FINANCES OF FRANCE.

New Zealand Herald, Volume LXII, Issue 18949, 21 February 1925, Page 9

FINANCES OF FRANCE.

AVERTING A CRISIS. DILEMMA OF PREMIER. CAPITALISTS' DEMANDS. By Telegraph Press Association Copyright. (Received 5.5 p.m.) A. find N.Z. LONDON. Feb. 10. file Paris correspondent of the Labour paper, tho Daily Herald, in reviewing the political situation in France, says it resembles that which existed on the eve of the last general elections in Britain. The common fear of Socialism, and the open or veiled threats against private fortunes, have reunited the two great capitalist groups. One of these, the Comite des Forges, is seeking to establish a Franco-German oligarchy through the control of the steel ar.d coal industries, The other group, the radical bankers, who are associated with the light metal industries, and who have supported the Left wing bloc in the past, are, on the other hand, opposed to a Franco-German trust. Owing to the Socialists' programme, however, both groups have sunk their differences, says the correspondent, and are confronting the Premier, M. Herriot, with a demand that he shall abandon tho Socialists and govern with the aid of tho members of the Right. If M. Herriot refuses this demand, the financial crisis will bo accentuated. '1 he recent fall of the franc, and its restoration by the State selling foreign securities, were the first steps. Worse trouble lies ahead, the correspondent predicts, as 22,000,000,000 franco of national defence bonds are due for reimbursement or renewal this year. If there is a panic, investors will demand reimbursement. Ihis will necessitate inflation on an enormous scale if the Government abandons the taxation of wealth. With an increase in the income tax and a generous expenditure on social reform, however, the correspondent expresses tho opinion that the skeleton of a financial crisis will disappear into its cupboard.