The New York herald. [volume] (New York, N.Y.) 1920-1924, 1921-09-03
FRENCH BUDGET LOW
LACKS GERMAN GOLD
Political Crisis Feared Owing
to Allies Refusal to
Share It.

Special Cable to THE New YORK HERALD.
Copyright, 1891, by THE New York HERALD
| New York Herald Bureau,
Paris, Sept. 2.
The decision Of the allied finance
Ministers in Paris on August 10 that
France should receive no part of the
first billion marks gold Just paid by
| Germany has thrown the whole French
budget for 1922 out of gear. 1t has
become a political issue Of the first
moment here, which is being used for
a renewed attack on the Ministry by
Premier Brands enemies. This is be-
| lieved to be the reason why the French
Cabinet at two important sessions to-
day refused to ratify the decision agreed
to by Paul Doumer, Minister of Finance
and 1t is understood to have addressed
| notes of protest to the allied Powers.
| The situation is affecting financial
circles here and is stemming the current
of optimism which began running re-
Gently when 1T appeared that France
might successfully emerge from her
budget difficulties.
This pessmism is shared by the Cham
ber's Finance Commission, which is
meeting to consider the tentative budget.
This budget was framed by the Govern
Commissions decision. and consequently
1t did not take into account the balanc-
ing of the Sarre mines against the occu-
patton cost and the apportionment Of the
first billion marks between Belgium and
Great Britain, this increasing the deficit
which must be carried over from the
last budget.
The tentative budget requires the coun-
try to raise total Of 24932, 000. 600
francs. which means that the Govern
ment must find in new taxes over the
estimated receipts based on last years
axes, 2,4s1, 100000 francs. This the
Government proposes to find by doubling
The present sales tax and possibly by ex-
lending it to agriculture. Thus Frances
budget, including the interest on the in
erior debt and on some of her exterior
debt, would be balanced for the first time
ince the war, providing the country
makes an almost superhuman effort to
neet the new taxes.
But the decision of the Inter-AlIied
inance Commission would destroy this
ope and France would again be faced
with deficit. Even this budget equili-
Drum. however. does not take into ac-
count the interest on American or British
debts caused by the compromising of the
unpaid interest installments to which
tention.
In the opinion of NJ Bokanowski. re-
porter-gencral OF the Chambers Bud
get Commission. in an Illuminating ar
tcle on frances financial situation, pub
lished In the Revue dc France, this accu-
mutation of interest has become very
grave for France, whose exterior debt
Of 35,o00.000.o00 francs. including 49,
oo,Oo0,OOO owed to the United tSates. is
still carried at frances normal parity,
whereas the present exchange values
would about double the amount
However. M. Bokanowsli points out
that inasmuch as the French Govern
ment has not reached financial ac-
cord with the United States the debt
should be paid at the normal exchange,
this leaves clouds of uncertainty hang
ing over the budget. Another disturb
ing factor, according to his analysis,
lies in the fact that in one year this
debt to America and Great Britain In
creased from 26.754, 100000 francs to
2S.796,000,000 francs, apparently by
compromising.
The Government renowned all inten-
ton OF making new loans, and to reach
an equilibrium has reduced expenditures
from last year by 1900, 100000 francs
while increasing the estimated receipts
by 1000, 600. 900, but in this 1t calculated
upon dropping entirely the high cost of
living bonus of 720 francs year to
its employees. which has already pro-
voked such protest that the COM
mission has practically decided that at
least part of this must be retained,
unfolding the contention of civil en-
ployees as well as labor unions that the
living cost instead of declining has be-
gun to rise ala-mingly again.
The biggest saving made, therefore, is
S00.0o0,000 francs Topped of from the
military expenses. which is tie limit to
which France can go at the present
time, according to the Government