FRANCE CHANGES ITS CABINET.

Auckland Star, Volume LXIV, Issue 252, 25 October 1933, Page 6

FRANCE CHANGES ITS CABINET.

Unable to balance its Budget, France has fallen back on the time-honoured policy of changing its Cabinet. How this is going to help is not apparent, but the method has the sanction of sixty years of tradition behind it. In those sixty years of the Third Republic there have been ninety Cabinets. In December last M. Herriot was replaced by M. PaulBoncour, and in January the Paul-Boncour Government gave place to that of M. Daladier. The problem of the Budget, however, remained unsolved, and seems likely to do so in spite of changes of Government. The unbalanced Budget has a deficit of some £75,000,000, and the Treasury is empty. The budgetary situation is due partly to world conditions, which have brought about an enormous shrinkage in taxi receipts in every country, and partly to State extravagance. Three courses have been proposed for meeting the deficit. The first is a drastic cutting down of expenditure and the imposition of new taxes; the second is borrowing; and the third is inflation. The cutting down of expenditure involves reducing Civil Service salaries, and is strongly opposed by the Socialists. Nobody wishes to add to the already heavy burden of taxation, and the Frenchman has a constitutional objection to paying taxes of any kind. Those who favour borrowing havo been unable to show how the money is to be raised. There is plenty of cheap and liquid money in the country, but the owners of it do not appear to be inclined to lend it to the State at the present moment. Neither the Algerian nor the Moroccan loan could be placed in France. Inflation is unpopular, because France has experienced the havoc it causes. If, however, there is to be no reduction of expenditure, no new taxes, no borrowing, and no inflation, it is difficult to see how the country can avoid the fourth possibility, which is bankruptcy. Financial reconstruction is fairly simple from a purely technical point of view. The French people are thrifty, and the money is there.