Evening star., 1923-09-20

Frank Vanderlip once said that the
French mind grows bewildered when
the unit of billion is reached. Even
before the great war. her handling
of the public debt problem was noto-
riously bad. The French debt in
creased forty -eight-fold from 1900 to
1914. Compare this with the debt of
Great Britain, which increased dur
ing this time only twofold.
The government of France in 1914
actually owed more money than the
governments of Germany. Greece. Ru-
mania. Serbia, Sweden, Norway, Great
Britain and United States combiued
With the population equal to one
third of that of the United States and
covering territory one-fifteenth as
much, France entered the world war
financially sick. She was already over
burdened with debt. She owed s166
for every man, woman and child
largest government debt per capita
in the Worldwide that of Great
Britain, five times that of Turkey,
six times that of Russia, ten times
that of Germany and fifteen times
that Of the United States. Now this
is a very significant fact At the
very time when the war broke on
startled Europe France was making
UP deficit in her running expenses
by selling S250000.0O0 of bonds She
pay her running expenses.
From 1881 TO 1890 she spent about
81, 600, 100000 more than she raised in
taxes. From 1871 to 1914 the public
debt increased from s2,500,000.00O to
$500, 600 900, which alone increased
the interest charges from $4,000 a
day to $4,000 per day. This was
the situation just before the war came
in nation which, territorially speak
ing. could be swallowed up by the
state of Texas with enough land left
over for Texas to carve out three new
states as large as Maine, New Hamp-
shire and New York combined
< x x
In 1914 France had outstanding
$3.50. 10000 in bank note currency
and deposits and sS4O,000,00O in gold
to back up these obligations. In other
words, for every dollar of bank notes
and deposits outstanding she had GO
cents in gold to pay with.
During the war and up to Decem-
ber 81. 1920, she increased her bank
notes and deposits to $S, 400, 900, 900.
while her gold reserve actually de-
creased to $4,000, 900. To put II in
another way. her circulating bank notes
and deposits increased seven and one
half times, while the gold and silver
reserve decreased s65. 900. .000 For every
dollar of bank notes and deposits out
standing at the end of 1920 France had
only 9.5 cents in gold to pay with. On
July 81, 1914, the bank note circulation
per capita was equal to S32.49. On
October 10. 1919. it was S17SS9 per
capita. What happened? The same
thing that happened in England
With far greater ratio in the
increase of money than of goods
produced within the country, the
prices of the articles OF living went
up and the purchasing value of the
franc went tumbling down. Taking
the average wholesale prices in
France during July, 1914, as 100, such
as we did in the case of England.
we find the prices for the same
articles averaged 206 in July. 1918.
and 373 in July, 1920-that is to
say. ami due chiefly to initiating its
currency, an article which cost 500
III 1914 cost 1878 in July, 1920.
x X x x
To get a true picture of France
, these figures above quoted must be
kept in mind. Few of US realize