New-York tribune., 1921-11-21
French Reused
BY Bankruptcy
Talk i'm Berlin
Believe Huge Expenses Are
Part of Deliberate Effort
to Avert Treaty Obliga-
tions; Remedies Named
Higher Trade Tax Urged
Greater Efficiency i'm Pub
lie Service Much Needed:
Crisis in Switzerland
spscsa, Gable to rns r.loums


Copyright. 1924. New York Tribune INC.
PARIS, Nov. 20s-The French gov
ernment is greatly worried over the
question of future reparations pay
mcnts by Germany as result of the
report of the Reparations Commission
from Berlin.
The commission reports that the Ger
man budget shows ordinary expendi-
lures of $1,000, 100000 marks, against
receipts Of $1,000, ,ooo 600 marks. How
ever, the extraordinary budget, with
out mentioning reparations payments.
shows such prodigality that deliber-
ate attempt to avert treaty obligations
by pretended bankruptcy is suspected
hers.
Railroads alone show deficit Of 49,
0o0,0o0,000 marks, posts and telegraphs
another 5000, 100000, and the purchase
of foodstuffs above the price at which
they were sold to laborers cost the
government 10000, 100000 marks. It
! is universally felt in France that Ger
many's public services should be put
on a paying basis and that dividends
of Industrial companies and banks,
which ara now more prosperous than
before the war, should be adequately
taxed. IF proper taxes are imposed
and efficient economies effected Ger
many could not only balance her bud
get, but make the necessary payments
to the Allies in kind.
Gold prices in France are 81 times
; higher than in Germany, so that if the
latter pays exclusively in kind she will
profit by having that difference in
price credited to her reparations pay
ment account.
Deprecated exchange means cheap
labor in Germany for many years to
come, and this can become very profit
able to the Allies if used in time, as
eventually prices in Germany will COM
pensate the exchange depreciation, as it
has in England and France.
The Paris market has been slightly
heavy all week as a result of the heavy
subscription to the last national credit
issue as we'll as because OF the f1uctus
atoms of marks.
Sentiment has improved, as the gov
ernment insists that this will be the
last increase in the public debt for
ordinary expenditures. although the
devastated regions will still require
loans. An economists view voices the
sentiment in the Chamber of Deputies
in maintaining Frances determination
to get payment from Germany through
mortgages on Industries II the mark
proves worthless.
Bonds have held steady, except 8 per
cents, which ruled easier in refecting
fear of competition from other govern
ment issues when they are freed from
trading restrictions The suppression
of the 900 100000 franc sinking fund
to uphold the market in these issues
was also factor. The release from
government control is expected to re-
20 ,000,0 ,00O, 900 francs lying idle in banks
q large part will be used to profit by
the opportunity of buying up high yield
ing negotiable securities.
This fact was proved with the 6 per
cent loans of Albert and Rheims,
which are selling at par, while the
government per cents have sold at 93
on the curb because trading in the
official market has been restrained.
Railroad securities held strong be-
cause the new regime has provided for
increased tariffs effective January /.
Their 3 per cents at 2Sa are selling at
an attractive yield of 4.S8 per cent and
when reimbursed in l943 will bring 500.
This is equivalent to buying a per
cent bond at 65.
Switzerland is in the midst of an
economic crisis because Of the drop in
interest rates and prices following the
rise in exchange rates virtually to par.
Large industrial companies there are
| now borrowing funds at s per cent,
against 8 per cent year ago.