France - Report on France

IEORT ON FRANCE Prepared By:, G. Stewart Mason November 1947 ______FILE COPY TAiB OF CONTENTS Page No. INTRODUCTIOIT 1 I. FINANCIAL SITUATION 5 Budget 5 Currency and Credit 7 External Debt 8 II. IMPORTS AND EXPORTS 9 Imports 9 Exports 10 III, BALANCE OF PAYMENTS 13 IV. RESOURCES 14 V. PRODUCTION AXD DISTRIBUTION 15 A. Industrial Production 15 3. Agricultural Production 18 C. Distribution of Food Supplies 19 VI. PRICES AND WAGES 21 VII. M1UNPOWER 22 NOTE 25 TABLES Table I Budget Table II Public Debt Table III Program of Imports for Second Half of 1947 Table IV (A) Provisional Balance of Payments for 1947 (B) Pro'visional Current Balance of Payments (C) Estimated Balance of Payments 1946-1949. Monnet Plan Figures s Submitted to Bank May 9, 1947. Table V (A) Comparison of Status of French Payment Agreements 1946 and 1947 (B) Detailed Status of French Payment Agreements for September 1947 Table VI Status of Public Holdingsof Gold and Foreign Exchange, 31st August 1947 Table VII Figureq of Coal and Electricity Production Table VIII Agricultural Production in 1946 and 1947 Table IX (A) General Index of Wholesale Prices (3) Index of Retail Prices of Paris (C) Indices of Hourly Wages Table X Means Used to Cover the Need for Financing in the First Six Months of 1947 ANNMKES Annex I Circular Concerning Credit Restrictions, 10th October 1947 Annex II September Bulletin of Monthly Industrial Statistics Annex III Provisional Report of the M1onnet Plan, First Six Months 1947 Annex IV Note on Kan-ower Annex V List of Recent Bond Issues REPORT ON FRANCE Bys G. Stewart Mason - November 1947 The-material used in this report was gathered during n7 visit to France with M4r..Walter Hill from July 23 to August 18 and two later visits, one on 6th to 10th October, the other from October 26 to November 2. In order to keep the report short, it is proposed to give a brief outline of the situation as a whole with short notes on the various aspects of the economic situation following, Tables attached show in detail the figures referred to in this report and annexes will give sources of infor- mation which it is assumed are not readily available. To save an immense amount of typing the annexes have not been copied but are available if desired. INTRODUCTION In assessing the economic situation it seems most necessary to draw a distinction between the long-term and short-term viewpoint. The long-term situation gives cause for some hope and it is certainly better than in some 4uropean countries in that a solution of France's present problems lies in the hands of the French people and does not depend so much on the solution of external problems. Since liberation the French effort has been considerable and resources have been increased. Manpower is fully employed. Transport has been put in order. Industrial production by and large had exceeded that of 1938 in the spring of this year and the problem of coal has become less acute. As to agricultural production, it is possible to hope that with a good harvest in 1948 the difficulties of food supplies would tend to disappear as normally France can take care of 90A of its food consumption. Particularly it should be borne in mind that in Frence there is a quantity of hidden resources and stocks which could - 2 - be put to work. In gold and foreign exchange alone it is extimated that these may be valued at a minimum of three billion dollars. On the other hand, the short-term situation las tended to worsen. Wages have continued to chase prices. Although the ordinary budget has been balanced on paper, budgetary expenditures as a whole have remained unbalanced and, until recently, advances by the Bank of France to the State were increasing it an alarming rate. Thus the inflationary spiral, although somewhat slowed down, is still in full swing and, if the measures taken by the Government which so far have been too few and too late, are ineffective, then the assessment of the long-term favorable features becomes meaningless. It is the opinion of most observers that had energetic measures been taken by the Blum Government at the same time as he put into force his price lowering policy, inflation might have been controlled if not halted at that time (February 1947). However, as the situation has continued to worsen with but feeble attempts on the part of the Government to check it, only drastic action can now save the day. It is recognized among govern- ment advisers that stabilization must be the first objective of the Govern- ment's policy. The report of the "Commissariat du Plan" for the first six months of 1947 states that modernization and re-equipment are*useless if all efforts to this end are thwarted by the strains which inflation imposes on the economic situation and unless an effective price stability allows the State and private enterprise to establish plans which are not being continually annulled by incessant variations in the values of money. Ruch more important are the objectives set out in the first memo- ran(lum prepared for the "Comite dlAssainessement Economique et Financiere" (Committee for Economic and Financial Reform) of which the Prime Hinister 1.- 3 - acts as chairman and which I was permitted to read confidentiallyo There it is clearly stated that the final objective is stabilization, i.e., (1) monetary stabilization to give confidence and to bring out hidden reserves, (2) price stabilization at a level acceptable to the workers and middle classes, and (3) exchange stabilization in harmony with the economies of other countries. The report went on to say that the Irstopping of inflation does not mean deflation but an expansion of economic activity to increase French resources. It is not a question of restrictions but of putting onets house in order." These are admirable words and if the immediate plans included in this reiort were adopted at once and energetically enforced, it is per- haps not too optimistic to hope that France might be able to emerge from her short-term difficulties within a year, especially if aided by a good harvest in 1948. These plans for immediate action include a reduction of expenses for the year 1948 both of the ordinary and extraordinary budget so-that in conjunction with the reform of the tax system the total budget will be balanced. It also includes plans for stockpiles of bread, meat and potatoes so that the workers may be protected against exaggerated prices for foodstuffs. However, this re-oort is dated September 19 and so far only a minimu. of action has been taken. These measures, announced by Mr. Ramadier in his speech of 9th October, are on the right lines but disappointed many who had hoped that at last the problem would be attacked vigorously enough to give it a chance of success. They include the elimination of new expen- ditures by the State both for civil and military purposes until the 1948 - 4- budget has been established, unleRs in Cases of urgency. The nationalized industries are reauired to bring down capital expenditures to the level of their own resources and restrictitas are placed on the advance of credit to private enterprise. The question of the moment, therefore, is whether the present Government or any succeeding government will put into action sufficiently early strong enoutgh measures to prevent a run-away inflation. Thus, we are inevitably drawn into a discussion of the political situation, because to my mind, t1e question of how quickly and with what little disturbance France will manage to emerge from her present difficulties depends more on political than on economic factors. To most moderately minded people it seemed that the success of the DeGaulle candidates in the municipal elections might present the center party in the National