FRENCH BANK RATE

Hawke's Bay Herald-Tribune, Issue 128, 16 June 1937, Page 12

FRENCH BANK RATE

London Markets Not Affected NOW AT 6 PER CENT. PARIS, June 14. 'ino jjujuii of France rata is raised from 4 per cent. to 6 per cent, The raisipg of the Freuch bank rate. has not afiecled the Londou mai'kets, which have loreseen a new crisis for the franc and have been watching developments without anxiety. A Paris message states that the Cabinet after a icng meeting agreed on . measures to meet }he financiai crisis. Details were not issued, but. it is beiieved they include the Bank of France advaneing to the Government £90,000, 0y0 without interest, the revision of tariifs, higher taxes on tobacco and matches and possibly an increase of rail fares. The Bank of France rate was raised on January 28 last from 2 per cent. to 4 per cent. after 'a period of heavy pressure on the franc. The rate had been ye^uce^ froui 2J per cent. oa October 15 last to 2 per cent., at which it remained until the end of January. The Paris correspondent of the Economist reeently described the French situation as aetually dominated by two maia factors: (lj the Government 's want of authority, and (2) fhe effect of social laws on prices. The threat to the Gov* ernment's authority increases eVery time the ma,sses take the oflensive. But at the same time the general wish for cairn in the country is always appar^ , ent;*and public opinion even if it is favourable to social reforms/is equally.; opposed to dictatorship bf the Right or ; the Left, and" there is no question of abandoning the field to the Commun- 1 ists. Every time that new financiai J difficulties occur, public opinion con-j siders the time ripe for a change in Government, and the fear of riots dis-j appears, But when foreign markets i are themselves disturbed, when Greati Britain must issue a Re-armament Loan, when strikes break out in Londou and the TJnited States, and when costs abroad are raised, then new hope3 are aroused in France, an| the franc i with the Blum Government is once moro saved. Vet the remedy for the want of politieal authority and of ecQuomie and financiai equilibrium hus stUl to be fouud.