Prince Valiant

Peace came last week in the bitter struggle between the Riviera rivals, France and Monaco. "There were concessions on both sides," insisted a French diplomat. True enough, but who else these days is wringing concessions from Charles de Gaulle? Not Kennedy, Macmillan or Khrushchev. Only stubborn, tenacious Prince Rainier.

The crisis began last year, when France issued an ultimatum ordering Monaco to align its tax structure with France and end its status as a haven for freeloading French corporations and businessmen. The Monegasques, enraged at the prospect of losing their freedom to pay no income tax to anyone, rallied behind their Prince. Rainier struck back at De Gaulle by issuing a series of three stamps commemorating Louis XII's recognition of Monaco's independence in 1512. Both sides mobilized their resources. France had nuclear bombs and 600,000 battletested soldiers v. Monaco's 80-man palace guard and 170 policemen. France could also cut off Monaco's gas, electricity, postal and telegraph services. But Monaco had a sharper weapon: ridicule. Moreover, Prince Rainier's little principality could halt the "Blue Train" as it passed through Monte Carlo to the Italian border, and could revoke its agreement to collect garbage in the adjacent French town of Beausoleil.

There were some tense moments last fall when French police set up a customs post at Monaco's border and began stopping cars, but cooler heads at last prevailed. Throughout the long winter months, delegates of both states hammered out six separate treaties covering everything from taxes (no income tax for Monegasques or longtime French residents of the principality) to postal rates. Monaco emerged largely victorious. When the treaty was signed last week, Prince Rainier and Princess Grace ended a tour of the U.S., flew back home to receive a grateful welcome from their still tax-free Monegasque subjects.

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