New Britain herald., 1925-02-14
CAPITAL EXODUS
 WORRIES FRANCE
National Bank Has Not Yet h.
 terYened in Crisis
py The A..oelatsd Prsss.


 Paris Feb. 14.-The continued exodus of capital ascribed to de- creasing confidence In France in the governments financial policy is given in French banking circles for the sharp furry in exchange which sent the dollar to 19 francs 35 cen- times at noon today. This expor- tation of capital is said to be going on largely through banks estab- lished for that purpose in Monaco, and also through the purchase of foreign securities on the Bourse.
 It is estimated in banking and official circles that IA billion francs have been exported since the bol- shevik scare around Christmas.
 The Bank of France has not yet intervened with the proceeds of It's American credits to defend the franc because the movement origin ated in France and is declared to be entirely devoid of speculative features. If the bank of France sold dollars and pounds sterling it is pointed out 1t would only enable those sending capital out of the country to get their dollars and pounds cheaper. Therefore, gen. eral opinion is that nothing can stop the movement except the restoration of confidence.
 "The present situation results from accumulated circumstances of the past few months, all of which are calculated to frighten capital" said leading banker today. "There was the communist scare i; then the provision which required the holders of coupons of French bonds to make out list when the coupons were paid and handed over to the authorities for purposes of taxation; then the vote for budget of 34 billion francs--which is really more then 35,OoO, .ooO if the loan to pay increased pensions were taken into account; and meanwhile the country is held in uncertainty as to how the government intends to raise the money"
 In government circles 1t is recog- nized that the situation caused by export of capital is something that is occupying the most careful atten- tion of Premier Herriot and Finance Minister Clementel, who are de- clared to be confident that when the governments financial policy is fully understood it will be found that the alarm such exodus of capital in- dicates is unfounded.
 Another factor considered in po- litical circles as having largely con- tributed to bringing about present situation is the political unrest due to the growing conflict, between par tisans of the government and the Catholics. The riot at Marseilles in which two persons were killed and some two hundred injured, fol- lowed by threats that the thilfg would be repeated when former President Millerand goes to Mar seilles in March for a mass meeting l of followers of his new republican national league. has raised fears ir some circles that if the government takes no strong measures to stor the internal strife more serious troubles will develop.
 M. Robineau, governor of the bank of France, has been in con- stant communication with Premier Herriot and has strongly advised abandonment of the measure re- auiring lists of coupons when pay ments are made. ThisSsugge finds opposition among the pre- mler's' socialist advisors but it is thought in banking circles that the government will adopt the bankers advice at the risk of offending his socialist supporters rather than chance accentuation of the move ment which is depressing the franc.