THE FRENCH CRISIS

New Zealand Herald, Volume LXXIV, Issue 22769, 1 July 1937, Page 10

THE FRENCH CRISIS

Fast-moving events in France have made clear the nature of the crisis that has developed there, though the clearing up of the crisis itself is another thing altogether. The new Minister of Finance has definitely demanded as open a mandate as was refused to M. Blum ten days ago. He has also revealed conditions which should make the Senate hesitate to oppose the proposal a second I time. There has been a veritable flight from the franc. Gold has been streaming from the country at an average rate of £16,000,000 a week. The Franc Equalisation Fund has been stripped of its bullion resources. A further fall in the value of the currency is inevitable. It is now something more than a reduction to a new, pre-determined parity. M. Bonnet declares that the Government will allow the franc to find its own level. That statement must be accepted with some reserve. It is not likely the franc will be allowed to go the way the German mark went in the period of great inflation. France is far too much the country

of the small rentier to tolerate a debacle during which the entire value of a life-time's savings would vanish overnight. Actually the recital of objectives in the bill now before the Senate shows that the

Government means to fight just such a possibility. By another statement M. Bonnet shows he is determined to control the situation. He declared himself determined to balance the Budget before the end of August. Its unbalanced condition has been the central factor, under Government after Government, creating general uncertainty, and particularly mistrust of the currency. If it is at last balanced, in an honest and genuine way, the first great step toward financial rehabilitation will have been taken.