The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo. FRIDAY, MARCH 14, 1924. THE FRANC AND THE FRENCH.

Auckland Star, Volume 55, Issue 63, 14 March 1924, Page 4

The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo.

FRIDAY, MARCH 14, 1924. THE FRANC AND THE FRENCH.

~- ■ ■ > * For the cause that lacks assistance. For the xcrong that needs resistance, For the future in the distance, And the good that ice can do.

In that she lias friends ready to come to the assistance of her falling exchange France is more fortunate than Germany. We must not, of course, attribute wholly to sentiment the assistance that Now York and London have given, t bough sentiment was probably a considerable factor in the decision. For practical reasons London and New York—particularly London —are much concerned about the state of the franc; they cannot afford to see the franc go the way of the mark. The franc recovered at once when these credits were provided, for the reason that the French national credit was strengthened. France is in i the position of R man who at the I moment his credit is (ottering has a thousand pounds or live thousand pounds placed to his account in the bank. .At.once people are more ready to do business with him. But there must he a limit to the effect of such buttressing of French credit. If (lie money placed to the credit of the private person whose case we have cited is a legacy lie will he better off than if it is a loan. The credits given to France, however, are loans, and one of the fundamental causes of the decline of the franc is that French finance has depended too much upon loans and not enough on taxation. France may be materially helped by her friends, but those friends cannot save her. She must save herself. The franc is "sliding because the Government policy and outside circumstances have destroyed the country's credit. Absolute reliance has been placed upon the ability of Frnnce to extract money from Germany; millions more have been spent than the. taxpayers provided; budgets have been balanced by loans. Now, however, investors have lost faith in the franc and in the Government, and only drastic measures of taxation and economy can stabilise the franc permanently. While the world watches with anxiety the movement of the franc, it will watch with interest the effect of its movement on the fortunes of M. Poincare. That statesman has dominated France and Allied policy towards Germany ever since the fall of jM. Briand. He has surmounted many difficulties, but those that now encompass him will try his courage and resource. A few weeks ago the triennial elections to the Senate were held, and resulted in M. Poineare's favour. The .Senate, however, is not the popular assembly. Senators are not elected directly by the people, ancl only a third of the members po up for election at a time. Elections for the Chamber of Deputies arc much more exciting, and thoy are to lie held shortly. The time could hardly be less opportune. M. Poincare will go to the country, not only as a. Premier responsible for heavier taxation and drastic retrenchment, but as one whose promises have come to naught. He promised the people a huge German indemnity. They have not got that indemnity, but they have got higher prices, a currency declining in alarming fashion, and more taxation. lie will have to meet opposition led by able and experienced men like M. Briand and M. Painlevc, who are attacking not only his domestic policy, but his attiC-dc towards Germany. It has been said over and over again that Franco was solidly behind M. Poincare in his German policy. If it was, this was mainly because the French people believed that the full reparations claimed could be obtained. When they .find out that this is an illusion and that following it has brought the franc down to twopence, it may go hard with M. Poincare.