Evening star., 1935-05-28
.FLAND|N DEMANDS
DICTATOR POWERS
Gold Reserve Falls Nine
Billion FranCS-Rate Is
Boosted to 6 Pct.

Copyright. 1888, BY the Associated Press)
PARIS. May 2S.-With a govern
ment demand from Parliament for full
power to restore Frances finances.
Louis Germain- Martin. minister Of
finance. revealed to the Chamber of
Deputies today that the gold reserves
of the Bank Of France had been
diminished by e,000,0 100000 francs
about S594.000, ,000-in the last two
months.
The finance minister told the leg
islators that the rhythm of with
drawals was steadily increasing the
bank losing three billions between
March 90 and May II. three billions
more during the week ending May
"a, and an additional three billions
in the last three days.
His plea to Parliament followed by
a few hours an announcement Dy the
Bank OF France that il was making
an increase in its rediscount rate
to per cent from per cent. the
banks third raise in the rate since
last Thursday. AT that time the rate
was raised to per cent from 2i2
per cent, and It was boosted again
to per cent last Saturday.
Devaluation Denounced.
Germain-M Martin denounced the de-
valuation campaign in France and
declared for economies and bal
anced budget rs the way to restore
finances He declared it ''uniustifi-
able and dangerous 10 devalue simply
because the treasury is temporarily
in difficulty"
There is not state in the world"
he said, which devalued before hav-
ing tried to balance its budget"
The minister warned that devalua-
ton without balancing the budget
would threaten the collapse of cur
rency" and insisted that devaluation
means catastrophe tor the vast ma
jority of the country"
The Bank of France also increased
the loan rate on gold bars TO per cent
from 5l2 per cent. on securities to 6i2
per cent from AZ per cent. and on
30-day rate to per cent from 4 per
cent.
Action Follows National Appeal.
The banks challenge was issued
Immediately after the full cabinet ap-
pealed unanimously to the country to
stand by the franc and after Premier
Flandin had taken a strong stand
against devaluation.
A heavy outflow of gold reserves is
known to have drained more than
5000 100000 francs from the banks
10000 100000 stock in recent weeks
and bankers estimated that on Thurs
day the Bank of France statement
would reveal that more than 500, ,000,-
600 francs in gold had been lost daily
during this last week. (The French
franc today Is worth about $3.50
cents)
Flandin issued a statement while
the cabinet was in session, shortly be-
fore noon, asserting that there was no
peril in the technical situation of
the franc. but nevertheless. the Bank
of France took drastic technical mea-
sures to discourage spectators. All
banks again we're advised by the gov
eminent to cease making loans that
might be used for speculation in the
franc.
''No Sign Of Peril" Seen.
In his statement. the premier said
the government "affirms that the
technical situation shows no sign of
peril to money in the situation created
by the brusque and violent assault OF
the spectators" and that the gov
eminent declares itself hostile to de-
valuation and appeals to all French
men to defend France"
President Lebrun, meeting with the
council of ministers in the premier's
office, signed q full powers" bill
while the opposition in the Chamber
of Deputies organized an ominously
hostile movement.
The government asked for an i'm
mediate discussion of the bill in Par
Lament and the danger of a cabinet
overthrow was freely discussed in
Parliament's lobby.