FRANC. A French coin current at different periods and of varying values. The first coin so called was one struck in gold by John II. of France in 1360. On it was the legend Johannes Dei gracia Francorum rex; hence, it is said, the name. It also bore an effigy of King John on horseback, from which it was called a franc a cheval, to distinguish it from another coin of the same value, issued by Charles V. on which the king was represented standing upright upon a Gothic dais ; this coin was termed a franc a pied. As a coin it disappeared after the reign of Charles VI., but the name continued to be used as an equivalent for the livre tour nois, which was worth 20 sols. French writers would speak with out distinction of so many livres or so many francs, so long as the sum mentioned was an even sum; otherwise livre was the correct term, thus "trois francs" but "trois livres cinq sols." In 1795 the livre was converted into the franc, at the rate of 81 livres to 8o francs, the silver franc being made to weigh five grammes.
The franc is now the unit of the monetary system and also the money of account in France, as well as in Switzerland. In Italy, until the end of 1927, the lira was nominally equivalent to the franc, and in Greece the drachma is still nominally equivalent. The franc is divided into zoo centimes, and the drachma into 500 lepta. Other currencies which are nominally equivalent to the franc are the peseta (Spain), the leu (Rumania), the lat (Latvia), the dinar (Yugoslavia), and the leva (Bulgaria). Until compara tively recently, Belgium used the franc, and even during the post war depreciation, the two currencies for long fluctuated upon par allel lines. In 1926, for the sake of simplicity, a new unit, the belga, was introduced for purposes of international exchange. Thirty-five belgas equal one pound at parity, so that one belga is the equivalent of five francs. The franc is still used internally, but is not equivalent to the French and Swiss franc.
At the outbreak of war, the franc was at its par value of 25.22 to the pound or 5.18 to the dollar. It was "pegged" during the war, but after the Armistice was left to find its natural level. The inflation boom of 1919-20, the strain put upon the French finances by the war and the reconstruction of the devastated areas, and the failure and inability of Germany to pay reparations, all in turn contributed to its steady depreciation, only broken from time to time by periods of hectic recovery. Such occurred in 1924, when the Government of the day obtained foreign credits and, by selling dollars and sterling on the Paris Bourse, rapidly drove the exchange from f rs.12o to frs.67 to the pound. A subsequent collapse was accentuated in April 1925 by the news that the note issue had surreptitiously exceeded its legal limit.
In the middle of 1926, the franc was at last taken in hand. The national finances had been eased since 1926 by the success of the Dawes scheme as a begetter of reparations, and a stable govern ment attained power. Acting on the advice of their Currency Commission, they cleared the ground by the end of 1926 for de facto stabilization at about f rs.12o to the pound or 25.51 to the dollar. This rate was maintained for a time, and in June 1928 the franc was stabilized at 124.2134 to the £ (25.52 to the dollar) . Later, the partial collapse of French trade and the departure of England and the United States from the gold standard altered the ratios. On Dec. 1o, 1935 they stood at frs.74.81 to the pound or 15.71 to the dollar. In the autumn of 1936 by agreement between France, Great Britain, and the United States the franc was deval ued to 107 to the L, and the exchange left to find its own level; an exchange equalization fund of ten thousand million francs was instituted, but in May 1938 a further devaluation to 179 frs. to the £ was effected, and except on Sept. 28, 1938, when it touched 18o, this has not since been exceeded. On Dec. 8, 1939, the franc stood at 176.5 to the f (about 38 to the $). (See also CURRENCY.)