The New York herald., 1922-12-26
FRENCH DEBT NEWS
INTERESTS MARKETS
Indefinite Postponement Of
Repayment to Bank Of France
Is Contemplated.

Special Gable to THE New York HERALD.
Copyright, 1929, BY THE New YORK HERALD
New York Herald Bureau.
Paris. Dec. "a. !
The attention Of the whole French
financial market is turned on the move
ment developing In parliamentary finan-
cial committees looking toward a possi-
BILE indefinite 'postponement of the
French Government Indebtedness to
the Bank of France.
The question was brought up last
week when NJ. Lasteyrie. Minister of fl
nance, faced by otherwise unstrmounta-
BILE budget difficulties. proposed TO mod
ify the 1920 agreement with the bank
whereby the Government was to repay
the banks advances at the rate OF
1000. 000, 900 francs year.
Thanks to public thrift and the con-
seouent fact that France counts upon
between 10000, 100000 and 40,000.000,-
600 francs in public savings for invest
mont purposes yearly, the government
was able to carry out this program the
first year and brought the national debt
to the Bank down to 25.0OO, ,0OO,OO0
francs last December.
The continued advances 60 the devas-
tated regions while France received no
cash from Germany To offset these pay
ments makes 1t impossible for the Gov
ernment to continue the payments to che
Bank OF France and NJ. Lasteyrie now
wants reduction to not more than
1,000. 900. 600 francs a year.
The argument advanced in favor OF
this by some financial experts is that
such a modification really does not alter
the nations financial status. as the
Government and the Bank OF France are
virtually interdependent. But this ini-
medately aroused a response from the
extremists. who say that this being so,
why worry about repaying the Bank OF
France at all until Frances exterior
debts have been taken care OF or at
least until the nation is pat back on
its fullest productive basis?
Government experts admit that this
would relieve much worry over the
budget balancing for next year. but
they are evidently reluctant to seize
upon such an extravagant method,
fearing percussions In international
markets should The impression get
abroad that France is unable to meet
her obligations, even those to her own
financial institution. which
everywhere is considered the bulwark
Of the French treasury.
THE New York HERALD correspon-
not likely to be any decision exceed
ing that suggested by M. Iasteyrie
for the present. but the spring session
Of the Chamber is certain to find the
developed. and If the impend-
ing reparations schemes prove unproduc-
tive in the initial months much favor
Is likely to accrue to his novel expert
ment in what Is already being termed
state insolvency."
One writer, after studying the Bourse
reflexes from the successive arrange
ments between the State and the Bank
Of France, declared that any radical de-
cision of this kind Is certain to result
In the dollar reaching % francs at "a
jump with the pound somewhere around
100, and he is fearful that even reduc-
ton In the yearly payments may lead to
new concern abroad as to Frances
apacity-admittedly a dangerous situa-
ton at time when American bankers
are processing their willingness to lend
to France but not to Germany.
Apart from this the Bourse this week
an exceptional calm. there
being no excitement even when hourly
dispatches almost pledged American
financial assistance Immediately for
The exchanges naturally fol-
lowed the tenor of these reports. but the
chief reflection was found In copper
securities. Rio Tinto especially jumping
wildly at the news. This is attributed
to the fact that the Rio Tinto Is expect
ing heavy buying Of copper by Germany
as soon as any outside capital is pledged
TO Berlin.
Even the January conference of
Premiers now seems unable to give year
end squirt to meet the year end liquida-
lions. where little difficulty Is expert
snced as plenty OF small capital is avail
able everywhere and rates are advan-
tageous for short time advances.