Archival Currency Converter 1916–1940

Copyright and disclaimer

Copyright © 2019 David Challis. All rights reserved. This work may be used if proper credit is given.
Please use the following citation:

David Challis, Archival Currency Converter 1916–1940, https://canvasresources-prod.le.unimelb.edu.au/projects/CURRENCY_CALC/

Notice: The information contained in the Archival Currency Converter 1916–1940 is accurate as at 1 March 2019. Changes in circumstances after this time may impact on the accuracy of the information. David Challis gives no assurances for any information contained in the Archival currency conversion application after that time and makes no commitment to update it.

Notes relating to the data contained in the Archival Currency Converter 1916–1940:
The data used in the Archival Currency Converter 1916–1940 was sourced from the archival United States of America Federal Reserve Bank report titled, ‘Section 11: Currency’ in the Banking and Monetary Statistics, 1914 – 1941. This report can be found at: FRASER®, Federal Reserve Archives, Federal Reserve Bank of Saint Louis.
https://fraser.stlouisfed.org/scribd/?toc_id=334470&filepath=/docs/publications/bms/1914-1941/BMS14-41_complete.pdf&start_page=403#scribd-open, (accessed 1 March 2019).

The data points used in the Archival currency converter were calculated using the monthly exchange rates between the US dollar and various other currencies as recorded in the above US Federal Reserve Bank report between 1916 and 1940. The original pages from this report for the United States dollar foreign exchange rate against the Argentinian peso, Australian pound, Brazilian milreis, French franc, German mark, Japanese yen and British pound are shown below.

These exchange rates were used to calculate the arbitrage free exchange rate between the French franc and the Argentinian peso, Australian pound, German mark, Brazilian milreis, Japanese yen and British pound. For example, using the month of January 1916:

• The US dollar rate against the French franc was 17.1045 US cents per franc or 5.8464 francs per US dollar.
• The US dollar rate against the British pound was 476.80 US cents per pound or 4.768 US dollars per pound.
• Therefore the arbitrage free exchange rate (known as a ‘cross rate’) between the French franc and the British pound was 5.8464 * 4.768 = 27.8757 francs per British pound.

Note that the physical exchange of gold under the International Gold Standard did, on occasions, give rise to arbitrage margins occurring between various currencies. These margins are not reflected in the numerical data which are representative of 'official' exchange rates only.

It is also important to note that each of the currency reports used from the Federal Reserve Bank 'Section 11: Currency' report have individual notes regarding the quotations that were used when gathering the data between 1916 and 1940. The currencies used in the Archival Currency Converter were not subject to structural changes during the period between 1916 and 1940 except the German mark which presents a number of structural complications. The Goldmark was replaced by the Papermark on 10 April 1917 which in turn was replaced by the Riechsmark on 28 October 1924. As a result of the incidence of hyperinflation in Germany the exchange rate for the Papermark was dramatically devalued in the period between July 1923 and October 1924 meaning that the recorded exchange rates could not be sensibly used in the Archival Currency Converter. In addition, no data was recorded by US Federal Reserve for the Papermark in the period between May 1917 and August 1919 presumably due to hostilities in the First World War.