New-York tribune., 1922-10-30
Exchange Fall
LIS Dominating
Paris Interest
Fundamental Reason for
the Depreciation APP
pears to Lie i'm Short
age of the Wheat Crop
Higher Grain Prices Seen
Budget Deficit Equivalent
TO Interest on Sums Bor-
rowed for Reconstruction
By wireless to The Trsbune


Copyright, 1922. New syork Tribune me
PARIS, Oct. 29.--The unfavorAhle
exchange situation is the dominating
interest here, as 1t may possibly reduce
the purchase of needed food supplies.
1t appears that the fundamental cause
Of the francs depreciation lies in the
fact that the wheat crop is 20 per cent
below normal. The only otfsetting fac
for the use Of whole-wheat bread.
Although the government deems it
unwise TO enforce war rationing to
cover the temporary exigency, the
French people are capable of great self
denial under stress of difficulties. But
having been hypnotized by the excep-
tional crops last year they are unpre-
pared to cope with the situation Gre
ated by Europe-wide wheat shortage.
Internal prices have reached 81
francs o quintal (220 pounds), COM
pared with rs francs few months ago,
| and as SO francs Is expected to be the
1923 average no decline in the retail
price Of bread ia counted on. It is
now at I franc centimcs kilogram.
The budget deficit of 4,000,000,000
francs has caused some alarm owing to
the publicity given to the discussions
in the Chamber of Deputies. This def
cit represents almost exactly the inter
est on sums borrowed on account Of
| reparations which arc capitalized at
$4,000, 900 francs. These figures
have been known since January when
the program Of expenditures became
effective. Since then the situation has
not been changed, except that now 1t Is
| evident that paper marks can no longer
be medium Of reparations payments
and that now Allied collaboration and
control is necessary for a reorganiza
,, tion Of German finances.
In the meanwhile the policy of
France is to continue to do what is
possible single handed to restore pre-
war conditions in Che devastated
regions. Expenditures for reconstruc-
tion ultimately will prove highly pro-
ductive from tax paying as we'll as
sentimental viewpoint.
Technical influences are Responsible
for the strain on French credit. Eng
lish payments TO the United States are
believed TO be factor as pounds must
be kept at the highest possible level.
We must remember that even before
the war depreciation in the frame oc-
Cured each autumn within the limits
of the gold points and unquestionably
the variations would have been greater
ioA VAio 3VI III Va eIJ oSIIEAI pSGI lACh-
ing.
The influence OF credit has been
vitality important since the war and un-
doubtedly it's Impairment has been
largely responsible for the present de-
termination of the government to seek
reparations when possible in the forms
Of goods rather than through floating
enormous loans.
The rapid Improvement of business
in almost every industry has made la
Dor scarce and costly, so that we may
look for great migration Of workers
from neighboring countries in 1923, and
there seems to be no reason why Ger
man efficiency should not contribute
to the long postponed business revival
The Bank Of France shows a further
reduction to 25,60o 100000 in bank
notes and advances to the state are
down to 23,600,ooO, 900, with a further
reduction of only 00,00O,000 francs re-
quired to make effective the annual de-
flation, according to the government
convention.