FINANCES OF FRANCE

Otago Witness, Issue 3774, 13 July 1926, Page 31

FINANCES OF FRANCE

ENORMOUS BURDEN OF DEBT. PARIS, July 7. In a crowded Chamber M. Caillaux (Minister of Finance) said that even if the situation were not desperate it necessitated the most rigorous measures. The internal debt amounted to 286,000,000*000 francs and the condition of the Treasury was most precarious owing to the excessive amount of short-term obligations. M. Caillaux expressed the opinion that the consolidation of these would lead to formidable inflation which would ruin ti e country’s credit and favour the encroachment of foreign capital into French undertakings. Therefore he favoured the vr®a tion of a Management Fund maintained by foreign credits. The external commercial debt amounted to 18,945,000,000 francs and it would be impossible for France to continue to pay 4,000,000,000 francs annually for the interest and the repayment of this debt if the pound sterling continued to rise and the more favoured countries did not give France credits. Continuing, M. Caillaux declared that though the Budget balanced in 1926 it was necessary to begin to repay the advances made by the Bank of Franoe, consolidate the short-term debt, and increase the salaries of the underpaid State employees. Those projects would require three milliard francs extra revenue. M. Caillaux revealed that the Treasury bank balance at present only amounted to half a milliard francs, and would be less but for the sale of part of the Morgan loan. Ho concluded with an impassioned adjuration to the Chamber not to act like an exhausted soldier and throw down the knapsack, but to make a determined effort to restore the country’s finances. The debate promises to be the most important since the war. FALL OF THE FRANC. PARIS, July 8. Considerable excitement has been caused in financial circles owing to the heavy fall of the franc to 193 to the pound sterling. The new crash is reported to be due to the advene balance sheet published by the Bank of France showing that the Government at the present rate of exchange is within dangerous proximity to the fatal figure which will end borrowing from the bank and also within £20,000,000 of the limit to which it is possible to go without farther parHefly&y spftiu.. or more

tfRANC GREATLY BELOW PAR. PARIS, Julv 9. The fate of the new Government is iq the balance, and it is agreed that to-day’s debate will be decisive. It is estimated that the Government can rely on 230 votes but the dubious factor is the attitude of the Moderates under M. Marin, who havs not yet participated in the debate. Mean, time the francs in London are rather better, the French being quoted at 187.37 and the Belgian at 199.25. A SIGNIFICANT REPORT. PARIS, July 9. It is reported in German financial quarters that an international finance conference is shortly to be held in Berlin. It is stated that France is disposed to make concessions to Germany if the Reichbank will join the Anglo-American efforts to stabilise the franc. IMPORTANT FINANCIAL DECISION. LONDON, July 10 The franc to-day depreciated to 188. M. Caillaux is expected to fly to London to meet Mr Chamberlain on Monday. CONFIDENCE IN THE GOVERN. MENT. PARIS, July 10 The Chamber of Deputies adopted * motion of confidence in the Government by 262 votes to 247 votes. ACTION BY MINISTER OF FINANCE. PARIS, July 10. Following the vote Le Temps states that M. Caillaux proposes to introduce immediately a Bill containing only one clause substantially authorising the Government to take by decree all necessary measure* to maintain the equilibrium of the Budget and the stabilisation of the franc. 'Hie Annex Bill contains the list of the measures it is proposed to enforce. EXTRAORDINARY POWERS REQUIRED. PARIS. July 10. Before the Chamber voted confidence in the Government, M. Caillaux declared that the Washington debt agreements, also foreign loans, were necessary to France’* personal restoration. He explained tha extraordinary powers the Government required, not to enforce the imposition of taxes without the consent of Parliament, but merely as a simplified and accelerated procedure. M. Caillaux is flying to London on Monday to pursue the debt conversations with Mr Churchill.