Evening star. [volume] (Washington, D.C.) 1854-1972, 1926-08-30
FRANCE DECLARED
UNABLE TOPAy US.
OR BRITISH DEBTS
Apparent Prosperity Is IIIu-
sion. Bank of England
Head Is Told.
ALL-ROUND CANCELLATION
ONE SOLUTION PROPOSED
Paris Would Forego German Rep
arations Under Such Plan to
Rehabilitate Currency.
By EDWARD PRICE BELL.

~ EDN lAhD INIt Tt bGtI'
BY Cable 10 The Star and Chicago Daily News
PARIS August 30.-'F'rance cannot
pay her debts to England and the
United States. She can ratify the pro
rosad British and American settle
ments. She can make this gesture
Of loyalty to her foreign obligations
hut it is economically impossible foi
her to meet them
These sentences sum up what Gov
Norman of the Bank of England
already has heard from French econo
mistS and fnanciers and what Secre
tary Mellon will hear from them II
he seeks their point of view.
Frances great apparent prosperity
is illusory 1t is the most amazing
of all economic illusions of the World
War. Consider some of its features:
Devastated Area Restored.
The devastated agricultural and in.
dustrial area has been restored mag
nificentlv The farmers are busy buy
ing large quantities of farming imple
mentS. Industries are booming
France, for the first time in centuries
is an immigration country, with
100000 foreign workers within her
borders. There is virtually no un
employment. Shorter hours and wage
conditions are comparatively SatiSfac
tory and strikes are negligible. Paris
is crowded with visitors. The shops
are crammed with luxury articles.
The grocery stores are bulging with
every ina ginable variety of food.
If France were hard up should not
the fact appear in statistics of her
foreign trade? But look at her for
eign trade:
In 1913 France imported half bill
lion francs worth of merchandise. In
1925 she imported $4,000 900 900
francs worth. If it be said that
these are paper francs. consider the
weight of imports. This weight in
1913 was "A 900 900 metric tons, and
In 1925 5000. 900 metric tons. EX-
ports tell Il like story. Their weight
in 1913 WAS ~ ,0O0, 900 tons, and in
1925 more than 30.000,000 tons.
Buys More Than i'm 1914.
Both in buying and selling Fra
Is doing decidedly more business than
before the war. Domestic trade fig
ures reflect similar activity. Prewar
production has been surpassed.
In iron and steel France produced
in 1913 10000 metric tons. This
rate of more than 100000 tons. In
1919 Franco had seven and half
million cotton spindles. Today she
has nearly 1900, 900, while in the
same period her wool spindles have
Increased from less than 2,000. 600 to
nearly 3,0n0 600 French competition
In cotton and wool is causing concern
In the best-estabished British textile
quarters.
As for French agriculture, which
directly SlStains almost half the pop
ulation. it supports now the highest
standard of living in it's history.
In view of these facts, why should
the French worry about the shruken
franc and realize more vividly daily
that Frencn prosperity is illusory?
Capital Is Shrinking.
Because manufacturers, financlers
and business men. large and small, see
that capital Is shrinking with the
franc and that consequently the life
blood of industry is drying up. Per
sons on a fixed income are becoming
impoverished Salaries have lost the
vast bulk of their purchasing power,
There have been attempts at salary
readjustment. but these could not
keep pace with the sinking franc.
Persons with incomes dependent upon
bonds and other investments of lnfteNl-
hle return are facing ruin. How these
So-called renters are suffering is illus
trated thus: One who had 200, 900
francs, or about $50 .00o. before the
war. now has only about $4,000. He
could live comfortably on his invest
ments before the franc fell. but now
he cannot live at all upon them.
If not many persons sympathize
with the RENTER and hold that it Will
be good for him to work. 1t still re-
mains true that his capital has dis
appeared from industry and that In
dustry is Just 50 much the poorer
All classes are adversely affected,
artisans. workers and the middle class.
the middle class worst of all. Every
industry and every line of business
is threatened With paralysis. Even
The farmers, the most favored pro-
ducerS. are feeling the pinch OF con
tracing capital. They sell their prod
uct for higher prices. but the money
they get has relatively little value.
Initiation Is Blamed.
Only physical properties are secure
and what would be the economic Sooo
Of these in a nation economically at
a standstill? Initiating, say the econ
0I0lSlS. CduSeu all tItc AipuSiN' "a
Hation is so easy. so tempting, so
fatal. But the politicians were not
SO sunk in opportunism as they look.
Conscious of what France was sui
fering by invasion and by loss of life.
they said. I'VE are paying enough.
We are the hastion of the whole al
lied defense. Let others furnish the
capital and one day we shall recoun
financially and economically at the
expense of the invader.
That was where the irreparable mis-
take was made. II was made IN
suppoSing that Germany could pay for
the war. II is seen now how Wild
was that dream. 1t is seen that
France must bear huge part of the
loss caused by the war and also must
deal with the question of her indebt-
ednesS to England and America. 1t
has been a cruel disillusionment for
the whole French people.
F'renchmen doubt the future and
diStrust the cnuntry's currency and
securities. While economists hold that
an adequate taxation policy from the
very start of the war would have
saved the national credit and averted
economic disaster, they are pessimistic
now. Their phrase is too late" The
gigantic indebtedness and the confis.
eating action of The imitation have
fCopttrnoH IN tn