The Waikato Times With which is Incorporated The Waikato Argus. MONDAY, JUNE 28, 1926. FRENCH FINANCE.

Waikato Times, Volume 100, Issue 16834, 28 June 1926, Page 6

The Waikato Times With which is Incorporated The Waikato Argus. MONDAY, JUNE 28, 1926. FRENCH FINANCE.

The financial chaos in France goes from bad to worse. The resignation of M. Briand seems fo have been a political manoeuvre to enable him to get rid of his colleagues, but although they were probably incapable of dealing with the crisis it Is very doubtful if he will do any better with others. He has certainly obtained the assistance of the most capable financier to be found amongst French politicians, but it is improbable that M. Caillaux will be able to do any better now than he did when he held office a few months since. For over twelve months the French have lived in a perpetual financial crisis complicated by political disagreements. Each new finance minister has produced a budget a little weaker than the last, and during the year the public has grown increasingly suspicious of Government loans. The problem is how to meet the short dated loans that fall due at frequent intervals. If the loans could be funded and fixed, say for twenty years, there might be some possibility of meeting the interest, and something might turn up in the interval. It is poor finance to wait in this way upon chance, but it is difficult to sec what other prospect there is before the country. The evil is deep seated and of very long standing. The French have not been accustomed to direct taxation and resist it strongly. There is in addition a feeling of resentment that the small landed proprietor escapes his share of the payments. For one thing it is difficult to get at him. lie lives on the produce of his farm and the amount he sells off it may be very small, so that there is little income to be taxed. At the same time he buys little and his contribution to customs duties is small; he produces his own wine and escapes taxation on that head, so that a finance minister would find it hard to impose taxation on the small proprietor that would pay for collection. The peasant, too, has a rooted objection to taxation of any kind, and his representatives in Parliament would, certainly lose their seats if they did not oppose any proposal to tax him. Yet these people save enough money to have made Franco a wealthy country and to enable her capitalists to lend largely to foreign countries; not always with the best of judgment. The difficulty of French politics is that there arc always enough representatives of the peasants in the House to prevent sound finance, and this has gone on long enough to place the -whole financial position in jeopardy. Yet there is no certainty that the peasant will realise how serious is the position. We shall sec what M. Callaux proposes to do to meet a position that is full of difficulty. If the Opposition members could rise above parly and agree to adequate taxation, even Ihough they thereby lost their seats, it is possible that the situation might yet be saved, but there seems no indication of any public spirit of this kind. France is a rich country, and that she should be unable to raise the money required to conduct the Government is extraordinary, it is gratuitous folly to prophesy, but it would seem that there are but two alternatives before France. Either she must fall under the Government of a dictator, or must look forward lo repudiation, and of the two, repudiation is the more probable. Soldiers are poor financiers, and a. dictator must al least have the support of the army. Taxes can only be collected from those who are willing to pay them. Individuals may he prosecuted or Iheir goods distrained, but whole, classes cannot lie treated in ibis way. Moreover, conscription is practised in France; the rank and file of the army will, therefore, have the feelings of the civilians from whom they come, so that it is not clear that the officers class who might lie ready enough lo assume the reins would have any man power behind them. Ptcpudiation or even bankruptcy is serious enough; it means Dial for many years to come France mu.sl abandon any claim to be. considered a great Power. Armies and navies are cosily toys, and war, even colonial war. is a fearful drain on a .treasury- The French treasury, too,

would have to be provided with ready money, for loans would be out of the question for many years. But if France ceased to be a great Power the whole system of European politics would be changed, for France has been very active since the war in arranging alliances, ententes, and simillar understandings in order to maintain the settlement made at the Treaty of Versailles. It is possible that this would lead to a return by European nations to the ideas of peace. Viscount Gecil has lately expressed Iris regret that these nations seem increasingly inclined to fall back on force as the sole remedy for any grievances, and if this mood continues, Europe will sink to lower depths. The United States is the one country that Js minding its own business, and it is flourishing in consequence. France that used to consider hcrsclt in the van of human progress is unable to finance her Government. The Socialist ideal of equality of condition has been to some extent realised. Tho law prescribes that on a man's death his property is equally divided among all his children. France has therefore thousands of landed proprietors owning properties so small that they afford but a niggardly living. These people save, but they cannot be induced to pay taxes, and tho professional and business classes are neither numerous enough or wealthy enough. to support taxation on the scale in which France has indulged. If military tendencies arc curbed by want of money tho world might rejoice, but unfortunately this seldom happens. It is only when a combination of circumstances leads to the demand of large sums at short intervals xhat the pressure is felt. Poorer countries can rarely accumulate enough debt for It to be a drag on any warlike propensities.