The price of imported commodities, when converted at the current rate o exchange, is far in excess of the local price, so that many essential goods will not be imported at all by private agency, and must be provided by the government, which, in re-selling the goods below cost price, plunges thereby a little further into insolvency.

The bread subsidies, now almost universal throughout Europe, are the leading example of this phenomenon.
The countries of Europe fall into two distinct groups at the present time as regards their manifestations of what is really the same evil throughout, according as they have been cut off from international intercourse by the Blockade, or have had their imports paid for out of the resources of their allies.

I take Germany as typical of the first, and France and Italy of the second.
The note circulation of Germany is about ten times[146] what it was before the war.

The value of the mark in terms of gold is about one-eighth of its former value.

As world-prices in terms of gold are more than double what they were, it follows that mark-prices inside Germany ought to be from sixteen to twenty times their pre-war level if they are to be in adjustment and proper conformity with prices outside Germany.[147] But this is not the case.