The Omaha morning bee., 1925-04-06
FrenchBank
Blamed for
Crisis There
Serious Conflict Between
Bank of France and Govern
ment Responsible for Pres
ent State Of Affairs.
Luxury Tax Now Planned
BY L. r. BERTEILJ.
Universal Service staff Correspondent.

Iniversa1 Service StaIt correspondent.
Paris. April 5.--That the present
French crisis Is the result of serious
conflict between the government and
the Sank of France is information
from the highest source.
According to n strong rumor the
Bank of France entered into a secret
agreement With Premier Herriot sew
cral months ago through which the
circulation was TO increase by n bill
lien francs without the authorization
Of parliament.
- According to Deputy Candaco
member of the commission on fl.
nance, there are now not Al goo, 600
600 but actually 5000, ,000, 900 francs
issued although 5000, 900, 900 of these
are not circulating because they are
stuffed in the stockings of peasants
who are no longer buying state loans.
Following the reported agreement,
Director Robineau of the Bank of
France, who looms as the veritable
financial dictator of the country,
went to Premier Herriot and insisted
that the premier reassure the nation
regarding initiation. Before the cham
Der Premier Herriot made the decla-
rations
NO Initiation Necessary
NO government of France will
ever have recourse to initiation
Six weeks later Robineau dema nded
the urgent reimbursal of 100000
Goo francs from the treasury to re-
duce circulation.
This was the demand which pre-
cipitated the crisis. According to re-
port Robineau has stated that he will
not sign next weeks Bank of France
statement unless formal assurances
are given that the 1900, 100000 francs
will be repaid with short delay.
Added to other embarrassments of
the treasury, which include bonds to-
falling $500 900 900 francs due at the
erd OF April. the banks demand has
evidently plunged the government
into a morass. According to indica-
tions the new plans which the new
finance minister, DE Monzie, will pre-
sent Tuesday. will be disguised
capital levy or forced loan. combined
Xlth greatly Increased taxes.
1t is considered almost impossible
that the Herriot government can live
another week, after which it Is likely
The solution viii be a coalition OF all
parties except the extreme right and
left, under the premiership of Dc
Monzie or BRAND.
Exchange for Bond.
The forced loan proposal is for a
Is per cent addition TO be made IL
all de luxe" articles, to be paid by
the purchasers. and to be called A
''loan tax" The purchaser will re
oeive a government obligation OF
coupon for the amount. When these
coupons mount up sufficiently they
may be exchanged at a bank or post
office for a treasury bond, payable
without interest 10 years hence.
Thus. If one buys a dozen bottles
OF champagne, for example. at COZ
francs, the actual payment would be
$50 francs. including a coupon for 90
francs. When a total of 900 francs
in coupons has been saved they
would be exchanged for a | 1,000-franc
treasury bond dated 10 years from
date of issue.
in government circles it is con
tended that this unique form OF taxa
ton would not be "compulsor,
loan," but compulsory savings
tax. It would oblige consumers Of
luxury articles to save considerable
sums. Being without interest. thu
only charge to the government would
be the expense OF issuing the coupon,
and bonds, which would be more thai
compensated by the free use of tn,
money over the savings" period.
Yield Would BE Large.
- In reply to the objection that {
bond of 900 francs taken now NIGH
have TO be reimbursed In 10 year
when the franc might have increased
by 100 per cent in value. thus caus
ing loss In its reimbursement o
900 francs. 1t is suggested that thu
coupons be in gold francs. In othel
words, instead of coupon for 81
paper francs for an expenditure o
COO francs, the coefficient of 3.33
would be used, making a gold frac'
coupon Of approximately 20 francs.
The coefficient would be altere,
monthly-as at present in regard T.
cable rates and other gold-basis pay
ments-according to the value OF tn
paper franc.
NOuth Is Couvicted