EARLIER REPORTS

Evening Post, Volume CXIX, Issue 133, 7 June 1935, Page 9

EARLIER REPORTS

THE BANK'S ULTIMATUM

CABINET-MAKING PROCESS

LONDON, June 6.

The "Daily Herald's" Paris correspondent states (hat jVL Flannery, Governor of the Bank of France, in an interview with M. Laval, Who was commissioned by the President (M. Lcbrun) to form the new Ministry, said that only if the new Government were prepared to adopt a programme, of drastic economies would the bank rediscount Treasury bills due on Juna 15, The Treasury would then be empty, financial panic would ensue, and it would be clear'" to the public that the Government was responsible for the disaster.

When the Radicals learned of the ultimatum and gathered that M. Laval's only chance of forming a Government was to accede to the bank's demands they refused their support.

M. Laval's- reply was to tell the President (M. Lebrun) that he wa» unable to form a Cabinet.

In the meantime the parties of the Left, ranging from Radicals to Communists, also became aware of the issue between the bank and Parliament.

The "Daily Mail's" Paris correspondent states that the Treasury lacks ready money, yet the Government must secure £200,000,000 before January 1, 1936, for urgent expenditure. Moreover, heavy commitments for June 15 must be faced during the next few days, and that in this connection M. Laval consulted financial experts.