THE FRENCH FRANC

Otago Daily Times, Issue 22743, 2 December 1935, Page 9

THE FRENCH FRANC

M. LAVAL’S POLICY DEFENDED FLIGHT OF GOLD CONTINUES (United Press Association) (By Electric Telegraph—Copyright) PARIS, November 29. (Received Dec. 1, at 5.5 p.m.) “ France is ready to consider devaluing the franc to a lower gold basis if sterling and the dollar are stabilised, but she cannot align the franc with melting currencies,” declared AI. Regnier, Alinister of Finance, in defending AI. Laval’s finance policy in the Chamber. He added that the frahe was being subjected to violent attacks and every minute lost in discussing the policy increasingly endangered the currency. “ I will not devalue to please bankers, as in the event of devaluation the middle classes would bear the brunt.” AI. Regnier characterised the flight of gold since November 4 as catastrophic, and he added amid cheers that the Government was prepared to defend the franc against every attack from speculation until the last moment.

AI. Regnier was replying to a speech by M. Reynaud, ex-Miuister of Finance, favouring devaluation, in which he declared that the Government was trying to keep the gold reserves by overvalued currency, which was impossible. No Government had succeeded in doing that. M. Reynaud contended that overvalued currency disorganised the economic fabric owing to the effect on prices. He added that general currency stabilisation, extension of credits, great reductions in taxes, and even the end of the Abyssinian war were all mirages as far as the crisis was concerned. England and America had practically overcome the depression by devaluation, but France was still in the slough of misery, and unemployment was rising. AI. Blum announced that the Socialists would vote against the Government because they disagreed with the entire programme. AI. Deat, a Socialist, declared that AI. Laval’s policy was producing the danger of civil war.

M. Laval, in replying, recalled Britain’s use of economies, which he also adopted in order to overcome the crisis. He added that Britain, after four years, was able to repay the nation’s sacrifices. He believed that France would recover more swiftly. The Chamber passed a motion of confidence in the Government by 325 votes to 247, a larger majority than expected, Causing the belief that \M. Laval will bo similarly successful in other issues.