Budget

M. Etienne Clementel, Minister of Finance and le Senateur de Puy--de--Dome, presented to the Finance Committee of the Chamber of Deputies the budget for 1925. A feature of the new proposals is the retention of Premier Poincare's hated 20% tax increase (TIME, Jan. 28). No loan was suggested, although it had been widely circulated that one would be asked for.

Expenditures reached the record figure of 32,500,000,000 francs (about $1,700,000,000) ; receipts amounted to only 26,500,000,000 francs (about $1,400,000,000). The difference--about 6,000,000,000 francs--is to be met by rigorous enforcement of the income tax law and the imposition of a new tax on land values.

Included in the expenditure column is 700,000,000 francs (about $37,000,000) for increased pay for state employes (one fourth of what they asked) ; the cost of the year's reconstruction of the devastated regions; 1,000,000,000 francs ($53,000,000) to take care of obligations maturing during the fiscal year.

It was claimed that France would have, for the first time in ten years, a balanced budget. That was not entirely the truth. Among the credits appeared an item of 800,000,000 francs (about $42,500,000) expected from the Germans under the Experts' Plan. In the past, France has theoretically balanced her budgets by crediting payments from Germany that were never made. The present budget is following a precedent, not creating one. The point is somewhat academic. Germany, no one doubts it, will pay; nevertheless, the principle of crediting money before it has been received is obviously unsound. Critics of the Minister of Finance repeated the well-known proverb : "Don't count your chickens before they are hatched."

In his speech to the Committee, M. Clementel said:

"It marks the end of the policy of raising loans to meet normal charges-- a policy which threatens to engulf France in financial quicksands. Once the deficits due to previous budgets have been regulated by a loan of liquidation, any appeal to the national thrift must have but one object--consolidation of the floating debt and completion of the restoration of the devastated region. . . .

"Thanks to the plan of the experts and the London Agreement, France can today hope to see Germany at last execute the engagements she has solemnly taken. The Allies will watch over the execution of these engagements. Germany's payments are steadily growing and henceforth are definitely fixed. They should, when the plan is fully working [in about two years], provide funds for the redemption of war loans and permit a policy of financial reformation that will gradually give our national money back its value and so reduce the cost of living."