The Washington times., 1922-10-08
= HE demand of the Temps

Inent should cancel the debt
owed to It by the French. raises
certain Important questions. In
nornai conditions the methods OF
French national finance might
not be our business, but they b.
come ourg business when We are
asked to make 9 present Of Sfs
sso.ooe,poo to France.
Before acceding to ouch . re-
quest. I'VE have q riGht 70 ask
whether Il 10 really true that the
present chaotic state Of the French
national finances IL due wholly, or
even mainly, TO tho inability Of
Germany to pay reparations.
we have also the right to a.
certain whether France II. after
Ill. any worse of than England,
and In particular whether the
French taxpayer bears anything
like 30 heavy a burden as th4 Brit
ish. In dealing with these ques-
lions. I shall rely principally on
the statistics supplied in the val.
usble Memorandum on Public
Finance. 1891. issued by the secre-
tariat Of the League Of Nations.
FINANCE NOT o. X.
The fact that French national
finance was not In satisfactory
state before the war IL shown by
the high pre-war national debt Of
France. which in 1918 was francs
s4e.so labout $3.50 per head Of the
population. This was III per cent
moro than the British debt per
head Of the population-$7S,oo in
1919. The respective proportions
OF the debt to the national wealth
per head Of the population were
III per cent in France, and 4.8
per cent In the United Kingdom.
I take the estimates Of pre-war
national wealth given by Sir ]. c.
Stamp In National Wealth and In
come Of the Chief Powers journal
Of the Royal Statistical Society,
July 1910. and accepted by the
International Finance Conference
at Brussels. -
The excessively high figure of
the French debt was due on the
one hand to extravagant expendi.
ture and on the other to an un-
sound system Of taxation, whicn
did not tap the principal sources Of
revenue and which put the greater
part of the burden on the backs of
those, least able to bear 1t.
The result Of the system was
inadequate revenue. which caused
constant deficits and thus piled up
the national debt. That system
still continues with little modifica-
ton and Is one of the primary
causes Of the present critical con-
dition Of French national finance.
Although the war cost the
United Kingdom three or four times
as much as It cost France, the
former succeeded in paying IS per
cent Of the war expenditure out Of
taxes, whereas France paid only Is
per cent Of her war expenditure
out of taxes and borrowed all the
rest. The reason Of the difference
was that the English imposed
heavy taxation on themselves dur
ing the war and the French did
not. ~.
Nevertheless. in consequence Of
the war. the British national debt
in 1921 was s7s.s per cent more
than in 1918 and the French, $40
Per cent more. The former had
risen to 161 pounds 4 shillings per
head of the population and the lat
tar. to francs 7,S63.1o. These fig.
ures. however. are in paper
pounds and francs.
The best method Of comparison
u IuaL 1uOptcu III tue "ciloIdu-
DUN on Public Finance. 1s21-ths
"correction" Of the 1921 figures by
the average wholesale-price index
numbers of the yeei.
This sfves the equivalent pur-
chasing power Of the figures In
pre-war currency--their real"
value. The ''cogected" debt per
head OF population in 1891 was 50
pounds . phillings In the United
kingdom and francs 2277.S0 (s1
pounds 2 shillings) in France, 30
that the corrected" British debt
was al per cent higher than the
pre-war debt and the French 189
. per cent higher. .'.,~
NEARLY EQUALS FRENCH.
Thus. notwithstanding the far
heavier taxation In the United
Kingdom during the preceding
seven years our burden OF nation
al debt In 1921 was almost as
heavy as the French. Moreover,
the French debt included the sums
owed to the British an American
''ivernments. II France 10 not
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