FACING FACTS IN FRANCE

New Zealand Herald, Volume LXXV, Issue 23123, 23 August 1938, Page 8

FACING FACTS IN FRANCE

Once again the French people are being warned that precautions must be taken against a currency and financial crisis. The Prime Minister, M. Daladier, has pointed out, in a broadcast address, the disastrous results that would follow a further devaluation of the franc, accompanied by exchange control. The actual level of the franc has been steady during the past few days, in which hints of a crisis have been heard, but in view of M. Daladier's grave statement, its maintenance at the official level must be causing an increasing strain on the Equalisation Fund. As a means of relief the Prime Minister promises measures to increase revenue and balance the Budget without deflation. How far he can counteract the results of a considerable period of inflationary influences without some degree of deflation remains to be seen. Meanwhile he is. offering terms to private industry, with the obvious objective of fostering confidence and stimulating general business activity. Revision of the 40-hour week to make its operation more flexible is .mentioned in connection with war industry only, but it must be remembered there have been modifications of it in other directions already. The Government proposes also to encourage investment in industry by* lightening taxation and by keeping out of the long-term loan market. Thus there is a further retreat from the policy of spending a way into prosperity inaugurated by M. Blum and his Popular Front Government in 1936. That policy is so similar to the one pursued in New Zealand for a slightly longer time that a turn of fortune's wheel—a drastic fall in overseas prices, for instance —could speedily put this country into the place France now occupies. In fact M. Daladier's warning to France needs practically no modification to be a warning to New Zealand.