March 12, The statement that one of the chief reasons for the coming flota tion of.the French Defence Loan is to bring about the repatriation of capital, is an interesting indication as to the extent of the meaning of the words "national defence" and the Important. ramifications which they "represent, Prior to. the devaluation of the franc a large amount of French capital went broad for the purpose of being: reimported when the - currency change was effected, thereby making a profit for the manipulator. Devaluation was attended by dis. appointing results, due in part Toast to the confiscation of the profit secured by repatriation of capital. This measure may be said to embody a political principle and to be approved on moral. grounds, but when put into force Its justice is found 10 be equivocal; the impossibility of penalizing all. pro-Mteers made the penalizing of the few an injustice. On the other hand the return of funds after devaluation to Holland and Switzer~ and suggests that the same pheno-cuon may be witnessed in the case of France now that M. Vincent Auriol has retreated from his Tt may come a that France Quickly again raising a loan after the very recent negotiation of the £40, (000,000 credit with Great Britain, But that operation proved to be a success, even though there was re~ fret that France should find hersd under the necessity of borrowing abroad again, and the terms of the Toan were generally accepted a3 satisfactory. Tt. is. reasonable to Suppose that this fact encouraged the French Government to embark on this new loan, reported to be in the neighbourhood of ten milliards of francs in order to bring back Into France much capital which still remains expatriated, Had it not been for the goveri= ment's policy of taking the profit out of repatriation, and the general Tack of confidence which then existed as to the immediate fnahial future, it is more than likely' {hat there would have been no need to have gone abroad for the money found in Britain. The loan obtained there was at the time looked upon a stop-gap to enable the French government to Took round, consolidate the advances which have been made in other spheres, and tis ultimately effect an improvement in. the fnaneial situation, Everywhere, except in the realm of finance, optimism existed a month ago. Tidustry, while' not booming, Was recovering rapidly, in spite of heavy. increases in manufacturing costs consequent upon higher wages, paid "holidays and the forty-hous week, though these by increasing purchasing power will in the ultimate event assist towards recovery. The decision to issue this Internal loan may, therefore, be taken as an indication that' the French Government believes that, 18 a result of its change in policy, atmosphere. favourable to. its success has been created, Whether 'M. Blum's estimate of the position {s'a true one or not will be seen in the course of the next few days, though the indications are that his optimism wil be justified. must be remembered however, that much of the recent flight of capital from France was due to rumours that the government intended devaluing the Frane to its lower legal limit of Frs, 112, That has been strenuously denied on a number of occasions, but the fact that the Government' can and might do s0, undoubtedly has the effect of inducing those, who already have their money abroad, to keep it there {in view of the greater profit which would be made if indeed the devaluation eventually was adopted. great deal depends upon whether the owners of exe patrioted capital believe the governments assurances, and there Is something to be said for the contention that the nation's interests in this matter would best be served by ponging the franc at the lower level simultaneously with the flotation of the loan, The uncertainty created by the rumours would be eradicated once and for all, apart from any of the other benefits which supporters of this step never fail to emphasize, such as an increase in the influx of foreign visitors to the benefit of of those duistrics which eater to their needs, and which for some years have been in none too good a way. In the deadlock with which M, Blum has been faced for some time past, where economic recovery has been wailing on the restoration of con Adence which, in its turn is itself wailing on the improvement, 'M. Blum pleaded for patience. 'That he was wise in doing so. is clear from the undoubted improvement which has taken place since' he came into power. For example the Budget deflect which rose between 1930 and 1935 from £38,000,000 to £90,000,000, will, itis estimated for the present year be reduced to £43,000,000, " Large classes workers are receiving better wages, thus reviving the home market, reduced to stagnation by a long period of deflation. In the face of all these facts, the only conclusion which can be' reached is, that" M. Blum has ¢hosen the right' moment for issuing this new loan, That this will prove to be correct will be the desire of all who have watched with admiration the patient and careful manner in which he, has" handled the affairs of the vation during his very trying term of office,
Text read from the printed page and cleaned; old type leaves the occasional error.