A Balanced Budget

For the first time in two years it could be said last week that the French budget balanced. It balanced ("on paper") with a surplus of 30 million francs. This surprisingly hopeful turn of events was brought about by fear. The Deputies of France saw the franc tumble down to 3.39 1/2-c- at Manhattan, a world record for all time, and were at last stricken with the fear that if they refused again to vote adequate taxes, as they have refused for months (TIME, March 15, et ante), the franc might go the way of the pre-Dawes mark.

Lucky Seven. Finance Minister Peret had the satisfaction of seeing this wave of fear carry his fiscal program (TIME, April 5) past the shoals upon which his six immediate predecessors have had their fiscal projects wrecked.*

When Premier Briand dared last week to make a question of confidence out of the hated "sales tax" measure which the Deputies have rejected time and again, the bill passed, thereby increasing the expected tax yield for next year by 12 hundred million francs ($42,000,000). Thereafter 225 million francs ($7,875,000) of added taxes on alcohol were passed, together with a poll tax expected to bring in 570 million francs ($19,950,000). Other miscellaneous taxes passed in quick succession. The whole, together with the taxes passed before the last Briand Cabinet fell (TIME, March 15), totaled a tax increase of somewhat more than four billion francs. This was an accomplishment of which MM. Briand and Peret might well have been proud. Yet the Premier ominously remarked: "I am not at all satisfied!"

No Recovery. While the Deputies' ballots arrested the fall of the franc last week, they failed to give it an upward trend because: One. The "sales tax" passed the Chamber by a vote of only 227 to 103--that is, with 190 abstentions, thereby indicating that the Depu- ties are not sincerely behind it. Two. These "benevalent absten- tions" were due only in part to the fear which the Deputies felt for the franc. The Radicals, especially the Socialists, who abstained did so at a price: the reluctant inclusion by the Government in the budget bill as finally passed of clauses providing "in principle" for the creation of a government monopoly of petroleum and sugar--two products now very largely distributed in France by foreign-owned corporations.

Wall Street Flurried. Potent U. S. oil magnates learned with intense annoyance that these monopolies are seriously contemplated. The U. S. financial press rather hysterically denied rumors that the French Government may be planning to freeze out U. S. and British oil-producing firms and draw all its "monopoly" supplies of petroleum from Soviet Russia. Secretary Kellogg deemed these possibilities so serious that he cabled Ambassador Herrick to report upon the situation. Two days later, however, the French Senate, while it rushed though the new taxes 232 to 12, voted to postpone application of the sugar and oil monopolies. In Wall Street there ensued a modicum of cheer. At Paris, Premier Briand described the Senate's action rather theatrically as "a torpedo directed against my Cabinet." He referred of course, to the possibility that the Radicals and Socialists may open up the same sort of "bitter enders'" fight over the monopolies that they have been staging for months over the sales tax.

Tariff. While the monopoly flurry was in progress, the Deputies still further antagonized foreign capitalists by voting 311 to 39 to increase the import duty on all merchandise entering France by 30%, except in the case of extra parts for agricultural machinery, paper pulp, wheat, sugar, coffee and cocoa.

*Doumer (TIME. March 15); Loucheur (TIME, Dec. 21); Painleve (TIME, Nov. 30); Caillaux (TIME, Nov. 9); De Monzie (TIME, April 20, 1925); Clementel (TIME. April 13, 1925). The three Premiers in whose Cabinets these gentlemen served--Briand, Painleve and Herriot--have each fallen at least once on this same issue.