The Guardian And Evening Star, with which is incorporated the West Coast Times. FRIDAY, FEBRUARY 13th, 1925.

Hokitika Guardian, 13 February 1925, Page 2

The Guardian And Evening Star, with which is incorporated the West Coast Times. FRIDAY, FEBRUARY 13th, 1925.

WAR DEBTS OF FRANCE. British Conservative opinion on the subject of tiie war indebtedness of France seems to vary, remarks the Lyttelton “Times”, with the fortunes of the political parties of both nations. With 1\ it.cave, Premier of France, and Bonar Law at Downing Street, the subject was regarded as of such exquisite delicacy that even when it was mentioned officially the party journals said nothing or very little about it. “Hats off to France,” was the slogan of Lord Bothermere. and the cry was echoed vociferously in the “National Review,” which considered the expedition into the Ruhr was the finest thing that- had happened since te Armistice. The die-hard Tory view was that Britain must look to Germany fcr repayment of what she lent the Allies. But. following the Conservative victory at the last election in Britain mid the accession of the French Liberals to power, the atmosphere is less sentimental, and France is being asked to impose taxes in order to pay her debts. France owes Britain about £620,000,000 —considerably more if arrears of' interest were to be claim-

cd ami .-lie owes America 081X1,0(10.000. She lent about £700,031),00!) to the smaller Allies, and seems to have very little hope of recovering that sum. Britain, according to the Balfour Note principle, which is still adhered to, has rcdiuod her claim upon the Allies to the amount necessary to repay her own debt to America of £920,000.000. Assuming that this implies a, pro rata claim upon her foieign debtors— the dominions have to pay in full —France would be liable for about half the amount cf her indebtedness, sav £'31)0,000,000. If she were to cntei into a funding arrangement similar to that made between America and Britain, she would have to pay over about £22,000,009 a year to Britain, But recognition of Britain’s claim would also involve recognition of America's claim, and America is not giving any discounts, To satisfy both creditors would involve annual payments of about £-0.000.000 for a long term of years, alnl Franco's worst enemy would hardly venture the assertion that she can i ll' ml io make such a contribution. The latest cable messages on the subject show that the French Government is going to obtain data regarding, H> cmiiparative wealth of France and other countries. Such a computation is made by one or two of the financial ,•militaries. and we take tho following from “Moody's Government and Municipal Rating Book” : National Wealth per Capita, Hollars I.S. A 2(548 Britain 2333 France 1879 Germany 1335 Belgium 134(5 Italy 7(1(5 The computation, for what it is worth, shows that France is not so rich as Britain by a considerable margin, and since she has earmarked most of her Dawes Scheme receipts—ranging from £2(5,000.000 this year up to £(53,000.000 in 1928-29 —for the restoration of devastated areas, the only sources from which she can draw the money are either foreign or domestic loans or taxation. The French Budget with the exception of one year, 1921, lias not balanced, mid bus not been framed to balance, since the war. Taxation revenue has been doubled since 1919, and the annual deficit, which was 38,000,000,030 francs in 1919, has been reduced to about 2,000.000,000 francs. More than half of the French annual expenditure already goes to debt service and less than a quarter to military and naval purposes, and she cannot face a much larger debt service without having to curtail her defence expenses. Taxation to-day amounts to about 300 francs a headat current exchange rates about £7, with does not look excessive compared with New Zealand's .£l2 (is, but it must be remembered that the earning power of New Zealanders is probably greater than that of the people of any other nation. It is likely that, under M. Herriot’s guidance, France will make an effort to satisfy her creditors, but the discrepancy between her debts and her ability to pay is a large ( one. and the French proposals, when ( t.ho.v eventaude, may 'not he very impressive. ,