, 1923-02-01
THE FRENCH FINANCIAL CASE

New York Times, written by Am
bassador Myron T. Herrick, and
dealing at some length on the case
Of French finances. We believe this
article with be of interest to u
readers at the present time. especial
ly in view of the recent French
military action in the Ruhr district.
Salient facts in the present H.
nancial situation of France are set
forth in an article contributed by
Ambassador Myron T. Herrick to the
New York Times for December 81.
Mr.. Herrick writes as an experienced
banker who has had unusual oppor-
tunities to obtain from leading H.
fullest information.
Mr.. Herrick asks his readers in
the first place to bear in mind the
consequence of the tremendous fight
ing that took place in French ter
ritory:
The 100000 men killed, the s.
400, 900 men modified, the ten de-
partments invaded and partially de-
vastated. would men proportionately
for the United States, 1900, 900 men
killed, 100000 men modified,
four states (among the richest and
most industrial) invaded and partial
ly devastated.
Nevertheless, instead of Sitting
down and waiting for German
money" as a New York paper wrote
a few weeks ago, this is what France
has done without external help, and
from her own resources, in the ar
duous times that have followed the
armistice:
Population evacuated, 4,690,00O
Inhabitants; retui ueu, 4,335,000.
municipalities evacuated, 1886; re-
turned, 3,216. Schools destroyed,
7,271; restored. 1854. Areas de-
vastated, 100000 acres. titled anew
800, 900 acres. Railroads destroy
ed (standard). 1000 miles; repair
ed, 1000 miles. Railroads destroy
ed Qocal), 1,400 miles; repaired,
so miles. Factories employing more
400; restored, 3,645.
Priority has been given, for OBJ
vious reasons to productive work,
and the homesteads have come in
last.
Homesteads destroyed, III, 1888;
Professionally repaired, $4,000; re-
built ho~mesteads, 671.
This is why so many inhabitants
still live in dugouts. cellars, cor
rugated iron huts. etc. The prob
lem is to know whether France must
have these people as they are, or
whether. failing payments from
Germany, she can load that immense
burden on her own shoulders.
France has spent up to now for
PREPARATION 1000. 900 900 francs; she
has received from Germany about
1900. 900 900.
At the same time remarkable eff
forts have been made to correct the
financial consequences of the war.
Circulation of bank notes: Maxi
mum reached in November. 1920
80. 60.000,00O francs; today. &c.
500, 900, 900 francs.
Indebtedness of the State to the
Bank OF France: Maximum reach
ed in 1920. 26.7OO.00O.O 900 francs;
today. %, 900, 200 francs.
Trade bills held by the Bank of
France when the war broke out and
extended. about $500, coo. 900 francs
OF which $4,000 900 are outstanding
today.
This last figure is particularly
striking and speaks highly for the
character of the French tradesman
and his sense of commercial honor.
The taxes-contrary to what is Of
ten said-are now very high in
France. Bearer securities (the us
ual form here) pay between 20 and
70 per cent. income tax; the super
tax for incomes of $4,000 and above
Is so per cent. Total, 20 to 10 per
cent.
The average burden OF taxes in
France, according to the British
Chancellor OF the Exchequer. Is $50
a head. as against $32 in the United
States for 1912 and s27 for 1922
%.
1t is morally impossible for France
moi to rebuild the homesteads. This
means spending between GO. OOO. OOO.-
900 and 100, 600, 600, 900 francs
more. II looks as II France would
have to provide hat money herself.
Result: The United States will
have one debt (war %expense), Great
Britain Will have two debts (war
expenses and Indebtedness to the
United States), France will have
three debts twar expenses. indebted
ness to the United States or Great
Britain and reconstruction).
On the other hand. II some peo-
pie can have their way. Germany will
have no debt ut all. for she has
no exterior debt except Preparations.
n IN rcparations are waived, Ger
many. having no reconstruction to
erect at home. her interior debt
war ~cxpcnscs) would be reduced TO
practically nothing by the process
OF stabilizing the mark ut. say. ono
hundrcdth OF Its gold value. Is this
fair
h French people feel that II
Germany IL allowed to escape all
Liabilities In this way. n terrible
precedent will have been created.
IL ever another conflict takcs
place. no restraint will DO put upon
wanfon obstruction; II tho ngxrc.-
ror Is victorious. nobody win ask
questions: II no is defeated. no will
simply say that he Is unable 10 pay.
Franco Ia pnypratt., .z,tl-.- -.