New-York tribune., 1921-11-07
Finances Still
Giving French
Great Concern
Agreement on Budget Favor
able Sign, but Further Re-
adjustments S en- Nee
essary to Meet Deficit
New Significance to Franc
Reparalions Payment Pro-
gram Involved in FIuctua-
iions of Foreign Exchange
Special Cable to TIC Tribune

Copyright 1921, New York Tribune Inc.
PARIS, Nov. 6.-~The budgetary com
promise reached between the Minister
OF Finance and the Chamber of
Deputies committee on finances salts
hes the industrialists, who sought to
avoid further tax burdens, while at
the same time it gratties government
bondholders-a large proportion of the
Observation-Disclosures it wipes out
deficit of $500, 100000 francs.
Economies and the income tax read
justments win provide 10000, 900
francs, while 1900 900 900 viii be gained
by suspension until 1922 of an amorti-
zation Of the public debt Even if the
present business stagration' continues.
government expenditures from the
ordinary budget Will only slightly ex-
ceed revenue.
This showing compares favorabiy
with last year5 when interest and debt
charges Increased from II 800 600 900 to
1880, ,000000 francs.
A committee has Just been appointed
to consider reorganization of the gov
ernment finance department, which
heretofore has been better suited to
the collection of pre-war and indirect
taxes than to the inquisitoria methods
now necessary in investigation of in
come and inheritance tax returns. Of
the expected 2.i00 100000 francs only
1,020 coo 600 was declared, and now
only 2T5,000,00 francs has been actu-
ally paid in. OF course, in few years
the inspectors will become familiar
with the resources of their zones and
Will compile records which Will make
evasion dangerous, as in the United
States and England, but the French in
come tax will slways be more difficult
to enforce because, due to the unique
distribution of wealth, it will be paid
principally by small holders of less
than 10000 francs income.
Although the question of the ordi-
nary budget has been settled, special
budget of 1000 ,000,O ,OO0 VIII be more
difficult, because it is dependent upon
the punctuality of German reparations
payments.
If these are made in merchandise it
Will be necessary for France to find
at least 5000,000,00O francs cash
to pay pensions and interest on recon
struction loans. This would necessi-
tate another long-term loan. because
further issue of treasury bills is like
lmmediate tely depress the franc in for
eign exchange markets.
The future exchange value OF the
franc takes new significance not onlv
from the conference at Wiesbaden, but
from the drop in German marks. If
German gold and labor rebuild the dew
astated regions it might be good policy
to keep the franc stabilized around
cents and pay the governments bond
holders with the devalorized paper
francs until the country is strong
enough to bear a heavier burden.
On the other hand, if Germany pays
only in merchandise, she Will be cred
tied according to its value on the
French market A rise in the value of
the franc. therefore, would make no
difference in regard to the deliveries
of raw materials from Germany az
reparations payments, and similarly
make it possible for France to pur-
chase raw materials, such as cotton and
wool, at much lower figures than at
present.
This week was characterized by COM
plete inactivity and heaviness of the
Bourse. Public interest is still con-
fined to government issues, the result
being that the best investments are
greatly discounted The termination
of the textile strike made only slight
impression, although it gives promise
Of greater harmony in the adjustment
of these quarrels. In the future wages
will be reduced to correspond with the
reduction in the cost of living