assembly with an opportunity of bringing about the requisite financial measures. There would be, it was hoped, the necessary pressure from the DeGaulle sympathizers in the National Assembly to compel the Ramadier Government or its successor to take more energetic measures such as those map-oed out in the report of the Committee for Economic and Financial Reform, while at the same time it was ialo hoped that the threat of the DeGalle party taking over power would keep the Communists quiescent. It is top early to say whether this end can be achieved by the new French Government but it is my belief that if the Communists try to stop the economic machine or in the absence of Communist violence matters are allowed to drift from bad to worse, then DeGaulle and his party ill take over power in France. So far DeGaulle has given no signs of having an economic program, but one might hope that a stable government would adopt the economic program of stabilization because there seems to be no alternative. Thus, while there is ground for optimism in the economic sphere if government advisers are permitted to put their plans into effect, the political future is black with uncertainty, I. FINANCIAL SITUATION Budget The ordinary budget has been balanced for tie year 1947 according to the French budget statement but a more accurate analysis would seem to show that both the ordinary and extraordinary budgets are deficitary. This analysis (see Table I) would appear to show that there is a deficit of 75.7 milliard francs in the ordinary budget and a deficit of 276.4 milliard francs in the extraordinary budget while there is probably an operating deficit for the nationalized industries in the neighborhood of 50 milliard francs or a total of 402.1 milliard francs. The method of funding this deficit because of the impossibility of raising internal government loans has been inflationary in the extreme. For example, 80 milliard francs of the deficit is met by simply deferring payments until next year and 117 milliard francs (or 167 milliard francs if the probable deficit of the nationalized industries is added) will have to be met from advances by the Bank of France. It is probable, however, that the deficit will be reduced because-it is now certain that the sales tax, the most important source of revenue, will exceed'the estimates due largely to the rise in priceso It is also felt that direct taxes will yield more than estimated. Consequently. the deficit may be reduced by as much as 40 milliard francs. However, if price increases are aiding revenues this year, they are building up headaches for next year. In citing the necessity for balancing all budgetary expenditures, one of the problems which it is most important to tackle, the Committee for Economic and Financial Reform esti- mated in its first memorandum that even with the cutting out of all subsidies (at the time of my departure only the coal subsidy was still in forece and that was due for early elimination) the total budget for 1948 (ordinary -6- budget, military budget and budget of reconstruction) would show a deficit of 440 milliard france. In addition investments have to be provided for, particularly, those in the now reduced Monnet Plan estimated at 150 milliard.francs. The figures for 1948 given in the first memorandum of the Committee for Economic and Financial Reform are as follows: Milliards of Francs Expenditures Resources Deficit 1. Budget 1. Ordinary civil expendi- tures 425 Reclassification of civil servants. 140 565 2, Military expenditures: Ordinary 230 Extraordinary 0 280 3. Reconstruction and re- equipment expenditures for the ,public service _0 915 650 .265 4. Reparation of war damage 175 -2.5 1090 650 -440 II. Investments in the basic industries: Monnet Plan 150 - -1-5 1240 650 -590 III. Investments in other acti- vities 120 Normal-mesourGeefrom, 0 loans and from self financing.......120 It will be seen, therefore, that the task, made more difficult by negligence, is a heavy one; but if faced squarely and severe enough retrenchment is made immediately, there is a possibility of balancing the 1948 budget. The Committee for Economic and Financial Reform has suggested an approach on,the following lines: -7- (1) For psychological reasons have the whole of the 1948 budget voted for before the Ist of January. (2) Cover with ordinary taxes (a) Ordinary civil expenditures (b) Both ordinary and extraordinary military expenditures, and (c) Expenditures for reconstruction and re-equipment of the public service. The taxes imposed in 1947 will probably bring in 650 milliard francs against the 610 milliard francs budgeted for.' Without increasing any taxes in 1948 but simply by suppressing fraud and by the application of the long-awaited fiscal reform, the Committee for Economic and Financial Reform has stated that it should be possible for taxes to reach a total of 850 milliard francs in 1948 as- suming that the economic rhythm does not deteriorate. Theoretically, as this figure represents about 211% of the national income (3,500 million francs), it might be possible for taxes to yield this amount but it seems rather an ideal tar- get in view of past French financial experience. In any case; the bulk of the deficit must be provided by paring down total budget expenditures. Obvious places in which retrenchment may be made are (a) military expenditures, and (b) the cutting down,of the number of civil ser- vants, whose reclassification in 1968 will demand the enormous sum of 140 milliard francs. More important than the method adopted is the necessity of showing the French people, with as little delay as possible, that the Government means busi- ness, otherwise confidence in the franc cannot be re-established. Currency and Credit Advances by the Bank of France "to make up receipts -_rmally furnished byv taxes 'and by borrowings" were stated in the Schuman memorandum of 16th June to have increased by 109 milliard francs in the preceding year, 60 milliard francs -8- in the preceding three months, and 30 milliard francs in the preceding three weeks. It was this alarming rate of increase whbich gave birth to the Schuman economy law which was designed to put an end to the Treasury deficit which had then reached 126 milliard francs. However, these economies have proved inadequate and by Oct- ober 16th advances by the Bank of France had reached a figure of 135 milliards from a figure of 90.5 milliards on the 16th of June. At the end of this year with the better receipts from taxes, however, a breathing space will be given to the Government and it is hoped that if adequate measures are taken next year, resort to this type of financing will become unnecessary. Note circulation has kept pace with advances to the State and from a total of 799.8 milliards on June 16th it had reached a total of 859.5 milliards on 16th October. I Credit restrictions have been imposed. In a circular dated 10th Oct- ober (see Annex I), the Conseil National du Credit forbade banks to advance credit to their customers except under two conditions: (1) that it was a case of urgency or of indispensable production, and (2) that there was no other way (for example, either by sale of surplus material or by the personal obligations of the proprie- tors) by which the customer could obtain the necessary funds. In the early'part of October the Bank rate was raised from 1 3/4% to 2 1/21. All these are steps in the right direction but useless if the expenditures of the State remain unbal- anced. Present rates of interest reflect the uncertainties of the moment. 