New Britain herald., 1925-02-18

decline of tile franc and Its failure 10 react fully and speedily; and the revelations in the Chamber of Deputies of improper expenditure of sums used In reconstructing the devastated regions.
 Yet throughout all of this iinan- cial difficulty the country has been unusually prosperous and unem- ploymcnt has not existed, vivid contrast 10 conditions existing in England, The budget has been balanced this year for tho first time since the war
 Comparison of English and French financing is interesting. The British have lacked prosperity since the armistice. but they have fund ed their debt to the United States, have instituted high taxes to raise the necessary funds for government functionng have never counted as assets any possible payments Of German reparations, and the Eng fish pound sterling, which had de- preciated to a third of it's value has returned almost to normal, The British government financially is q going concern and is paying its way.
 French fiscal history shows traditional objection by the people against paying high taxes. They have much preferred to finance their government by lending to it. The accumulation of high debt is the result, and a constantly increas- ing portion of the budget is needed to pay interest on the internal debt In a way, the plan leads to indirect taxation. The government sells the bonds at par, but because of their large number. they depreciate in value. Many of the holders sell their bonds at the depreciated value, and the difference between that and mar constitutes tax which the holder is less inclined to notice than 1 if he were taxed directly.
 The industry and economical at tributes of the French peasant are indisputable; the lack of Anglo Saxon efficiency in governmental finances is likewise indisputable. Americans, with a national debt of only $20, 900, ,000, ,OOo. have been de- voting much thought and effective action toward reducing it. France is a poor country compared with | the United States, yet it's national debt, based on a franc at par, is at least four times as great, not count ing the war debt to America or Britain, which are not regarded as immediate liabilities,
 There are some critics who think the only method for France 10 get out from under it's load of debt IS 10 reorganize the financial fabric, as has been the case in a number of other continental nations. This would bring with it enormous hard ships and is to be avoided if at all possible. Premier Horriot has promised that such inhation was not desirable.
 ' What France needs most of all are a few American or British fnanciers to conduct Its finances, re- sulting in taxes sufficiently high to insure enough governmental income 
 to get along and pay off the debts Poincare increased taxes 20 per cent after a hard struggle, and it is pre- sumcd the Herriot. government Is carrying them out, although dis patches from Paris throw doubt upon this point. If taxes were in rcascd 100 per cent the people would save money in the long run and possess a currency that would speedily go back to par without the aid of loans or other financial medt- cine of temporary character That would be the American or British way.
 America has had experience with debased currency. After the Civil War the dollar dropped to value of 50 cents. and it took ten years of financial agony, with the assistance of enormous natural re- sources and a development of in- dustry to bring the dollar back to par. The British in more recent times brought the pound back to responsibility. France can do the same if the right medicine is taken.
 When Thomas \, Edison predicts