Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1926-07-23
THE SITUATION IN FRANCE


The uncertainty lowering over
france Is somewhat portentous.
When deeply stirred the people of
that country have shown themselves
capable of violent actions and late
ly they have been exhibiting symp-
toms calculated to make intelligent
observers apprehensive. The Shift
Ing Of cabinet within a period of.
two days, the crowds with lowering
looks standing about while law
makers crate and scheme indicate
that the Gallo pulse Is feverish.
Though we may hardly expect to
form an accurate estimate of the
situation about which reports are
confusing there are brought out in
these reports certain salient points.
France is undergoing the penalties
OF financial imitation. Germany had
to undergo them, no country per-
Knitting imitation of It's currency
may escape. Germany reduced her
internal debt by cheapening her
money; she also aided the have
nots in getting possession of the
property Of the HAYES. 1t mattered
not that family by pinching and
saving had laid by for old age only
TO find that owing to the cheaper
Ing of money their savings would
not support them. The middle class
was robbed of its savings in large
degree. Doubtless that is what is
happening in France. Cheapening
money is a process with definite
results.
Eight ministers of finance have
been compelled to resign within the
last year and a half, the problem
before them becoming all the while
more acute with each change.
France today is carrying a burden
OF three hundred billion paper
francs, her internal debt. There
has been talk of reducing these to
As billion gold francs-easier said
than done 1t appears and meanwhile
the paper francs are drifting into
inter worthlessness.
France has a foreign "pollticaT
debt of more than eight billion dol
lars, her fixed charges call for So
per cent of all her revenues and each
year the country spends more than
received So increasing her internal
debt. The Bank of France has in
fated the currency by large issues
of notes some in excess of the legal
limit, until crisis impends. The
ratio of the gold reserve has drop
ped from 70 in 1913 to almost moth
ing and there has been rise In
Wholesale prices since 1913 of ap-
proximately ESQ per cent.
Meanwhile French industry has
increased its production and is ap-
parently prosperous; the devastated
areas have been practically restored
and for the past two years France
has had a balance of international
trade in her favor. Agricultural
production has been good and the
prices so profitable that the peas
antry have been paying off mort
cages. An attempt sharply to re-
strict public and private credit
would have depressing effect on
these conditions and so the problem
becomes an intricate one. Business
depression and the drying up of
sources of revenue would for the
time being greatly aggravate con-
diuons. The French rulers are
ha1 hat {Io II
gers Of further imitation, though the
latter must lead inevitably to a
crash.
Manifestly balancing of the bud
got is an insistent need Likewise,
until France makes ARRANGEMENTS
for the settlement Of her loans from
other countries she Is not likely o
receive from the capitalists of those
countries the loans needed. This
is now tacitly admitted by French
Government leaders. The Berenger
agreement with this country on
terms appears to be the limit be-
yond which this country will not go.
This agreement provides briefly
for the payment to the United
States over period of 81 years of
a capitalized debt of s4,025, 000, 900
in annual installments beginning at
80 million dollars in 1926 and in
creasing to 35 million in. 1880. and
then beginning again by the pay
ment of s1,350.o00 in 1881 and con-
tinuing to increase year by year up
ITO the amounts of 116 million and
113 million dollars in 1886 and 1887
Respectively, at which time the
agreement terminates. The bonds
ISSUED by France under this agree
Snent will bear interest at the rate
of per cent for the first decade
after 1880, at 2 percent for the fol-
lowing decade, at 21a per cent for
the following eight years, at per
cent for the next seven years and
tat the rate of Sh per cent after
1865"
This IN effect, Secretary Mellon
declares, amounts to cancellation Of
our loans to France during the war.
securing payment when interest is
considered, Of post-armistice loans.
<aat1,re of the situa ton Ia the