4% rentes were selling in October at 70 but even at this price it was an artifically supported market. I am informed that without support the price might be expected- to fall to at least 60. Recent issues of bonds by first-class public 'companies (Annex V), show that such companies cannot borrow for a period of 30 years or so on better terms than 5 to 5 1/2%. -9- External Debt Table II shows the amount of the long and middle-term external debt contracted by the French Government since liberation together with the amounts of the credits drawn to the 31st August 1947, Calculations have been made by the Western European Division showing that the external debt service payments in the years 1950 to 1959 will average the equivalent of 172.6 million U.S. dollars reach- ing a peak of 190 million U.S. dollars in 1952. Except for the external indebted- ness of France prior to liberation which totalled only $146,000,000 and for the sterling credit of 150 million pounds all these debts are owed in U.S. or Canadian dollars. Emphasis is thus placed on the absolute necessity of arresting the recent decline in exports to the dollar area, which it appears unlikely will be greatly in excess of 100,000,000 in 1947. II. IMPORTS AND EXP02TS Imports During August it became necessary on account of the lack of dollars to cut down on practically all imports from the dollar area except wheat, coal, pet- roleum, cotton and fats. The program formerly envisaged for the second six months of 1947 compared with the amount of credit made available up to the time of my last visit (beginning November) is set out in Table III attached. Even with this cutting down of imports the deficit in dollars is continuing to run at a rate of about 70 million dollars a month. Had it not been for the agreement reached with the Export-Import Bank which permitted the use of the remainder of the credits for the purchase of raw materials instead of equipment and also the return of a portion of the gold looted by the Germans, France would have run out of all official dollar resources except for an irreduceable minimum of gold held by the Bank of France, It is now probable that the date has been postponed until December, -10- The latest and very provisional balance of payments estimates for 1947 which were given to me before presentation to his chief by the official of the Hinistry of Finance who prepares them are set out in Table IV(A). It is to be remarked that the figure given for the import of raw materials and foodstuffs from the dollar zone has been cut down from the estimates given to Mr. Hill and myself in July by 50 million dollars while other countries have been raised 40 million dollars to 700 million dollars, the sterling area imports remaining unchahged at 300 million dollars. Thus the total for imports of supplies remains practically unchanged and is within 100 million dollars of the Redbook figures. (See foot of page 11). It is open to question whether the figure of imports from the dollar area for 1947 has been sufficiently reduced even if the time lag between payment figures and customs figures is taken into account. Further, if the figures for 1948 (Table IV(B) ) are examined, we find that the figure for the import of foodstuffs and raw materials in that year is 2,507 million dollars which exceeds the 1onnet Plan (Table IV(C)) figures by about 600 million dollars. Even allow- ing for the rise in prices France seems to be counting strongly on continued dollar aid and has not attempted to show in her estimated figures for imports of supplies in 1947 and 1948 the cuts which have been actually made in the last six months of this year (see Table III). On the other hand* estimates of payments of imports of equipment while showing a sharp cut in 1947 show only a small rise for 1948 of 24 million dollars over the Monnet Plan figures. Expo'rts However, even if it is possible to pare down imports, exports will still be a long way from paying for imports. ',hat has been gained in exports to Europ- ean countries has been lost in exports to the dollar area.' The figures of exports to the dollar area show a rather alarming fall in the last few months where it is -11- to be noted that the total of September is down about L0% from January. It is even worse if we contemplate exports to the United States alone. The latest monthly figures are as follows: Exports to the Dollar Zone in 197 (in millions of francs) Month U.S.A. Other Countries Total January 862 461 1.323 February 484 526 1.070 March 354 579 933 April 679 677 1.356 May 365 761 1.126 June 479 744 1,223 July 341 59 890 August 334 3 769 September 343 399 742 4.2,41 5.191 9.432 = $80, 000,000 In the latest 1947 balance of payments figures (Table IV(A)) the total of exports, 1,190,000,000, remains unchanged but those for the dollar zone have been reduced from $250,000,000 to $150,000,000. It is to be.questioned whether the estimate has been sufficiently reduced. Even if we average the first 9 months' figure ($80,000,000), we fino that for the whole of 1947 exports willamount to only $106,000,000. Therefore, we are far short of the reduced figures of $150,000,00O. This may be due to the time lag in the balance of payment figures as opposed to the customs figures, but it means that the outlook for 1948 is indeed serious in the absence of any readjustment in the value of the franc. Apparently, the sel- lers' market has continued in other areas, and notably in the case of the sterling area the estimated figure of exports has been much increased, A comparison of the various estimates of exports and imports in the 1947 balance of payments is given below: -12- Imports of Supplies Imports of Equipment Exports Ster- Other Ster- Other Ster- Otner ling Dollar coun- ling Dollar coun- ling Dollar coun- zone z tries Total zone zone tries Total zone zone tries Total Red- book 1850 760 1225 Monnet Plan (Loan Contract) 19h0 818 1225 July , Esti- mates 300 990 660 1950 50 475 40 565 240 250 700 1190 Oct- ober Esti- 940 700 1940 50 h75 40 565 300 150 740 1190 mates 300 The latest statement of the various payment agreements is given in Table V(A) and a comparison with the figure$ of one year ago included in the French Report is given in Table V(B). It is sufficient to say that in all cases there has been improvement in the debt position from the French point of view except in the case of the dollar area countries, Argentina and Brazil and in the case of Belgium. Denmark, Italy and the Netherlands are now debtors to France for almost the full amount of the ceiling and though substantial amounts are still owed to Sweden and Switzerland, they are less than they were a year ago. Thus, the picture presented is one of improving trade except with the countries of the dollar area where the situation is progressively worsening due to the overvaluation of the franc. If steps are not taken to devalue the franc as part of a stabilization program, it is possible that the improved trade position with other European countries will not be maintained. III. BALANCE OF PAYMENTS The import and export balance of payment figures for 1947 and.1948 have been examined above. It will be noted from Tables TV(A) and IV(B) that the -13- total deficit of current payments for 1947 is now estimated at $1,590 million (4150 million less than the deficit shown in the Monnet Plan figures given to the Bank) but out of this figure the deficit of the dollar area amqpnts to,$1425 mil- lion. Apart from exports and imports, the principal changes are, on the expendi- ture side, a rise in freights and, on the receipt side, a re-estimate of the fig- ure for tourism, showing only $40 million against the previously estimated $300 million. Altogether the most recent figures for 1947 are not very far out of line with the Monnet Plan and Redbook estimates, but it should be realized that owing to the rise in prices, the amount of material, both supplies and equipment, which France has been able to import is much less