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German foreign trade was based on bilateral arrangements. This had worked well enough so far, but it had the disadvantage that one was tied to a particular partner and could not start importing at will from some other country that might for a time have more of the commodity in question. Hence the bilateral system must be enlarged into a multilateral one. By manipulating prices vis-á-vis the offset-account countries it was possible at the same time to manipulate the currency. This applied to offset transactions in Europe. In international overseas trade, however, a free currency was necessary.
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