Evening star., 1923-09-20
Can Europe Hold Together?
Problem.
BY JOHN r. SINCLAIR.

that the public finances of France
were in bad way when she entered
the war. She owed too much money.
| Now, mark you, while France entered
the war financially weak she made
no effort during the war to correct
her weakness. The authorized fig
| ures-anu they are the only ones
we are using-show that France
spent for war purposes $21, ,6I7, ,000, 900
and raised in war taxes to pay for this
! huge expense the pitiful sum of only
for war purposes she raised l cent
| in war taxes. Compare this with
| 81 per cent raised by the United
states and % per cent by Great
Britain. ! can put ii in another way.
France during the war raised each
individual of just IL cents as against
$3.50 raised in the United States
and $35.94 raised in Great Britain.
We can only conclude that France
respected to be victorious in a short
way. But, she guessed wrong.
France raised by taxes Is cents out
| of every dollar she spent for all pur
lposeS, war expenses included, during
the period of the struggle. So S5
/, cents had to be gotten elsewhere.
| She got 1t by borrowing on her credit
and by Initiating her currency just
as England did.
Just how was this done?
First. by. selling her liberty bonds
| and her short-tine loans, she in
| creased her debt from $685.. 900. 900
to $2S,702.O0O.000 on January /, 1919,
! an increase of moro than 430 per cent.
Second, by increasing her bank
note circulation-her volume of
| money-from s1.150,0O0,OOO to Ss,-
4OO,00O,OO0 on July 1. 1919, an in
crease of 730 per cent.
u
The war came to a close late in
1918. France won. Everybody ex-
pected imitation to stop. Germany
would pay all war costs Ito the last
farthing"
Since the close of the war France
increased her public debt based on
par exchange, from s2s.7o2.o 900, 900 to
$5S,200,000,oO0 on July /. 1920. and
| now to approximately $50, 600. 600, 600 on
July l, 1923.
Since January I, 1919, she has in
creased her bank-note circulation
from Ss.40O, 1000. 600 TO approximately
$4,000. 100000. In 1914 an American
dollar would purchase francs, in
Sanuary, 1870, 10 francs, and now,
September, 1928 is francs
The debt charges in 1929 are twelve
times the debt charges in 1918 and
more than three times the total ex-
perlses of the French government in
| 1913.
France is spending for 1923 about
10000, 100000 francs and raising about
1900. 100000 francs in revenue, Vet
/ she has larger army than any coun-
try has ever had in modern times
Stili the difference of $4,000. .000 francs
/ must be raised. How? BY issuing
more and still more government bonds
and short time notes and selling them
| to her people. But she cannot do this
| forever. The demand for her bonds
| is already growing less. The interest
rates on her bonds are getting higher
and higher. Even at 6 per cent the
last issue of her bonds was not all
| subscribed. Then what? The gov
! ernment will sell" them to the Bank
! of France. who in turn will give new
] bank notes in exchange. When the
French peasant refused to buy any
| more bonds, then France has only one
! course open-the one Russia and Ger
| many and Poland and Hungary and
Austria has taken. Today she is fast
moving into that position.
| Next: The Battling French Debt.
| Copyright, 1923. in United States and Grea,
| Britain by North American Newspaper
Alliance. All rights reseryed.1