As the French Government is acting in close contact with the Treasury authorities of Great Britain and the United States of America it is probable that every effort will be made to avoid th unfortunate incompatibilities which.partly contributed to the failure of! Will fight to establish beyond all last September's devaluation of th franc. If the present devaluation is to be successful it is essential that the burden of public debt should be reduced and that a rise in revenue should be facilitated by enhanced. prices and a revival of trade. In carrying his devaluation last September M. Blum was
of the margin for the operation. The twelve months late in the selection sharp rise of French commodity prices, dating from the middle of 1935 had been lar in excess of the world level and had been ae centrated by the social legislation and wages agreements sanctioned by the new Socialist. Government The 30 per cent. devaluation was barely sufficient in the most favour: able conditions to restore equilibrim; it would have been easily effective a year^ earlier, but as things were it was considered by good judges that a 40 per cent devaluation would have given M Blum the margin of safety required Apart from that purely technica) question the new Government heavily handicapped itself by associating its monetary policy with vindictive measures which anta ganized capital and thus made it difficult to encourage repatriation and. dishoarding.
Belatedly in December the Government attempted to regain the confidence of the -capitalist by issuing a new loan for which subscriptions from holders of gold Certificates were accepted on advantageous terms. This was not completely successful because the gold was not accepted at its ful market value and holders were reluctant to take a Government bond in payment instead of cash. Moreover in its efforts to finance rearmament the Government was compelled to resort to disguised inflationary borrowing, its pi being further prejudiced by its own action in bringing the Bank of France under state control Pressure from the extreme left wing of a left-wing administration led to j the Government's adoption of policy which fatally took a middle course. It was willing to wound but afraid to strike the capitalist system. Thus measures which required for their success the cooperation of capital were obstructed by other measures which were designed to penalize the very interests whose assistance—wa: essential. The result has been seen lin the revival of a serious flight from the franc, on which M. Vincent Auriol's statement has been vividly illuminative—between. June and [June 28 Frs. 7,700 millions worth of gold outflowed; Treasury Funds. which stood at Frs. 2459 millions on June 15, fell to Frs. 1,483 million. on. June 23 from which date a "mass flight of capital" began. M Chautemps has now obtained wide powers to check the deterioration His success in restoring the position will depend mainly on the extent to which the British and American Governments can continue to support the franc and that probably depends in turn on the new French Government's ability to avoid further disastrous concessions to anti-capitalist prejudice.
The present situation may be fairly summed up as connoting the complete ess of ground which. was expected to be gained by the devaluation of last September. M. Chautemps will, no doubt, appreciate the lesson thus taught. His successful tackling of the crisis will depend on his adoption of a_percentage which will be adequate to restore equilibrium ' between the franc and the dollar. M. Blum made the mistake of looking to a minimum percentage and thus was unable to secure the full advantage of the operation, apart altogether: from his other self-imposed handicaps.
Those were unfortunately conclusive in destroying all chances of success for they involved the association of political prejudices with there will now be two fights within a few weeks of one another for the "world's heavyweight championship." Both will be fought in London, if Louis can arrange terms suitable to himself and his managers. Louis will fight some heavyweight yet to jhe chosen, perhaps Jack Doyle, per-[haps Len Harvey, perhaps Foord. But he will nat fight the undisputed champion of the British empire, Tom arr; and this fact will make farcical the claims of his sponsors that he doubt his claim to the world's crown. ff that were really his object, his choice is easy; he should meet his conqueror, Max Schmeling, or otherwise the winner of the fight between Schmeling and' Farr, Until he meets one or both of these fighters there will be few except the shareholders in the boxing commissions, boards, unions, and other pseudo-legal bodies involved, who will believe that he, as did his predecessors, triumphed over all pian
Text read from the printed page and cleaned; old type leaves the occasional error.