New Britain herald., 1926-08-30
CURRENCY sLUMPs
IN EUROPE

AAASA Ai-AeAbAOAif lA4S SAINT ApNlltliNS
having been repeated in Russia.
Austria, Germany, Hungary and
Poland. The broad resemblance be-
tween the experiences Of the vari-
Gus countries mentioned has been
quite remarkable.
The first phase is where, al
though the work OF imitation is al
ready going on, the people do not
realize it and complain only of
rising prices. During this period
everyone at home and abroad is
confident the value of the national
currency is bound to return to its
pre-war level and speculation is
common in the foreign exchange
market.
This was especially conspicuous
| in the case OF Germany when peo-
! pie all over the world continued to
speculate in the mark long after
it had become hopelessly depreci-
ated.
The second phase is when peo-
pie abroad lose faith in the depre-
ciated currency and dump their
holdings on the market in the ef-
fort to save what they can. At this
stage foreigners become very un-
popular in the country
The third phase Is when this
panic finally extends to the nation
itself and enormous amounts of
capital leave the country in order
to be converted into the exchange
OF some stabilized country.
The fight OF capital precipi-
tates the final collapse. when peo-
Pile lose their faith in the currency
SO completely that they rush TO
turn it into goods the moment they
get it.
The first evidences of this last
stage in France were reported
| from Paris during July, and fol-
lowed upon the enormous exporta-
tons of French capital. 1t was
then that France showed signs of
being on the brink OF the final col
lapse OF her currency.
But with the advent Of the Poin--
care national cabinet on July 23
confidence was restored in a de-
gree sufficient to halt the persistent
drop of the exchange and even to
turn it upward again.
In the other countries where
this has happened it has later
proved to be only temporary, and
it has been necessary to resort 10
Sterilization after the currency has
become virtually worthless.
But as the French currency is
even now in very much better
state than currencies of the Central
European countries before they
finally completely collapsed, it does
not necessarily follow that France
will share the fate of those coun-
tries. With her great wealth and
resources many experts believe she
can stabilize her currency success
fully without allowing it to become
first absolutely worthless. This
work Poincare has started 10 DO
with resounding efficiency.
What the French people are pay
ing in increased cost of living while
this is going on can be gathered
from the rise in prices. II an in
dex figure Of 100 is taken to rep
resent the wholesale prices of As
commodities in France in 1913, the
index figure stood at 702 in 1926;
in other words, the cost of living
in France is seven times what it
was in 1913.
Poincare is meeting with the APP
proyal of foreign observers in hew-
ing closely to the report of the
committee of experts appointed by
the BRAND cabinet, and it is nota-
BILE that he secured through par
lianentary methods practically the
arbitrary powers which BRAND and
Caillaux had asked for previously
and which were denied them.
The financial future of France,
therefore, has greatly improved
since the advent of Poincarc, and
as he also is of the opinion the
foreign debt settlements should be
put out of the way, it is likely
there will be much of construc-
tive nature originating in Paris
when the French parliament reas-
sembles in October. At present he
is having a breathing spoil during
which TO consolidate his plans.
The world looks forward to his
probable achievement with opti-
mism.
The renewed drive to make New