With a public debt of 233,729 million of francs (about £9,300,000,000, at the pre-war rate of exchange); with the permanent problem of a declining population accentuated by the loss of millions of men killed and wounded in the war, and complicated by the importation of coloured labour; with the exchange value of the franc reduced to sixty in terms of the British pound, and to fifteen in terms of the American dollar,[127] the position of victorious France in the hour of her complete military predominance over Europe seems wellnigh desperate. She could of course secure very considerable alleviation of her present difficulties if she would consent to the only condition upon which Germany could make a considerable contribution to Reparations; the restoration of German industry. But to that one indispensable condition of indemnity or reparation France will not consent, because the French feel that a flourishing Germany would be a Germany dangerous to the security of France. In this condition one may recall a part of _The Great Illusion_ case which, more than any other of the 'preposterous propositions,' excited derision and scepticism before the War. That was the part dealing with the difficulties of securing an indemnity. In a chapter (of the early 1910 Edition) entitled _The Indemnity Futility_, occurred these passages:-- 'The difficulty in the case of a large indemnity is not so much the payment by the vanquished as the receiving by the victor ... 'When a nation receives an indemnity of a large amount of gold, one or two things happens: either the money is exchanged for real wealth with other nations, in which case the greatly increased imports compete directly with the home producers, or the money is kept within the frontiers and is not exchanged for real wealth from abroad, and prices inevitably rise.... The rise in price of home commodities hampers the nation receiving the indemnity in selling those commodities in the neutral markets of the world, especially as the loss of so large a sum by the vanquished nation has just the reverse effect of cheapening prices and therefore, enabling that nation to compete on better terms with the conqueror in neutral markets.'--(p. 76.) The effect of the payment of the French indemnity of 1872 upon German industry was analysed at length.