MUST HAVE SOUND FINANCE

Timaru Herald, Volume CXLIII, Issue 20768, 1 July 1937, Page 9

MUST HAVE SOUND FINANCE

FRENCH POLICY OUTLINED HINT OF DEVALUATION OF FRANC INSISTENCE ON BALANCED BUDGET United Press Association—By El trie Telegraph—Copyright (Received June 30, 7.30 p.m.) PARIS, June 29. In the Chamber of Deputies, the Minister of Finance (M. Bonnett) said: “I am determined to balance the Budget before the end of the year." He insisted that France no longer had the choice of various solutions. She must give the present Cabinet full powers and stop the drain of gold from the country. The maintenance of European peace depends on a strong France and to be strong France must have healthy finances. Startling figures, showing France’s financial plight were given, by M. Bonnet (Minister of Finance) before the vote on his proposal in the. Senate which was ultimately approved by 20 to 15, with eight abstentions. M. Bonnet revealed that £47,250.000 worth of gold had left the country between January 6 and June 22, and £22,250,000 of gold between June 23 and yesterday. There was only £182,000 in hand that morning, and the Government was obliged to borrow £3.636.000 from the Autonomous State Fund. He proceeded to state that it was impossible to maintain the franc at the present rate. The Government proposed to allow the franc to find its own level. He revealed the fact that the Franc Equalisation Fund no longer

has gold on hand. The Bill The Finance Bill consists of one clause: “The Government is authorised until, August 31, to take by decrees previously adopted by the Council of Ministers, and all measures to assure the suppression of attacks on State credit, to fight against speculation, to assure economic recovery, to control prices, to balance the budget and defend the gold reserve, and without control of the exchanges. The decrees will be submitted to the Chamber for ratification within three months of publication of the present law.” PROPOSALS APPROVED RUSH THROUGH PARLIAMENT PROPOSED United Press Association—By Electric Telegraph—Cnnvrtpht PARIS, June 29. The Cabinet has approved M. Bonnet’s finance proposals, which will be rushed through Parliament in 24 hours. A meeting of the Radical Socialists expressed absolute confidence in the Government. The Socialists have not decided their attitude. Before a crowded Chamber of Deputies, the Prime Minister, M. Chautemps read a Ministerial statement. He announced that he would not leave the Chamber or Senate until the necessary Bills were approved. The Prime Minister declared that he held a decree for adjourning Parliament. He asked the Chamber to postpone the debate on the general policy, and proceed with the Bills granting the Government full powers. The Chamber passed a vote of confidence by 393 to 142. The sitting was-suspended to allow the Finance Committee to examine M.

Bonnet's proposals. Startling Remedies M. Bonnet is. reported to have told the .Finance Committee,..that he will meet the. Treasury obligations during the year, at least partly, by raising the upper limit of the Government’s current account with the Bank of France by £106,000,000 to £150,000,000. Heavy Budget Deficit Tlie Minister said the ordinary Budget showed a deficit of £70,000,000, which will be co.vered by new taxation. It is regarded as . certain that if the (government wishes. it will be able to devalue further, if necessary. UPROAR IN CHAMBER United Press Association—By Electric Telexranh —Convrtßht (Received June 30, 6.30 p.m.) PARIS, June 30. The session of the Chamber of Deputies reopened this evening. M. Schmidt (Recorder for the Finance Committee) stated that the Government's financial proposals had the full support of the United States and Britain. It is believed the Government contemplates a fall of the franc from 110 to 125 francs to the £. M. Schmidt added that the Government proposed an increase in the income tax and certain indirect taxation and railway rates. Communist Protests The Chamber of Deputies was suspended at 1.30 a.m. owing to Communist disorder. The Deputies immediately raced to the refreshment room where angry arguments culminated in fistfighting between the Communists and the Right Wing Deputies, who were separated by the Sergeant-at-Arms. When the Chamber of Deputies resumed at 2 a.m. the Right Wing members demanded the suspension of the Communist fighters. This caused pandemonium with members of the Chamber screaming insults at each other. Feeling ran so high that M. Herriot again suspended the sitting. Explanation Refused When the Chamber of Deputies resumed the Communist leader (M. Ramadier) asked to be allowed to speak, but M. Herriot refused, declaring that the Chamber of. Deputies had more important things to do. This caused further uproar, and another short suspension of the sitting. Subsequently the Chamber of Depu-

ties adopted the Finance Bill by 380 votes to 228. The Bill now goes to the Senate. It is expected that ii. Bonnet at a later stage will denounce the three Power Monetary Agreement, vrith the assent of Britain and the United States. „ This would .eliminate the necessity tor , maintaining the Equalisation Fund, which at present holds about £100,000,000 in bank notes, but, as stated above, no gold. Exchanges Suspended The Bank of France announces that pending the decision of Parliament, it has suspended all exchange operations. LIKELY FATE OF THE FRANC CONFOUNDING THE SPECULATORS United Press Association.— By Electric Telegranl* -Copvrlpbr (Received July L 12.40 am.) PARIS, June' 3(j. Financial circles anticipate that the franc will be allowed to fall to 130.35 to the £, and later suddenly brought back to 125, thus confounding speculators and encouraging a repatriation of French capital.

Support for Proposals The Finance . Committee of the Senate adopted the Government's Bill by 20 votes to three. Ten members abstained from voting. The revised figures of the Chamber vote show an increased Government majority of 374 to 206. FATE OF TRIPARTITE AGREEMENT HlN’i’ OF FRENCH WITHDRAWAL United Press Association—By Electric Telegraph —Copvrl ah t (Received June 30, 6.30 p.m.) WASHINGTON, June 29. The French Government Treasury contemplates withdrawal from the Tripartite Agreement. The French Embassy explained that the notice was simply a desire to fulfl. the terms of the agreement by an exchange of views before any action was taken tending to upset the currency of ratios. It is not to be Interpreted to riieari the devaluation of the franc. . _.