PAUSE IN FRANCE

Evening Post, Volume CXXIII, Issue 130, 3 June 1937, Page 9

PAUSE IN FRANCE

REFORMS OF M. BLUM

ECONOMIC DIFFICULTIES

As always happens when, under political pressure, many innovations have been imposed on a country, France is suffering from what can perhaps be best described as economic growing nains, writes P. J. Philip from Paris to th,e "New York Times." < Last summer's social legislation . has. disturbed the balance of the whole system.

There has been some growth and most of what has been done will remain to the advantage of the workers. But that growth was too quick in some directions, as when a boy's legs and arms shoot out beyond his trousers and sleeves and the economic suit as a whole no longer fits. •

That is why Premier Leon Blum has called for a pause in his social programme. To some extent the devaluation of the franc has provided, as was intended, ■ additional cloth, but it was done so meagrely'that.it has notsprovided enough, and there is danger that the supply will be quickly outgrown. While the fact of devaluation has raised prices and stimulated internal trade, it has not yet committed France to trade advantageously in world markets: It has also frightened the usually timid French - investor, for he is much more afraid of new devaluation than he is convinced that by backing the Government with- his money he can prevent \iV ;. ATTITUDE OF WORKERS. Meanwhile the French workman is fairly well satisfied. , Although, the price of bread and other necessities has risen, it has not yet overtakenthe advance in wages which he received for his forty-hpur week. And as usually some, member oif his family, often his wife, is engaged in commerce and getting the benefit of this, increase in prices, he has. not yet started, to grumble above his breath. .'•■'. , Only the civil servants have become restive, and for, tfye moment they have been placated by, Premier Blum's- appeal for patience anS'the promise that something will be. done fpr'them;, at some time in the'lfujure..."... What is most serious in. the economic situation is the deficit in the trade balance. France cannot .afford, another 10,000,000,000-franc deficit like' that of last year. She does not have overseas investments and shipping. to, .compen-' sate toy the same extent as Great Britain In January her 'deficit reached the nearly record figure of 1,342,000,000 francs, with an adverse balance or 204,000,000 francs irijier colonial trade. Much thought is being spent on trying to find a remedy for this situation and great hopes are being placed on this year's exhibition. For France always-in the past has counted largely on the invisible export of ,what tourists bought with foreign currency. Now at is hoped to revive this situation, and while these' hopes may be exaggerated they seem to have .some ground lor justification. - For already there are signs that the exhibition is likely to prove, after the British .Coronation, an enormous attraction. A DISTURBING FACTOR. What is disturbing in the situation is that the big increase in the cost of manufacture «nd retail and the general increase in the cost of living may eatup these profits, as in the case of the export trade. For instance, it is now the custom on the Riviera to put a 3o per cent, service charge on hotel bills. That is unavoidable as a result of the settlement with the employees following last. summer's strikes. But the, tourist is,likely to find it excessiva. What is by far most serious in the general situation is that the outflow of capital is still continuing despite all efforts of the Government to prevent, it short of taking arbitrary exchange control .measures, which Premier Blum refuses to do. This outflow already has'caused the practical abandonment of the cheapmoney policy, which was one of the principal objectives: * of. the Government. . . Other than day-to-day loans are practically at a standstill, and with nearly every industry needing capital to get Into running order on the .basis of the new labour and social laws the situation is becoming difficult for employers bf labour without big resources. In these circumstances it is difficult to forecast what, the outcome of the efforts of the Government and, private enterprise combined or : acting in opposition will be. On all sides the demand is being raised for more than a pause in Premier Blum's social programme. ■ i ,