The Washington herald., 1921-10-07
FRANCES INTERNAL
FLOATING DEBT IS
NOW 9l,15,OOO,OO0
Government Financing
Interferes With Indus
trial Affairs.
RATE is STILL HIGH
Business Anxious for Reduc-
ton TO Competitive
Basis.
RATE is STILL HIGH

PARTS Oct e-According to Of
fetal figures the internal floating
dset Of France totals s1.155.oo0. 900
fr.ncS which Is more than two
thirds Of the Internal funded and
term debt This floating debt Is al
most entirely made up Of national
defense bonds and advances from
the Bank Of France On May 81
last the former accounted for 5s,-
s1I0oo,ooo francs and the latter for
~. zoe, 900, 900 francs. Since that
date the bank adances have de-
creased somewhat, but the bonds
have Increased. and there has been
q public issue of two-year s per cent
treasury bonds. which netted some
thing like 5000. 900. 900 francs.
The importance of the national
defense bonds In the financing Of
state expenditures on reconstruc-
tion. pensions and even ordinary ad-
ministrative operations can scarcely
be exaggerated And yet the huge
sums which the state obtains from
their sale are subject to constant
renewal, since none of them run
for more than q year and some do
not run for more than a month.
The twelve-month bond pays 5 per
cent, the six-month AZ, the three
month and the One month 3 as.
The total annual charges on May 1
were estimated at nearly $500, 000,-
900 francs.
Hinders Industrial Revival.
With the decrease Of the bank
discount rate and the general de-
cline of money rates the world over,
the government Is being urged in
some quarters to reduce the interest
on the defense bonds so that private
enterprise may have chance Of
getting funds. But the government
is wondering how IL will be able to
carry on IL the consequence of re-
duction of rate should be decline
OF public subscriptions to the bonds.
There Is no prospect of its being
able to dispense with further de-
msnds on public savings. for huge
sums are still required to finance
reconstruction in the north and
there IL every prospect of a con-
soiidation loan ere long in order to
secure for q long period part OF the
money which the public now lends
the state on short terms. Certainly
German reparation money is not
counted on 10 relieve the situation.
The bulk OF the national defense
bonds outstanding are for one year
and are held by the general public.
In town and country. The thrifty
and cautious peasant has grown
used TO them as a simple and safe
Investment and renews his holdings
whenever they mature. He still
hoards gold and silver COINS, but ne
has come to believe that the defense
bonds are almost IL not quite as
sound
Reduction Bound to Come.
Reduction of rate of interest
might disquiet him, IL is thought.
but after q little time he would be
reassured- II Is admitted all around
that reduction OF the rate Is bound
TO come, but officially II Is doubted
whether this is the moment TO re-
duce IL. And in any case such re =
duction Is unlikely to free money
for private enterprise. because the
government still needs all the
money IL can get The only effect
viii be to tighten the burden of the
service OF the bonds. The money
market will have to reckon with
the government as It's first and
heaviest customer for years to
come.
Growth OF subscriptions to the
defense bonds has been greatest
since the armistice. Following are
hgnres which have been especially
furnished by the Bank of France: