ESSAYS IN PERSUASION

PART

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be an act of national bankruptcy and shame todevalue the franc, he has fixed it at about one-fifth of its pre-war gold value, and has retortedwith threats of resignation against anyone whowould hinder him in so good a deed.

The figure finally chosen seems about right.There are high authorities in France who arguethat one-sixth of pre-war (150 francs to the £)would be better and safer. But about one-fifth (124-21 francs to the £) has the great ad-vantage of conforming to the rate which hasactually existed for some eighteen months.None of the relevant statistics suggests thatM. Poincare has made the mistake of stabilisingat a figure which involves Deflation. No lowervalue for the franc (in terms of gold) than thatnow chosen has ever existed except during thehectic twelve months from December 1925 toNovember 1926, when internal prices had notime to adjust themselves to the furious fluctua-tions of the exchanges. Moreover, the Budgetbalances with the burden of the rentes on thetaxpayer bearable at the present level. I seeno sufficient reason, therefore, to choose a lowerfigure.

Is the value too low? For that is the line ofcriticism in France itself. There are two chieftests. Is it lower than the figure to which in-ternal prices are adjusted? Does it demand toogreat a sacrifice from the rentier? The officialIndex Numbers, if taken at their face-value, sug-gest that prices are in line with a gold value ofthe franc nearer to one quarter (100 francs to