FRENCH CRISIS

Hawera Star, Volume XLVIII, 6 April 1925, Page 5

FRENCH CRISIS

CABINET’S INSECURE POSITION

CAPITAL LEVY PROPOSED

TO RESTORE NATION’S FINANCES

BY CARLE—PRESS ASSOCIATION —COPYRIGHT

' ' PARIS, April 4. Following the hostile reception accorded the Government’s finance proposals and the resignation of the Minister (M. Clementel),. the Government’s hold ■on office isN,regarded as very Fiscal measures recommended by M. Clementel as Minister for Finance before his resignation, including a 50 per cent,, increase in income-tax, nave been dropped. The Government is resolutely opposed to any increase in the note circulation, but in order to provide tlie Treasury with the necessary funds probably the Government will ask the authority ol Parliament to introduce a capital levy, payments to spread over ten years. While Cabinet at one time yesterday morning was on the point of resigning —some reliable sources affirm such a decision was actually reached—it appears that M. Heriot, fortified by the co-operation of M. Demozie, is now determined to face the music. One report even says it may not last more than three or four days, but on the other- hand it is thought that M, Herriot will obtain a majority on Tuesday. Toe real battle-begins when the new financial measures reach the Senate. If M. Herriot falls it will_ lie the fulfilment of a prophesy when bis G-o-yernment assumed office that it would disappear on either a financial or a religious question. It appears that Thursday night s scenes were most dramatic. M. Herriot’s intervention in the Senate evoked only cries of “Get out! We have had enough of. you.’’ M. Herriot and M. Clementel later in a- private room exchanged furious words with mutual accusations. During the all-night conferences the electric fight failed, and only the glowing tips of cigarettes showed where the Ministers sat sleepy. Ushers went, to seek candles, and stuck these in bottle necks. In this eerie light ..the Ministers continued to thrash out France s financial future until 5 o’clock, when tagged, weary statesmen emerged, turned up their collars and went home. It is believed that the Government’s capital levy plan will compel owners of property to give State mortgages corresponding to. the vane of their estates. The mortgagor thereafter will be obliged to pay the State the value of the mortgage during a < prescribed period, probably ten years. All the indications are that the Senate will reject any scheme for a capital levy. M. Herriot must then decide whether to accept the decision or resign. ' RUSH ON BANK. LONDON, April 4. The Paris correspondent of the Financial Times says the dread of a capital levy caused a rush oil the banks and monev changers. The public demand for sterling, dollars, Swiss francs and Dutch florins was so great that many offices ran out of foreign currencies before noon. • Pound notes for cash brought to 94.20 francs. LEVY ON CAPITAL. PARIS, April 4. In the Chamber, M. Herriot relused to- make a statement .regarding M. Clementel’s resignation. In the afternoon lie obtained an adjournment sine cbe by interpellation, which made it a question of confidence, only Communists opposing it! The i’reimer foreshadowed a -Rill embodying reform to set the country’s finances on their feet. Ironical Opposition laughter greeted his opinion i.hat this alone would assure the revalorisation of the franc and a fall in the cost of living. The Chamber adjourned till Tuesday. M. Herriot, speaking at a party meeting later, said the principles governing the elaboration of the Government’s schemes consisted principally of a sort of capital levy, which would more particularly affect acquired weaJth while avoiding interfering with wealth in the course of formation. .According to Le Temps the proposed capital levy will be 10 per cent., payable over'a decade, with f acilities for settlement in advance. Impartial observers, however, anticipate an early political crisis resulting- in a dissolution and fresh elections. Le Temps confirms the statement that M. Loucheur declined the position of Finance Minister before M. Demonzie accepted. THE NEW MINISTER M, Demonzie, the new Finance Minister. is a barrister, aged 45. He is a member of the group in the Senate known as the Gauche Demoeratique. He was the principal initiator -of the resumption of trade relations with Russia and is opposed to the abolition of the Embassy at the Vatican. It is reported that his acceptance of office is conditional, the Government adopting a compromise by which the Charge d’ Affaires representing A 1 saee-Lrirraino at the Vatican will care for the interests of the rest of France. TEST.ON TUESDAY. LONDON, April 5. No fresh developments in the French crisis is expected until Tuesday, Meanwhile interest, centres in the Senatorial election for the Seine Department to-dav, where M. Millerand (exPresident) is the Opposition candidate for the seat, which was formally held by a Government nominee. It is generally believed that his election would be a severe blow to the Government.