Evening star., 1935-02-03

jealousy held by frightened thrift,
in the vaults of banks and in the
stockings of workers.
And is this surprising? Tracked
down and despoiled on every side,
French capital has learned by hard
experience the instability of the in
vestments it is offered. The misfor-
tunes of its debtors, and more often
their bad faith, have lost it tens of
billions trustingly reposed in foreign
custody before the war. And worse
has come since, for the most catas-
trOphic losses did not accrue until the
devaluation of the franc, which, in
voluntary though it was, rent four
fifths of their value from government
securities at one blow So now hoard
ing is the only policy for our disillu-
stoned thrift. Even the wary will
hazard 35,000,000,000 as a possible
figure in estimating our buried capital
This attitude toward saving would
have but little consequence if its ef-
feet were limited to depriving the
country of revenue which it could be
drawing from new investments But
this Is not all, for the pushing up {:
interest rates which it involves strong
ly influences the national economy
Tending toward lower levels in all the
rest of the world, in France the rates
mount upward. The average yield on
French government securities, which
was $40 per cent in 1881 and 473 per
cent in 1882, has risen subsequently
to more than 512 per cent and is
tending to slow down the financial
activity of the whole country. Again.
the monthly average of new issues.
which stood at 2,500 900 900 in 1880.
has fallen to a few hundreds OF mil
lions during the last few months. The
turnover on the Bourse has declined
to such an extent that on some occa-
sions it has been extremely difficult
to find a buyer or a seller. as the
case may be, to carry out even the
smallest order.
Business Hindered.
This atrophy of the market has
affected not only the Government
In precluding private enterprise from
obtaining vital capital, and in for
bidding the institution of conversion
operations by which to reduce the
financial burdens that in many cases
are crushing enterprise, it constitutes
one of the major obstacles preventing
business activity from adjusting itself
to changed economic conditions.
It is no eXaggeration to say that
today the problem Of interest rates
dominates the position of private en-
terprise, and that solution of this
problem is one of the essential tasks
before the new government. And
there can be no doubt that this task
will be made lighter by the exceptional
strength Of our currency.
At no time since the crisis began
has the stability of the franc been
the subject of any serious doubt Ad-
mittedly, there have been demands
for new devaluation, some Of which
have even found their way into
Parliament. But the most ardent ad-
vocates of such a policy always speak
of it as the outcome of an arbitrary
act of the legislator and never as the
inevitable counterpart to a period OF
unstable money. And, further, for
three years past many Of the great
international markets have sent their
funds to France for protection against
depreciation; the influx of these
funds, making the greater part of our
credit balance of payments, pays the
highest compliment to the stability OF
the franc.
Needless of those who hope to OBJ
tain unjustifiable credits. the Bank OF
France has refused to allow itself to
mortgage its precious gold reserve.
Instead of exploiting the credit facili-
ties provided by the size of this re-
serve, the bank has preferred to limit
its commitments to an exceptionally
modest figure. There can be no doubt
of the integrity of currency whose
note covering exceeds 80 per cent.
Does this imply that the Bank OF
France, weighed down by dull respon-
sibility, will always maintain its pres
ent attitude of passivity? Indeed, 1t
doss not, and if ever such sugges-
ton were put forward its whole his
tory would reiterate denial.
Before the war the Bank of France
was eager to support harassed foreign
banks-the Bank of England not ex-
cepted. We are ready to repeat our
help as soon as currencies are stabil-
ized and present policies renounced.
Should not all present endeavor be
toward such international collobora-
ton?
Pursued Traditional Policy.
Three years of crisis have given
proof-if, indeed, such proof was
needed-that no country, however
strong, however vast its dominions,
can boast ability to solve all its diff
culties unsupported. France through
out has pursued the policy dictated by
her traditions and her love of order
and reason. Other countries have
taken another road.
It is no injury to either side to
assert that neither has yet attained
its set objective. No longer can
countries focus their problems with
regard to their immediate interests
alone. Common hardship has re-
inforced the international links forged
by economic evolution. What avails
1t to France that she has set her
public finances in order once again,
and that she has maintained the value
Of the franc unimpeached. II suddenly.
tomorrow. the world crisis returns to