than that envisaged by the Monnet Plan. However, the latest estimates for 1948 and 1949 do show a radical change from the previous estimates given to the Bank. The deficit on current operations for 1948 is now estimated at $1,928 million against $924 million (Monnet Plan) and for 1949 $1,28 million against $266 million. In 1948 the billion dollar difference is largely accounted for by items on the expenditure side. There is an increase in these items of some $600 million for imports of raw materials and foodstuffs, some $25 million for equipment, some $220 million for freight, and some $12 million for non-commercial settlements. Thus, the main increase is accounted for by a rise in the amount of dollars required for imports of raw materials and foodstuffs, the main items of which are wheat, coal, petrol, and fats. Due to the damage done to French agriculture by climatic conditions being worse than was anticipated and the fact that French coal production has not come up to expectations, more wheat and coal has been scheduled for import in 1948 than was previously estimated. The most potent reason for the increase is proba- bly to be found in the rise of world prices for commodities, particularly wheat. As regards fre4ghts, line freight rates have tended to remain fairly -14- steady; therefore, the large extra amount of dollars needed for freights shows that the previous French estimates as to the amount which could be carried in French bottoms was certainly on the optimistic side. The 1949 figures are extremely rough estimates but show a similar upward trend. IV. RESOURCES The official resources to meet the large estimated deficits on current operations are almost non-existent. On 31 August the official figures of gold holdings were as follows: (For particulars see Table VI attached,) In millions of U.S. dollars Bank of France 544.2 Exchange Stabilization Fund 18.9 Central Overseas Bank 00, 563.5 Since that date the reserves of the Bank of France have been depleted by the trans- fer of 100 million dollars worth of gold to the exchange stabilization fund. In addition the stabilization fund has received about 100 million dollars worth of looted German gold. It will be seen that with an estimated dollar deficit of 70 million per month the total gold at the disposal of the exchange stabilization fund will again be exhausted by the beginning of December. Holdings of foreign exchange on 31 August totalled the equivalent of ,,346.3 million. The most important item of foreign exchange holdings was an amount of 64,747,000 pounds sterling which shows a great improvement in the sterling position over the last few months when there was actually a large debt position. As for hidden resources, these have been estimated at a minimum of $3,000,000,000 in gold and foreign exchange and are probably much greater# In this figure of $3,000,000,000 there are said, by the Committee for Economic and Financial Reform, to be 0800,000,000 worth of U.S. securities belonging to French nationals, -15, the ownership of which is known to the U.S. Treasury but not to the French auth- orities. However, this,figure of $800,000,000 contains amounts belonging to non- French nationals and the total funds which could be liquidated are much smaller than this figure. In addition, it is thought probable that a large part of the Swiss hold- ings of U.S. securities, estimated by the U.S. Treasury at "1,200,000,000, and some part of the Netherlands' holdings, belong to French nationals. Then there are the dollar bills and gold hoarded by almost every individual in France, which it is impossible to calculate. There must also be considerable hoarding of stocks. V. PRODUCTION AID DIST.IBUTION A, Industrial production. A general index of production must be regarded with great caution but for what it is worth the general index of monthly production since the beginning of 1946 is given below. The base 100 is 1938 production. 1946 T947 Including NotIncluding Including Not Including Reconstruction Reconstruction Reconstruction Reconstruction January 66 60 91 88 February 75 69 96 95 March 78 73 99 96 April 85 79 106 102 May 90 84 106 102 June 90 85 102 97 July 85 80 99 August 73 68 92 September 88 84 95 October 95 90 November 94 20 December 92 89 It will be noted that according to this index, industrial production exceeded 1938 production in April, May and June of this year. The figures for July, August and September which are only ro igh estimates would seem to show the effect of the hol- iday season which was also felt last year, It is probable that the figure for October will rise above 100, -16- Details of the progress made by each industry will be found in the Tonthly Bulletin of Statistics for September (Annex II). Table VII ;ives the monthly figures for two of the most important (coal and electricity) of the six basic activities to which the Monnet Plan is now more or less limited, i.e., coal, electricity, steel, cement, agricultural machinery, and means of transport. The following figures show the percentage attained by these industries in relation to the objectives set by the Monnet Plan: Achievement in Percentage of Basic Objective for 1/ First 6 Fonths Objective Activities Units First 12 1onths at Annual Rate Attained Coal Millions of tons mined 55,5 50,l 90,75% Electricity Billions of kilowatts produced 25,5 25.5 100% Petrol Millions of tons refined ,3 3,6 8 Steel Millions of tons produced 6,2 5,8 94% Cement Millions of tons produced 5 8, 82% Agricultural Thoutsands of Machinery Tractors Fin- ished at Factory 12,3 3,h 28% Transport: Railway Thousands of Tons of Mer- chandise Dis- patched 150 135 90% Piver Thousands of Tons of Mer- chandise Dis- patched 28 18,3 65% I/ The objectives shown are, except for coal mining, those of the reduced targets in the Monnet Plan -17- It may perhaps be said that until the summer of this year a lack of coal presented the main problem to French industrial production and placed as it were a ceiling on production which could not be pierced but the very large imports of coal from the U.S.A. in July, August and September have rendered the problem of coal less acute though coke still remains in very short supply, Imports from the United States are, of course, no permanent solution of the problem and a rather disquieting feature of the situation is the falling off in domestic coal production which reached a peak in the last three months of 1946 and the first three months of 1947. The failure to reach the blonnet target in the first six months of 1947 is explained in the first report on the Monnet Plan as due, more than any other factor, to lower output per man than had been expected. The figures for the next few months would bear watching to see whether this downward trend is accentuated. The figures for the production of electricity present a more encourag- ing picture as the target in the Monnet Plan has been met. Especially gratifying is the greater production of electricity from water power though the drought this summer will have adversely affected the most recent monthly figures. Consumption has, however, grown so rapidly that serious restrictions have had to be imposed on the use of electricity for domestic and industrial purposes. Petroleum production, though less than the Monnet target was reached in the first six months, is increasing from month to month. With nine factories in production as against fifteen before the war the annual rate in January had reached 6 million tons as against 8 million tons in 1939. Depending on the alloca- tion of steel for putting the remaining factories in service, production should soon outstrip the prewar rate and might even attain the target set by the Monnet Plan at the end of the year. Steel production has made a good showing and the reason for not reaching the Monnet target is solely to be attributed to a lack of coal and particularly -18t of coke, Much has been done meahtime to modernize and re-equip the industry. The ftilure of cement to reach its target is put down to two facts: (1) the lack of coal, and (2) the price of cement, which was insufficient for this industry in view of the costs of manufacture. The disappointing figures for the production of tractors is explained in the Monnet Report as due to a lack of investment and of raw materials. Even the lower objectives set by the Monnet Plan were probably too am- bitious and the fact that production is now at prewar levels is encouraging. In 1947, so far, the rhythm of advance has been slower, but useful work has been and is still being done along the lines of re-equipment and modernization of these industries. It does not seem too much to hope that in the absence of industrial unrest production will continue to mount. B. Agricultural production There is no need to emphasize the damage done in December of 1946 and in the first-few months of 1947 by the persistent frosts. 1Ihat is not perhaps realized is that the drought of the summer and the extreme temperatures of July and August were also most deleterious. The figures given in Table VIII show the differences between 1946 production and estimated 1947 production. Total cereals produced were only 77.2 million quintals in 197 as opposed to 124 million quintals in 1946. However, it was to the wheat crop that most of the damage was done. The average wheat crop of the years 1934 to 1938 was 81,5 million quintals. That of 1946 had climbed back to 67,6 million quintals but 1947 was less than half at 31.9 million quintals, On the other hand, some of the estimated 1947 crops, notably potatoes and beet roots, have shown a gratifying increase over 1946, and what is perhaps even more important, meat production has also shown an increase from an estimated 1,6 million tons in 1946 to 1.7 million tons in 1947 though the necessity for killing animals due to the drought will have repercussions next year. However, -19- none of the quantities produced in 1946 or 1947 have reached the size of prewar production. The fi ;ures of animals on the hoof are encouraging though 1947 figures are not available. The round figures in thousands of head are given below: 1946 1938 1945 (estimated) Horses 2.700 2.300 2,500 Cattle 15.600 14.300 14.775 Pigs 7.100 4,400 4.852 Admittedly there are difficulties in the way of further production. There is an insufficiency of the means of production, particularly, fertilizer, tractors and other agricultural machinery. There is also a labor shortage and an insufficiency of feed for cattle due to the falling off of imports of ground nuts and rice. However, given good climatic conditions this winter and next summer there is reason to hope that the problem of agricultural production will become one of the least serious facing the French people. C. Distribution of food supplies. This does not mean that there is any cause for complacency regarding the problem of distribution, which is a short-term problem but one of the most serious facing the Government at present. Proportionately much less of the food supplies produced in France are reaching the town dwellers. Due to lack of con- fidence in the currency, to faulty nthods of collection and price control and to a lack of animal feedstuffs, the farmer is consuming much more of his own produce than in prewar days. Strict control and regimentation are out of the questifn not only because such methods have fallen into disrepute since they were used by the German occupying forces, but the large number of producers (their numbers are estimated to be hot far short of 3,000,000) makes enforcement impracticable. -20- The Committee for Economic and Financial Reform has placed great empha- sis on the solving of this problem of food supplies. In their report it is stated that any policy which has stabilization as its objective will be compromised as soon as begun if the Government does not find a solution for the problem of supply- ing the 20,000,000 inhabitants of the large towns with food by assuring a minimum ration of bread, meat and potatoes at fixed prices. The plan put forward in the report is for the Government to build up stocks of these commodities and intro- duce them into the general supply system when scarcities occur. As far as bread is concerned, it is planned to import for this winter 20 to 22 million quintals of wheat which will be kept for distribution to the towns letting the rural population live on the resources of the countryside. This should give workmen a ration of 200 grams of bread per day. In the case of potatoes a 201 levy on large producers is suggested which it is estimated would bring out 1,000,000 tons of potatoes, thus assuring each worker a total of 50 kilograms of potatoes during this winter or about half the normal supply. The Committee has recommended that stocks of meat should be built up amounting to about 200,000 tons most of which would be found by the Government entering into contracts with the farmers' organizations to give them feedstuffs at reasonable prices for fattening their cattle and pigs in return for meat being put at the disposal of the Government at reasonable prices. The Government has taken advantage of the greater supply of meat (due to the drought which made the slaughtering of cattle necessary) to buy 35,000 tons-of meat, but little or noth- ing seems to have been done about the stocks of potatoes or bread. This appears to be only one more example of the Government taking half measures when only whole- hearted action can count, -21- VI. PRICES AND VAGES The problem of food supplies for the town worker has been made much more acute by reason of the failure of the Government to control prices, particularly agricultural prices. It is somewhat difficult in view of the differences in the price of individual products to make a fair comparison, but the Controller of Prices estimated that, compared with prewarp industrial prices had risen nine times whereas the prices for agricultural products had risen fifteen times. This means that the town worker is spending a disproportionate amount of his income on food, perhaps as high as 80 to 90% which naturally 7ives rise to unrest and a constant pressure for higher wages. Legal wages have been raised from time to time as price, continued their relentless upward trend but the official figures do not permit of a true comparison because the wages actually paid in some industries are as much as double the official wages, and prices on the free market are usually well in ad- vance of official prices. For what they are worth the general index of wholesale and retail prices is given below from which it will be seen that retail prices have apparently tended to increase at an accentuated rhythm since the granting of the loan in May. More detailed figures will be found in Tables IX(A) and IX(B). General Index of irihole- Weighted Index of Retail sale prices prices in Paris Base 100 - 1938 Base 100 - 1938 1945 1946 1947 1965 1946 1967 January 277 479 874 307 481 856 February 286 488 889 316 481 858 March 290 546 860 320 490 838 April 327 558 847 325 491 837 May 366 624 946 354 546 886 June 375 604 90h 393 576 935 July 377 571 882 397 576 965 August 393 698 998 406 730 1.068 September 429 727 1.090. 453 785 1.157 October 447 824 462 858 November 62 806 489 856 December 469 842 495 865 The most recent hourly salaries in industry are as follows: (See also Table IX(C)) Professional Index Worker Index France as 1rance as Provinces Paris a whole Provinces Paris a whole April 19h6 418 321 395 401 303 379 October 1946 556 432 527 528 401 99 April 1947 568 463 543 554 437 528 The most urgent problem, that of prices and wages, which now plagues the French Government is the result of past failure to act against the determining factors, particularly the monetary and financial situation, though it is recognized by the Committee for Economic and Financial Reform that an increase of consumer goods is also an essential factor of stabilization. The expectations of the Monnet Plan with regard to internal savings which envisaged a regime of austerity and con- trol have proved far too ambit ous. The means adopted to finance investments in the first six months of 1947 are shown in Table X. VII, MANP9AER Taking into account the repatriation of prisoners of war and a 48-hour week France's ,need for extra manpower by the end of December 1947 was estimated (in July 1946) to be as follows: Industrial sector Second 6 months 1946 230,000 First 6 months 1947 140,000 Second 6 months 1947 110,000 Replacement of prisoners of war 250 000 730,000 Agricultural sector Replacement of prisoners of war 250 000 Total increase in manpower Actually the increases in manpower up to the end of June 1947 have been as follows: Industrial sector Effective increase second 6 months 1946 200,000 Effective increase first 6 months 1947 160,000 -23- Industrial sector (continued) Replacement of prisoners of war (250,000 to 160,000) 90,000 New workers placed 450,000 Agricultural sector Effective decrease 2nd 6 months 1946 & 1st 6 months 1947 -150,000 Replacement of prisoners of war (250,000 to 200,000) 50,000 Replacement of departed foreign workers 10,000 Replacement of rural exodus 100,000 New workers placed 10,000 It will thus be seen that as far as industry is concerned the number of new workers (450,000) has met the estimated needs for the 12-month period. In agriculture the story is quite different. The exodus of workers from the country to the town which has continued at about prewar levels and the replacement of pris- oners of war has about equalled the number of new -workers found for agriculture and thus manpower for the agricultural sector is just where it was one year ago. The previous estimates of increase in manpower re'-uired for industry in the next six months (allowing for the repatriation of prisoners of war) have been revised and it is now estimated that only 150,000 workers are re uired, that is to say, the replacement of the prisoners of war (160,000) now working in the industrial sector. On the other hand, agricultural needs remain the sameo namely, 250,000, which ip 50,000 more than the number of prisoners of war now employed in the agricultural sector. Measures to be taken to obtain these new workers are var- ious. In the first place, it is hoped that of the prisoners of war, now being repatriated at a rate of 20,000 per month, about 100,000 will accept the offer of the French Government to become free workers. In the second place, efforts are being made to recruit new workers by immigration. An agreement was signed with the Italian Government last November for the immigration of 17,000 Italian workers per month for one year. Results have been disappointing and actually the average number of Italian workers entering France has been only 5,000 per month. Recently a campaign for the recruitment of displaced persons in the French Zone of Germany has been commenced but even if an agreement is later reached with the British and American occupation forces in Ger- many and Austria, the most that is hoped for is 4,000 displaced persons per month. There are also plans to bring in German workers and to stimulate immigration from Algeria, particularly miners. In the third place, the Ministry of Labor is attempting to obtain workers for industry and agriculture from sectors which are not directly productive and from the non-active population. It was estimated in July 1946 that 400oo,0 could be so obtained in the next 18 months, Actually in one year it is estimated that 300,000 persons have been transferred and thus to date expectations have been ex- ceeded, So far manpower has not proved the obstacle to industrial production which it was feared it might. The fact that production has not come up to the expectations of the Monnet Plan has in part accounted for this, but it should also be noted that the 48-hour week which was permitted under a circular of the Prime Minister in January 1947 has never been reached. The average weekly work hours are now 45 but this compares favorably with 39 hours in 1938. Reasons given are the lack of electric power and of coal supplies in the first sLx months of this year. The Monnet Report states that as the fuel situation improves the lack of manpower may very well become the principal obstacle to the development of French production but this state of affairs, if it ever arises, is in the more distant future, except perhaps in the agricultural sector. -25,- TABLE I ORDINARY BUDGET in in Expenditures milliards Revenue milliards of francs of francs Civil Expenditures h3.6 As per Projet de Loi 1503 610.5 1ilitary Expenditures - Ordinary 174 Less Impot de Solidaritg Subsidy to S.N.C.F. metro 6 N4tionale - non recurring capital Current Treasury Charges 20 tax 42.6 643.6 567.9 Deficit of Ordinary Budget 75.7 milliards EXTRAORDINARY BUDGET in in milliards Revenue milliards of francs of francs Budget oj Reconstruction and Impat de Solidarite' Equipment: Nationale 42.6 State Service 67 Special Taxatiop imposed by Private Reconstruction 125 Schuman Law 23 Reconstruction S.N.C.F. 25 Equipment of national- ized industries 70 287 Military Expenditures extraordinary 55 342 65.6 Deficit of Extraordinary Budget 276.4 milliard4 -26- TABLE I (continued) Total Expenditures 985.6 Total Revenue 633.5 Total Budgetary Deficit 352,1 milliards Treasury Financing of Deficit of 352.1 milliards External Financing: - counterpart of exchange operations 110 - sale of American surplus 20 Loans issued from 1st January to 1st August 1947 - less repayments 25. Deferred Payments 80 235 Remaining to be financed either by Loans or by Advances from the Bank of France 117.1 milliards If allowance is made for the possible operating deficit of the nationalized gas, electricity and coal industries, and additional 50 milliards must be added, making a total of 167.1 milliards TABLE II STATEMENT AS OF 31 AUGUST 1947 OF THE LONG-TERM AND MIDDLE-TERM PUBLIC DEBT CONTRACTED SINCE LIBERATION Amount of Amount of Amount of Amount Eemain Credit Credit Reimburse- to be Currency Opened Used ment Made Reimbursed A. LONG-TERM DEBT 1. United States a) Credit to U.S. Government (Agreement of 28 May 1946) $ U.S.A. 720.000.000 720.000.000 - 720.000.000 b) First credit to the Export- Import Bank (4 Dec. 1945) $ U.S.A. 550000.000 550.000.000 23.097.500 526.902.500 c) Second credit to the Export- Import Bank (16 July 1946) $ U.S.A. 650.000.000 452.000.000 - 452.000.000 d) Credit for Liberty Ships (9 December 1946) $ U.S.A. 40,084.839 40.984.839 - 40.084.839 2. Canada Credit of the Canadian Government (9 April 1946) $ Canadian 242.500.000 174.800.000 - 174.800.000 3. Loan of the Interna- tional Bank for Recon- struction & Develop- ment (9 May 1947) $ U.S.A. 250-000.000 174,431.938 - 174.431.938 B. MIDDLE-TERM DEBT 1. Great Britain Credit of the Government of Great Britain (27 March 1945 and subsequent agree- ments) i St. 150.000.000 150.o00.o0o 50.811.250 99.188.750 -28- TABLE III PROGRAM OF IYPORTS FOR THE SECOND HALF OF 1947 Dollar Zone (millions of dollars) Program prepared for the second ._ half of 1947 prior to Credits Credits remaining Prodcts August unblocked to-be unblocked W\heat and bread cereals 125,000 70,000) 11,300) 30,320 13,380) Secondary cereals 27,000 3,500 10,000 Coal 72,000 67,000 German coal 20,000 20,000 Fats 30,000 11,300 3,700 Steel 31,800 8,000 Sulphur 1,800 0,400 Nitrogen fertilizer 7,500 1,950 Cotton 26,600 11,860 Petrol G.A.C. 21,470 8,365 Refined petrol 33,830 23,646 German timber 12,000 12,000 Carbon black 0,540 1,000 Electrodes 0,600 0,150 French N. Africa and colonies 100,000 60,000 Other products 107,360 - - Total 617,500 323.851 4b,020 -29- TABLE IV(A) PROVISIONAL BALANCE OF PAYMEINTS FOR 1947 (This estimate is dated 27th October 1947 and was given.to me before presentation to the Chief of External Relations of the Ministry of Finance, and must therefore be regarded as very provisional and very confidential). (in millions of dollars) Sterling Dollar Other Zone Zone Countries Total I. CURRENT PAYVENTS A. Receipts 1. Exports 300 150 740 1.190 2. Freight and additional expenses 20 15 5 hO 3. Tourism 20 15 5 ho 4. Interests and dividends 35 5 10 50 5. Expenditures of Allied Troops - 130 - 130 6. Miscellaneous expenses 50 20 30 100 TOTAL 425 335 790 1.550 B. Expenditures 1. Imports of Supplies 300 940 700 1.940 2. Imports of Equipment 50 475 0 565 3. Freight and additional expenses 40 240 30 310 4, Service of the External Debt 1 35 4 40 5. Administrative expenses 12 30 18 60 6. Patents and licenses 1 3 1 5 7. Foreign workers - - 100 100 8. 1iscellaneous expenses 36 42 42 120 TOTAL: 440 1.765 935 3.140 C, Deficit 15 1.430 145 1.590 -30- TABLE IV(A) continued II. Capital Operations Sterling Dollar Other Zone Zone Countries Total A. Expenditures. 1. Deficit of current payments 15 1.430 '145 1.590 2. Non-commercial settlements a) Contribution of Monetary 'Fund - 90 - 90 b) Reimbursement of French foreign loans: First credit of Eximbank - 18 - 18 Debt prior to 1939 1 - 5 6 c) French investment abroad 3 1 2 6 d) Miscellaneous expenses 6 6 8 20 TOTAL 25 1.545 160 1.730 B. Receipts 1. Withdrawals from reserves a) Public obligations in gold 95 210 50 365 b) Private obligations 125 110 100 335 2. Restitution of gold by EnenW Countries - 90 - 90 3. External loans a) Second credit of Ex- imbank - 500 - 500 b) Credit of Liberty ships and obligations - 50 - 50 c) Canadian credit - 75 - 75 d) Credit of International Bank - 250 - 250 e) Other credits - 125 30 155 4. Private credits ho 5 5 So 5. Foreign investments in France - 8 2 10 6. MTfl Tllaneous receipts 5 2 3 10 TOTAL 265 1.425 190 .1.880 C. Deficit ' . 120 D. Surplus 240 30 150 -31- TABLE IV(B) PROVISIONAL CURRENT BALANCE OF PAYMENTS Between the Franc Zone and Foreign Countries (in millions of dollars) 1988 1949 1950 1951 I. EXPENDIT7RES a) Metropolitan France Imports - Supplies 2.235 2.165 2,100 2.076 Imports - Equipment 550 380 215 115 b) French North Africa Imports - Supplies 92 36 43 43 Imports - Equipment 24 50' 30 10 c) Colonies Imports - Supplies 180 150 150 150 Imports - Equipment' 60 70 45 15 Freight -297 290 216 185 Interests and dividends 105 119 130 129 Debt amortization 32 32 65 65 Trqnsfer of salaries 125 150 150 150 Tourism 25 25 25 25 Other current payments 114 105 105 105 TOTAL 3.819 3.592 3.274 3.068 II. RECEIPTS Exports from Metropolitan France 1.361 1.500 1.950 2.250 1 " French North Africa 130 152 165 175 to Colonies 70 92 100 135 Freight 40 40 50 50 Interests and dividends 40 30 30 30 Transfer of salaries 10 10 10 10 Tourism 150 250 300 350 Other receipts 90 90 90 80 1.891 2.164 2.695 3,080 DEFICIT OF CURRENT PAYMENTS -1.928 -1.428 - 579 / 12 -32- ESTATED BALjANCE OF PAYMENTS BETWEEN THE FRANC AREA AND ALL FOREIGN COUNTIES 1946 - 1949 (In. millions of dollars) Submitted to Bank May 9, 1947 by Credit National 1/ 1946 1947 198 1949 I, BALANCE OF CURRENT OPERATIONS A. EXPENDITURES 1. Imports of Supplies ( 1,940 1,900 1,950 2, Imports of Equipment (2,25 818 590 300 3. Freights 300 200 75 60. 4. Non-commercial Settlerents 313 373 274 286 TOTAL 2,838 3,331 2,839 2,596 B. RECtIPTS 5.# Exports 550 1,225 1,600 2,000 6. Tourism 20 120 275 300 7. Non-Commercial Settlements 294 240 40 30 TOTAL 86h 1,585 1,915 2,330 C. DEFICIT ON CUIRENT OPERATIONS 1,974 1,746 92, 266 IIh CAPITAL SETTLIEENTS A. EXPENDITRES 8. Deficit on Current Operations *1,97 1,746 924 266 9. Capital Expenditures 258.5 147 33 37 TOTAL 2,232.5 1,893 957 303 B6 RECEIPTS 10. Public and Private Assets 1,030 505 405 105 11, Loans Already Granted 1,090.h 648 12h - 12. Tiscellaneous 112.1 200 - - TOTAL 2,232.5 1,353 5219 105 C. NECESSARY NE, RESOURCES - 540 428 198 If Provisional Results, -33- TAELE V(A) STATUS OF PAYMNT ACREE.ENTS on September 4, 1947 CEILING CREDIT BALANCES Foreign Bank Foreign Bank Fixed by the Banks of Banks of COUNTRY Agreement of Issue France of Issue France (In millions of French Francs) (in millions of $) Argentina 21.284 13.813 - 115,9 Austria 120 - 69 - 0,6 Belgium 4.076,2 4.438 - 37,3 - Brazil 2.972 2.965 - 24,9 - Denmark 865,7 - 779 - 6,5 Finland 180 197 - 1,6 - Greece 120 1 - - Hungary no ceiling 16 - 0,1 Iceland no ceiling 177 - 1,5 Italy 800 - 764 - 6,4 Norway 600 238 - 2,- - Netherlands 1.800 - 1.754 - 14,7 Poland 834 - 64 0,5 Sweden 1.988,4 1.354 - 11,.4 Switzerland 8.290,5 6.609 - 55,5 Czechoslovakia 595,5 83 - 0,7 Turkey 500 341 - 2,9 Uruguay 470 423 - 3,5 Yugoslavia 11),3 36 - 0,3 - Bulgaria no ceiling - 49 - 0,4 Total 257,6 29,1 Net Credit -228,5 TABLE V(B) COMPARISON OF STATUS OF FRENCH PAYMENT AGREETENTS 1946 AND 1947 Net amounts in millions of dollars September 30, 196 September T, 1947 Country Debits Credits Debits Credits Argentine 95 - 115,9 - Austria - 0,6 Belgium 12,8 - 37,3 - Brazil 1,9 - 24,9 - Denmark !6,2 - - 6o5 Finland 0,5 - 1,6 - Greece - Hungary - 0,1 - Ireland - - 1, - Italy 2,9 - 6,A Norway- 7,4 - 2,0 - Netherlands 8,1 - Poland - 0,5 Sweden 14,l - 11, - Switzerland 61,8 -5,5 - Czechoslovakia - 2,0 0,7 - Turkey - 2,9 - Uruguay - - 3, - Yugoslavia - 0,3 - Bulgaria - - 04 Total 155,1 10,1 257,6 29,1 Total debit balance 145,O 228,5 -35- TABIE VI STATE!ENT OF PUBLIC HOLDINGS OF GOLD ATD FOREIGN EXCHANGE on August 31, 1947 I. GOLD Value weight in In Iillions In Villions of Kilograms of Francs - dollars U.S. Bank of France 483.605 64.817 5,2 Exchange Stabilization Fund 16.761,1 2.246 18,9 Central Overseas Bank 359,9 48 0,h Total 500.726,- 67.111 563,5 II. FOREIGN EXCHANGE Countervalue Amount in In 1illions of In 1illions of Thousands French Francs Dollars U.S. Foreign a) Exchange convertible into gold U.s. Dollars 73.029,- 9.293,3 78 Escudos 43,347,- 207,3 1,7 Swiss Francs 16.042,- L43,3 3,7 Swedish Crowns 2,0 " b) Foreign exchange not convertible into gold Pounds sterling 6b.747,- 31.078,6 260,9 Canadian dollars 1.826,- 217,3 1,8 Argentine pesos 772,- 24,2 0,2 Total 41.2614,- 346,3 III, SUMMAIRY Amount In Pillions of InFillions of Francs Dollars U.S. Gold 67.111,- 563,5 41.264,- 3.6,3 Total 108.375,- 909,8 1/ The countervalue in dollars is calculated at the buying'price of gold 6f the Federal Reserve Bank (35 dollars per 1'ounce of fine gold.) - the counter- value in francs is calculated at the buying price of gold of the Bank of France (134,027,90 francs per kilogram of fine gold). -36- TABLE VII COAL PRODUCTION (in millions of metric tons) 1914 1945 1946 1947 January 3.428 2.733 3.066 4.597,5 February 3.343 2.499 3,799,9 4.262,9 March 3.613 2.628 4.207,8 4.623,6 April 3.149 2.291 4.036,A 4.208,7 May 2.080 2.140 4.134,5 3.983 June 1.616 2.682 3.831,- 3.391,1 July 1.369 2.704 4.110 3.952,A August 1.029 3.069 4.136 3.718,0 September 1.065 3.102 4.052 October 1,437 3.752 4.682 November 2.043 3.648,6 4.182 December 2.,29 3.542,3 4.171 PRODUCTION OF ELECTRICITY (in millions of kilowats) 1944 1945 1946 1947 January 1.526 1,523 1.821 2.207 February 1.478 1.346 1.664 2.038 March 1.459 1.485 1.829 2.221 April 1.334 1.310 1,712 2.112 May 1.168 1.321 1.820 2.113 June 929 1.333 1.817 2.016 July 789 1.327 1.781 2.012 August 603 1.288 1.671 September 631 1.379 1.839 October 991 1.584 2.047 November 1.237 1.641 2.011 December 