The Waikato times. TUESDAY, SEPTEMBER 18, 1934. FRENCH FINANCE

Waikato Times, Volume 116, Issue 19364, 18 September 1934, Page 4

The Waikato times. TUESDAY, SEPTEMBER 18, 1934. FRENCH FINANCE

Another symptom of economic recovery is contained in the announcement of a balanced Budget by the French Minister o Finance, M. Germain-Martin. In view of the fact that France has been a most consistent adherent to the gold standard, this achievement possesses particular significance. It is not very long since a departure from the gold standard was not only rumoured in other countries, but was actually discussed in France itself, but the presentation of a balanced Budget will do a great deal to dispel any fears of a monetary crisis. The Government, it is reported, has emphatically rejected the idea of devaluation, and although there might have been considerable argument in favour of this step some months ago, it will bo readily admitted that at the present juncture, when there is definite evidence of recovery, it would be foolish to prejudice that recovery by an experiment, the success of which would ho by no means assured. Britain found her way to recovery by rejection of the gold standard, but France has pursued a different course, and has apparently met with success in her own way. The drain on French gold holdings in the early months of 1934 subsided considerably during recent months, and since June the gold reserve of the Bank of Franco has actually risen. This may be attributed partly to a return flow of capital from London to Paris, and partly to the depositing of hoarded money in the banks as a result of the growing confidence of the public in the stability of the Government. There is still discussion of inflation, but no serious attention is paid to the possibility, the examination of the proposal being in the main purely academic. On taking office as Finance Minister M. Germain-Martin accepted the task of bringing order out of chaos. It is generally agreed that the high cost of living and the slack state of trade were directly due to the multiplicity of tax laws, 130 in all, which fettered enterprise. M. Germain-Martin set about the task of consolidating the fiscal legislation. Several taxes which had been practically tincollectable were repealed, together with the luxury tax, which applied to articles bought by tourists and was a strong deterrent against touring by persons of modest means. At the same time appreciable reductions were made in the various types of income tax. The result of these measures has been a general loosening of purse-strings and a re-animation of business. Finally the firm hold which M. Doumergue has retained over the Government has given to internal affairs a security which they have not possessed for many years. The present Government has been the first to grapple seriously and successfully with the problems of economic depression, and it is entitled to the fullest commendation for the good showing it has made. It is interesting to note M. Germain-Martin’s condemnation of tariff barriers, in view of the struggle recently waged with Britain with regard to imports, and in view of the prospects of a reopening of French markets to the world exporting nations.