New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1902-07-28
FRENCH DEBT REFUNDING
THE PLAN OF NJ. ROUvIER REGARDED
AS MAsTERFUL ONE.
Paris, July Il.

AS A MASIERFUL ONE.
Paris July H.
The bill drawn UP by NJ. Rouvier. Minister
Of Finance. for the conversion of the French
! 3l2 per cent rentes into per cents, which was
almost unanimously voted by the Chamber of
Deputies and the Senate is one of the most i'm,
portant financial measures decided upon in the
Third Republic The operation affects an in
vested capital of one and a quarter noiIIiards
OF dollars, or nearly third of the entire funded
debt of France. and simplifies the national fund
ed debt by putting it all on the same footins
so that the 312 per cents, added TO the existing
" per cents. which represent a sum of nearly
three mliliards dollars, will bring about a con-
solidation of the whole funded debt of Franco
amounting to S4.290OO0.O0O. on a per cent
oasis The payment of the 3D. per cents will end
with the coupon of November II next when
the saving to the treasury by the conversion
VIII accrue to the extent of Sc 100000 a year
Ihls viii afford relief to the Budget the deficit
of which for this year alone is estimated nv the
Minister Of Finance al 1SOOO0OG0 francs or
S56,oO0,0O0. and marks for the first time in the
history OF the Third Republic a genuine effort
toward financial economy
But in order TO balance the budget NJ. Rouvier
VIII have 10 do something more. The conversion
or the 81 per cents is by no means sufficient
The Socialists have extorted from the Cabinet
PIoIHise IN general terms of some kind of an
income tax. coupled with a remission of GER
tain categories OF long established taxes. No
one appreciates better than NJ Rouvier himself
that new forms of taxation seldom prove
productive in practice as in theory and the ex-
pectation in financial circles is that any further
manipulation of the old and tried sources OF
fiscal revenue will result, at the outset. at least,
in heavy losses TO the treasury. The Cham
Der will soon be closed for the summer season
and will not meet until the autumn when it is
confidently expected that new loan OF $780,
100000 will be discussed and put on the
ket at the close OF the year or early in 1903.
Such a loan seems absolutely necessary to make
both ends meet. 1t would give time for the
readjustment of taxation and the consolidation
of the floating debt. The consolidation OF the
floating debt is a measure upon which NJ.
Rouvier has set his heart. and which. together
with his consolidation of the funded debt would
be achievement which such unquestionable
authorities on financial matters as Baron AL
phonse de Rothschild and ]. Pierpont Morgan
reported to have spoken OF as a financial
operation of very great wisdom and one which
would give NJ Rouvier renown a finance min
lister similar to that which pertains in England
to Lord Goschen.
The somewhat complicated method which NJ
Rouvier has adopted for the conversion OF the
81 per cents is regarded the most adroit and
scientific scheme devised at the Ministry Of
Finance for many years and when announced
in the Chamber elected from several groups of
Deputies the remark: AT last The republic has
found masterful financierr'
NJ Rouvier's scheme is in substance the same
that by which Lord Goschen brought about
so successfully the conversion OF the British
8 per cents TO 2l5 per cents. NJ. Rouvier pre-
sents the transaction to the holders of the 80
per cents in so palatable a FORM with an in
geniously contrived bonus in cash. that all dam
ger OF a demand for wholesale reimbursement
Of capital seems TO be avoided Moreover, the
time for the conversion is most opportune be-
cause there is at present enormous amount
OF unemployed capital in France which will al
most certainly further accumulate during the
summer and autumn. Besides this the Bank
of France just now has in its vaults more gold
than has ever been held by any banking or trad
ing institution in Europe. The gold coin in the
sS SH 900 o. rance on jury amounted TO S0l-
The practical working of NJ Rouvier's CONVEX
sion scheme is by graduation, and gives the
holders Of the 312 per cents 3A per cent for four
years from January l, 1903. During a period
of eight years there is a guarantee that there
will be no further conversion interference
with the bonds. But in order to avoid the incon-
venience of hampering the market with 3H
per cent stock for four years NJ. Rouvier with
great knowledge of human nature. decided to
pay the quarter per cent in advance and in a
lump sum. Every holder Of the 312 per cents
who accepts conversion will receive with his
L
next. additional 1 per cent on his bond
This is trifie better than u per cent paid
yearly for four years, and appeals with great
effect to the frugal French investors, for il is
a cash down operation Interest at 31a per
cent ends on November H. 1902 Interest on
the new per cents is TO run from January l,
1913 There is the odd half quarter between
these two dates 10 be accounted for. NJ. Rou-
vier calculates the interest for this period at 2
per cent. and pays ii in advance on November
IL. together with per cent. which represents
"a per cent interest for four years.
M haS tnI1 he
Gus task OF establishing equilibrium in the ma
tional budget with an admirably devised scheme
which appeals TO the frugal instincts of the
small country investors. II is predicted by
leading bankers here that in NJ Rouvier
France has found finance minister who in
his sphere OF action is likely to attain the pres
tige approaching that which NJ Delcasse enjoys
at the Quai dOrsay where ne is complete mas
ter in his own domain. and the great mass of his
fellow citizens are we'll satisfied that this should
be so. C. IB
Il