1.464 1.629 -37- TABLE VIII AGRICULTURAL PRODUCTION IN 1946 AND 1947 1946 1947 (Definite) (Estimate) Cereals Quintals Wheat 67,489,755 31,91h,101 Rye ,624,216 3,741,943 Meslin 438,037 248,890 Barley 10,625,645 11,109,315 Oats 37,704,719 27, 703,442 Buckwheat 704,009 765,372 Maize 2,112,050 1,735,145 Total Cereals l2379,787TI 7721,208 Potatoes: early 4,856,300 4,100,000 ordinary 93,960,535 109,793,300 Total Potatoes 95,716,b35 113,d93,3 Vegetables Kidney Beans 735,762 717,700 Lentils 89,299 113,263 Peas 521,228 538,330 Beans 129,302 109,293 Horse-beans 217,859 240,173 Total Vegetables 1,693,450 1)71bp759 Sugar Beet Industry 66,262,893 69,800,510 Oil Bearing Plants Colza 871,465 291,616 Rape 17,895 73,445 Poppy 50,518 40;322 Others 268,759 383,988 Total Oil Bearing Plants 1,208,637 789,369 Fruits Grapes 1,546,495 1,517,000 Aiples 2,852,850 2,760,100 Pears 1,344,440 1,360,980 Peaches 1,020,602 1,123,000 Apricots 217,913 337,640 Cherries 678,1445 777,700 Plums 1,030,835 1,064,200 Dried Plums 68,610 88,100 Nuts 193,970 316,249 Chestnuts 856,330 871,155 Apples and Pears for Cider 17,988,500 13,709,650 Wine (hectolitres) 36,159,582 40,104,073 -38- No. 176/Doc. TABLE IX (Part A.) GENERAL INDEX OF 7'HOLESALE PRICES (General Statistics of France based on 1938 = 100) Annual Averages 1939 : 1940 : 1941 : 1942 : 1943 : 1944 ; T9199:1976 umber of Articles 7 Cereals : 96 : 106 : 133 : 180 : 210 : 226: 265 : -20 5 Meats and lard : 108 : 113 : 177 : 184 : 227 : 279 : 456 :1,0)o0 .4 Eggs and Dairy Products : 99 : 128 : 166 : 206 : 26 : 293 : 132 : 762 ? Miscellaneous : 101 : 135 : 172 : 209 : 261 : 324 390 : 657 23 Food Products : 101 : 127 : 160 : 194 : 237 : 277 : 373 : 689 5 Combustibles : 114 : 137 : 179 : 227 : 260 : 264 342 : 646 12 Metallurgic Industry : 118 : 149 : 173 : 176 : 178 : 200 ; 308 : 502 5 Textile Industries : 103 : 183 : 208 : 221 : 248 : 261 : 357 : 676 3 Leather Industry : 109 : 111 : 111 : 149 : 167 : 177 : 241 : 286 14 Chemical Industry : 111 : 151 : 179 : 219 : 297 : 336 432 : 699 1 Rubber Industry : 129 : 177 : 381 : 499 : 499 : 499 : 499 : 570 2 Paper Industry : 94 : 255 : 325 : 325 : 371 : 421 : 610 : 768 2 Wood Industry : 97 122 : 149 : 178 : 216 : 273 : 351 : 481 6 Building Industry : 108 : 125 : 135 : 158 : 172 : 204 : 374 : 511 50 Raw Material : 111 : 151 : 182 : 210 : 236 : 256 : 354 : 602 Industries 4 Combustibles : 111 : 126 130 : 146 : 179 : 189 : 332 : 603 8 Metallurgic Industry : 121 : 153 : 185 : 188 : 191 : 220 : 372 : 553 1 Textile Industry : 109 : 183 : 222 ; 258 : 288 : 296 : 40 : 790 9 Leather Tndustry 107 : 128 134 ; 150 : 168 : 216 : 375 : 511 1 Chemical Industry 1: 108 : 122 : 130 : 138 : 151 : 176 : 278 : 380 3 Rubber Industry : 108 : 119 : 180 : 257 : 266 : 266 : 268 : 268 6 Paper Industry : 108 : 190 : 258 : 260 : 265 : 305 : 529 : 638 5 Wood Industry : 103 : 138 ; 17h : 226 : 242 : 300 : 168 : 640 5 Building Industry : 102 : 112 ; 118 : 135 : 171 : 179 : 357 : 469 2 Partly or Unfinished Products Industries : 109 : 152 : 184 193 : 225 : 250 : 400 : 610 3 INDEX OF FOOD PRODUCTS : 101 : 127 : 160 : 194 : 237 : 277 : 373 : 689 2 INDEX OF INDUSTRIAL PRODUCTS : 110 : 151 : 183 : 209 : 231 ; 253 : 377 : 606 3 GENERAL INDEX OF WHOLESALE PRICES c 1.05 : 139 : 171 : 201 : 234 : 265 : 375 : 648 -39- 1946 1947 July :Aug. :Sept.: Oct.: Nov.: Dec,: :Jan. : Feb.:Mar. : Apr.: May :June : July 322 : 573 : 573 : 564 : 564 : 569 : :559 : 559 :,550 : 550 : 550 : 550 : 550 856 :1321 :1383 :1362 :1179 :1368 : :1306 :1424 :1383 :1258 :1461 :1597 :1577 661 : 883 : 900 :1049 :1049 :1049 : :1012 :1093 : 937 : 961 :938 : 997 :1020 496 : 550 : 571 : 857 : 902 : 994 : :1231 :1180 :1121 :J.114 :1694 :1208 : 973 554 : 797 : 820 : 915 : 885 ; 954 : : 992 :1021 : 965 : 938 :1132 :1047 ; 985 674 : 674 : 750 : 747 : 744 : 744 : : 848 : 848 : 807 : 807 :807 :-807 :831 46 : 507 : 589 : 602 : 618 : 618 : : 608 : 608 : 718 : 731': 762 : 762 :762 676 : 676 : 676 : 835 : 835 : 835 : : 826 : 826 : 823 : 823 :823 : 823 :823 286 : 286 : 286 : 286 : 286 : 286 : : 5U : 544 : 515 : 515; 515 : 515: 515 558 : 562 : 701 :1148 :1148 :1148 : :1109 :1109 :1075 :1075 :1075 :1086 :1089 562 : 562 : 562 : 635 : 635 : 635 : : 635 : 635 : 635 : 635 : 635 : 635 : 569 702 : 702 : 702 :1007 :1007 :1007 : :1007 :1007 : 947 : 947 : 9b7 : 947 : 947 442 : 42 : 442 : 6681: 668 : 668 : : 634 : 634 : 601 : 601 : 601 : .601 : 601 484 : 507 : 507 : 582 : 582 ; 57h : : 603 : 610: 577 : 577 : 577 : 577 : 638 589 : 600 : 647 : 734 : 736 : 735 : : 770 : 771 : 768 : 771 : 776 : 776 : 791 789 : 789 : 782 : 789 : 808 ; 808 : : 954 : 957 : 907 : 907 : 907 : 907 : 907 500 : 536 : 634 : 670 : 670 : 670 : : 664 : 664 : 794 : 794 : 794 : 815 : 815 773 : 773 : 773 : 968 : 968 :100 : : 977 : 977 : 957 : 957 : 957 ; 957 : 957 793 : h93 : 493 : 564: 56 : 564 : : 535 : 535 : "0 : 507 : 507 : 507 : 507 391 : 391 : 410 : 423 : 426 : 426 : 407 : L07: 389 : 389 : 398 : 398 : 391 268 : 268 : 268 : 268 : 268 : 268: :)491 : 491 : 488 : 488 : 488 : 488 : 488 593 : 593 : 593 : 775 : 775 : 775: :736 : 736 : 698 : 698 : 698 : 698 : 698 55h : 611 : 611 : 860 : 860 : 860: :817 : 817 : 774 : 774 : 774 : 774 : 774 h67 : 475 : 475 : 485 :485 : 485: :460 : L60 : 453 : 453 : 453 : 453 : 710 587 : 601 : 621 : 732 :734 : 743: :743 : 73 : 742 : 2 : 743 : 747 : 763 554 : 797 : 820 : 915 ; 885 : 954 : : 978 ;1.007: 965 : 938 :1.132:1.047: 984 558 : 6oo : 634 : 733 :735 : 739: :756 :756 : 755 : 757 : 759 : 762 : 777 571 : 698 : 727 : 824 :810 :86: : 867: 82 ; 860: 847 : 96 : 904 : 881 -ho- TABLE IX. (Part B.) No. 176/Doc. IIDEX OF EETAIL PRICES OF PARIS (General Statistics of France based on 1938 = 100) 29 Articles 4 Articles 34 Articles (Food) (fuel - light) 29 4 4 4 soap 1938 100 100 100 1939 108 109 108 1940 129 123 129 1941 149 128 150 1942 174 147 175 1943 224 168 224 1944 275 175 285 1945 377 290 393 1946 645 465 645 July 1946 576 471 576 August 743 471 730 September 800 503 785 October 866 506 858 November 851 536 856 December 861 540 865 January 1947. 847 612 856 February 851 612 858 March 833 592 838 April 830 591 837 May 883 591 886 June 941 591 935 July 974 593 965 -41- INDAX OF RETAIL PRICES (General Statistics of France) 34 a:ticles 29 Food Products: Bread Flour Dough foods Rice Potatoes Beans Lontils Dzy Peas Beaf (boiling) (roast) Vea. (breast) (loin) K-tton (breast) - (leg) P-rk (back) (fat bacon) lard B : tter Ci Sugar Coffee Chicory Clocolate Salt Wine 4 articles of fuel and light Coal Petrol Gas Electricity Scap -42- TABLE IX (C) IIDICES OF HOTJY WAGES Base 100 - October 1938 Workmen Professionals France as France as Paris Provincial a whole Paris Provincial a whole October 1939 102.9 102.7 102.8 104.8 102.3 102.9 October 1940 100.- 104.3 103.3 103.2 104.7 104.- October 1941 107-i- 122..- 120.6 113 117,- 11608 April 1942 117.- 132.5 128,2 ll.6 125.8 123-1 October 1942 118- 139-1 133,6 114.7 134.7 130.1 A ril 1943 120,-' 143.- 136.9 115-8 139.4 132.9 October 1943 138.4 151.2 148.8 123.9 148.1 141.6 April 1944 142,9 167.8 162.8 156.2 165.2 163. October 1944 217,4 255.8 247.6 205n5 239,4 231.2 April 1945 264.2 315.5 304.3 276-5 326.5 334.4 October 1945 285.6 393.-- 369.5 303, 404 - 3SCI April 1946 303.- 401.- 379.- 320,7 418.- 395.- October 1946 401.- 528,- 499,- 431e- 556- 526..- April 1947 437.- 554.- 528.- 463.- 568,- 543-- TABLE X amUSED TO COVER THE NEED FOR FINANCING IN THE FIRS SIX MLNgTEI OF l? -- - Means Needs Finan- Deficit State cial of the Oper- Hidden Taxes markets Self balance Bank ating Invest- Floating invest- and re- and finan- cf pay- of charges ments capital ments Total ceIpts banks cing ments France State 329 107 - - 436 260 35 - 52 89 Nationalized companies - 35 2 - 37 - 35 2 - - Municipalities - 8 - - 8 - 8 - - - Private companies - 35 28 20? 83 - 44 38 - 1 329 185 30 20? 564 260 122 40 52 90