[126] The British Treasury has issued statements showing that the French people at the end of last year were paying £2. 7s., and the British people £15. 3s. per head in direct taxation. The French tax is calculated at 3.5. per cent. on large incomes, whereas similar incomes in Great Britain would pay at least 25 per cent. This does not mean that the burden of taxes on the poor in France is small. Both the working and middle classes have been very hard hit by indirect taxes and by the rise in prices, which is greater in France than in England.
The point is that in France the taxation is mainly indirect, this falling most heavily upon the poor; while in England it is much more largely direct.
The French consumers are much more heavily taxed than the British, but the protective taxes of France bring in comparatively little revenue, while they raise the price of living and force the French Government and the French local authorities to spend larger and larger amounts on salaries and wages.
The Budget for the year 1920 is made the occasion for an illuminating review of France’s financial position by the reporter of the Finance Commission, M. Paul Doumar.
The expenditure due to the War until the present date amounts roughly to 233,000 million francs (equivalent, at the normal rate of exchange, to £9,320,000,000) whereof the sum of 43,000 million francs has been met out of revenue, leaving a deficit of 190 billions.
This huge sum has been borrowed in various ways—26 billions from the Bank of France, 35 billions from abroad, 46 billions in Treasury notes, and 72 billions in regular loans. The total public debt on July 1 is put at 233,729 millions, reckoning foreign loans on the basis of exchange at par.
M. Doumer declares that so long as this debt weighs on the State, the financial situation must remain precarious and its credit mediocre.
[127] January, 1921.
[128] An authorised interview published by the daily papers of January 28th, 1921.
M. Briand, the French Premier, in explaining what he and Mr Lloyd George arranged at Paris to the Chamber and Senate on February 3rd, remarked:—