M. Reynaud's Success The programme of French financial recovery, as
envisaged by M. Reynaud, has much in common with that adopted for British finance in and after 1931. The first step was drastic retrenchment and taxation ; then comes a rise in the market for Government stocks ; and lastly the conversion of Govern- ment obligations from higher to lower interest. But whereas the British process was carried out on a scale requiring very considerable time, ad the main conversion concerned a debt of £2,000 millions, M. Reynaud is Working much more rapidly on a much smaller scale, and the conversion which he has now arranged covers about £20 millions. Even so, it is a very considerable feat—the largest conversion, according to M. Reynaud, ever attempted in France—and important not merely for the £5oo,000 which it will save to the French Treasury, but for the public confidence which it at once betokens and breeds. Recovery to this extent was desperately needed by France at the present juncture of international affairs, and perhaps for the present it is all that bne could ask. Ultimately, however, the insecurity of French finance has rested on the instability of French politics, and in particular on the undue financial power wielded by non-ministerial members of the Chamber. The remedy is plain to see in British practice ; but until France adopts it, her finance will never run smoothly for any really long period.
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