STARTLING FIGURES

Taranaki Central Press, Volume IV, Issue 461, 1 July 1937, Page 5

STARTLING FIGURES

DEVALUATION OF FRANC Huge Transfers Of Gold Startling figures showing France’s financial plight were given by M. Bonnet before the vote on his proposal, which ultimately was approved by 20 votes to 15. with eight abstentions. M.'Bonnet revealed that £47,250,000 worth of gold left the country between June 1 and June 22, and £22,250,000 in gold between June 23 and yesterday. There was only £152,000 ih h'and that morning, and the Government was obliged to borrow £3,636,000 from an autonomous State fund. It was impossible to maintain the franc at: the present rate. The Government proposed to allow the franc to find its own level. He revealed that the franc equalisation fund had no longer gold on hand. It was expected that M. Bonnet at a later stage will denounce the threePower monetary agreement with the assent of Britain and the United States. This would eliminate the necessity of maintaining the equalisation fund, which at present holds about £100,000,000 sterling in bank notes, but no gold. Meeting Obligations. M. Bonnet is reported to have told the finance committee that he will meet’Treasury obligations during the year, et least partly, by raising the upper limit of the Government’s current account with the Bank of France by £100,000,000 to £150„ UOO.OOO. He said the ordinary Budget show-.d a deficit of £70,000,000, which would be covered’ by new tax ation. It is regarded as certain that the Government wishes to be able to de value further if necessary. It is believed the Government contemplates a fall from 110 to 125 francs to the pound. The Bank of France announces tha> pending the decision of Parliament it has suspended all exchange oper ations. When the Chamber session re-open-ed this evening M. Schmidt, the -recorder for the finance committee, stated* that the Government’s financial proposals had the full support of the United States and Britain. Mr Schmidt added thtat the Government proposed sn increase in income tax; in certain indirect taxation and in railway rates. The sitting Was suspended at 1.30 a.m. owing to Communist disorder* Deputies immediately raced to the refreshment room, where angry arguments culminated in fist fighting between Communists and Right Wing deputies, vho were separated by the sergeant-at-arms. When the Chamber resumed at 2 a.m. Right Wing members demanded the suspension of the Communist fighters. This caused pandemonium, with deputies screaming insults at each other. Feeling ran so high that M. Herriot again suspended the sitting. * M. Bonnet said he wa« determined to balance the Budget before the end

of the year. He insisted that Franco no longer had the choice of various solutions; she must give the present Cabinet full powers. The drain of gold from the country and the maintenance of European peace depended on a strong France, and to be strong France must have healthy finances. The Chamber adopted the Bill by 380 votes to 228. It will now go to the Senate.