market in 1926. A debate then took place between advocates of a revalu­ation of the franc to its pre-​​war level (franc ger­minal) and those in favor of a devalu­ation of the franc to its real value. In 1928, the Poincaré gov­ernment chose to devalue the franc by 80%: the « franc Poincaré » was only worth a fifth of the gold equi­valent of the franc ger­minal. A new law par­tially re-​​established the con­vert­ib­ility of bank­notes into gold: this system was known as the « gold bullion standard » where gold bullion was sold at a fixed price in exchange for bank­notes at the Banque de France.