Le Boom

For a year, Frenchmen have been flocking to the Paris Bourse, demonstrating a faith in their economy that has long been lacking. With hoarded francs or those repatriated from the uncertainty of Indo-China, they furiously bought stocks, driving the market to dizzy heights. Stock-exchange volume doubled in 1954, added still another 50% this year, soared with every scrap of good news. Powered by Esso Standard's oilfield discovery at Parentis-en-Born near Bordeaux (which nearly doubled France's domestic oil production), Esso stock went up from 7,000 to 90,000 francs in less than a year. Other shares rode along, though many paid only 2% in dividends and some as little as 1%.

A fortnight ago, with many prices overinflated, the inevitable shake-out came: the stock index tumbled from 333 to 279, with some losses up to 30%; Esso fell to 77,000 francs as brokers crowded outside the Bourse, where much of the trading goes on (see cut}. But it was not the dreaded le krach, and it did not last long.

Last week the Bourse firmed and stocks turned up, some issues recouping 10%.

Said influential L'Information: "We feared a Black Friday. It didn't happen." Gallop Halted. It did not happen because the French economy, despite the course of government, has been growing steadily stronger. Industrial production rose to a peak of 175 on the index (1938 equals 100) at March's end, up 20 points over a year ago. Steel production in the first quarter hit a record rate of 12,800,000 tons annually.

The galloping inflation that has sent living costs soaring since war's end finally seems hobbled. Prices have held steady despite a wage hike of nearly 6% in the past year. The long-queasy franc has strengthened, and the black-market rate of 368 to the dollar is closer to the official rate of 350 than it has been for years.

There has not been a major strike since 1953, despite Communist control of most of France's unions.

Speak of Miracles. But France still has plenty to worry about. It lags in housing.

Though it lost more dwellings in the war than did Britain (7.6% v. 6.5%). it has rebuilt only 500,000 homes v. Britain's 2,000,000. Despite record sales abroad, the foreign-trade deficit was $49,500,000 in March--partly because France stubbornly concentrates on exporting such low-profit items as textiles and semifinished steels. Industry, hit by high wage costs and elaborate fringe benefits imposed by strong unions and by government fiat (to avoid strikes), has tried to recoup by price-fixing and cartel schemes rather than modernization and better production methods. Nevertheless, U.S. Ambassador Douglas Dillon (onetime board chairman of the Manhattan investment firm of Dillon, Read & Co.) last week surveyed the French comeback from World War II and concluded: "It is hard not to speak of miracles."

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