Evening star., 1935-02-03
BY JOSEPH CAILLAUX,
President of the Finance Committee
of the French Senate,

BY JOSEPH CAILLAUX,
President of the Finance Committee
of the French Senate.
" RANCE no doubt cuts the figure
- of hide-bound and perhaps
even an under developed nation
L in a world where principles
once regarded as Sacrosanct are
now challenged every day in the well
ter of economic experiments propa-
gated by irresponsible theorists. On all
sides we see governments Tightening
their grip and stamping out the last
traces of private enterprise by the
sheer weight of regulations; yet the
French prime minister is determined
to maintain regime of liberty, con-
trolled, indeed, but safeguarded. While
almost all states seek the solution of
their troubles in monetary manipula-
tion, France has asserted her rigid
determination to maintain the in
tegrity of her currency.
The reason is not that she has eS-
capped the crisis, for it has attacked
the very foundations OF her economy.
But she believes that her suffering is
the fitting punishment for the folly
that went before, and that to try to
mollify its effects by artificial means
is to run the risk of prolongation, if
not. indeed, of aggravation.
Nowhere is her position so clear as
in the sphere of finance. For two
years the government has striven to
adapt its mode of life to the unfa-
miliar conditions of the crisis, and the
same passion pervades the whole ma
tion. A heroic decision and an ardu-
GUS policy-but already it Is being re-
warded by happy results!
Deficit First Symptom.
In public finance the crisis began
a budget deficit, difficulties In the
treasury-these were the first symp-
toms in our country. But here also
did the first signs of recovery appear.
Swollen beyond all reason in the
PROSPEROUS years to which short
sighted policy could see no end, the
budget of necessity had to undergo
the first virulent attack. Even in 1880,
when the decline in business activity
was scarcely perceptible. the budget
showed deficit of $500 ,ooo, 600 francs.
Nor would the financial outlook have
been disturbing then if maximum
expenditure had been fixed, to be
scaled down gradually into proportion
with economic necessities. But the
budget carried with it the seeds OF
automatic growth sown by the liberal
hands of prodigals, quite needless OF
the troubles being stored up Tor TO-
morrow. ,,.
framed between an expenditure
that was forced to mount and an in
come tumbling faster and faster with
the growing stagnation OF industry,
those whose heavy task it was to pre-
scribe for the sickness of the nations
finances might well have lost hope
of being able to accomplish their mis-
sion by dint of any normal expedlentS.
And vet, backed by the unanimous
opinion of the nation, they have Sc
lected the avenue of sacrifice and
strict economy.
Surplus in Estimates.
Necessity forced on them this thank
less task of un1inching severity, put
with the irrefutable evidence OF ng--
ures the results have been recorded
in recent estimates Against an ex-
penditure at 46,es4 ,000, 900 francs
stands a revenue of 47,022, 600 ,0OO-
thus showing an anticipated surplus
of $4,000, 900.
OF course, these are but estimates,
and it would doubtless be unwise to
assert that they will prove to be
exact in every detail. Already, IN
deed, the Chamber has been LED 10
vote an increase In the expenditure
ALLEGATIONS, which, through extreme
regard for economy, the government
had fixed at figure Incompatible with
the smooth working of the services,
and experience shows that forecasts
may prove incorrect, even with sucn
notifications as this. Is not the
necessity of doubling even the most
careful calculations and the most
certain expectations the hard lesson
which present conditions force on our
consideration?
Perhaps tomorrow we shall be driven
to meet expenses of whose existence
we do not even dream today; per-
haps a new setback to general trace,
impossible to foreSee, will suddenly
appear and reverse the upward-bend-
ing curve of budgetary receipts. NO
one can be certain, but it SENS at least
permissible to hope that, even should
q new deficit appear in 1885, it Will not
become imposing enough to hamper
the freedom of the treasury.
Entered Crisis Burdened.
Those who reriember the position in
1929. with the billions piled up In the
public vaults by a management then
thought provident, may be surprised
to learn that the treasury entered on
the crisis burdened with dead weight
Of liability. But this surprise may be
modified by further recollection Of the
warning, repeated again and again,
that country should have the elas-
ticity of its budgetary resources as It's
sole reserve against contingencies.
Warnings were rewarded only with
scorn heaped on their sponsors. But
events brought striking confirmation
to that "pessimism"!
Greedy appetites, indeed, were not
slow to rend and devour carcass
which neither feeble ministers nor liz
informed Parliaments were able TO
protect. They saw to it that sur
pluseS yet unborn were mortgageo IN
advance for their especial benent.
Thus 1t was that on the eve OF the
crisis the treasury retained nothing
but these charges on It's earlier sur
pluses. Compelled at once both to
honor its own maturities and to rem