France’s Resistance to the Great Depression
Unlike other leading industrial economic during 1920s, France resisted the onset of the Great Depression until 1931. By the beginning of 1927, France had avoided the road to total monetary disaster and national bankruptcy that other Continental countries were experiencing. Into 1930, France remained immune to the effect of the Great Depression; when most of the industrial world was bogging down, most of the parts of French industry was still operating at 1929 heights. Even in 1931, the downturn remained moderate compared other economies. While financial hysteria and extensive bankruptcy made money scarce elsewhere, capital poured into France to produce a unique situation of monetary plenty. The …show more content…
In its crucial years from 1928-1931, France was able to resist the onset of the Great Depression. The rapid expenditure helped to maintain French domestic prosperity into 1930, but turned the balance of payment around. By 1932, unfortunately, France herself was in the clench of depression that seemed to grow enduringly worse while other countries began to recover. As France finally succumbed to depression, the severe downturn finally swept away the foundations of the new Poincare franc just as undoubtedly as the First World War had proved catastrophic to its Germinal predecessor. Although total tax receipts were still high compared to previous years, total expenditures were even higher, partially because of supplementary credits voted during the year for disaster relief and national defense. After the fiscal year 1931-1932 showed a deficit of almost six billion francs, both direct and indirect taxes fell below expectations by as much as twenty-five percent. In July, 1931, the French fiscal outlook was further weakened after the ratification of "Hoover Moratorium," which called for one-year suspension of all international war debts and reparation in view of the world depression, as France missed more than three billion franc in anticipated receipts. Furthermore, the "Gentlemen 's Agreement," supported by the United States, not only settled German reparations but also cancelled the remaining political World War I debts, as far as the signatories were concerned. By 1933, every phase of French economic and financial life was struck with the depression. Overall, after attaining the heights of prosperity in 1928-1929, the French economy showed a stubborn reluctance to follow the rest of the world down toward depression; this lag was followed, however, by a severe depression in France which
Unlike other leading industrial economic during 1920s, France resisted the onset of the Great Depression until 1931. By the beginning of 1927, France had avoided the road to total monetary disaster and national bankruptcy that other Continental countries were experiencing. Into 1930, France remained immune to the effect of the Great Depression; when most of the industrial world was bogging down, most of the parts of French industry was still operating at 1929 heights. Even in 1931, the downturn remained moderate compared other economies. While financial hysteria and extensive bankruptcy made money scarce elsewhere, capital poured into France to produce a unique situation of monetary plenty. The …show more content…
In its crucial years from 1928-1931, France was able to resist the onset of the Great Depression. The rapid expenditure helped to maintain French domestic prosperity into 1930, but turned the balance of payment around. By 1932, unfortunately, France herself was in the clench of depression that seemed to grow enduringly worse while other countries began to recover. As France finally succumbed to depression, the severe downturn finally swept away the foundations of the new Poincare franc just as undoubtedly as the First World War had proved catastrophic to its Germinal predecessor. Although total tax receipts were still high compared to previous years, total expenditures were even higher, partially because of supplementary credits voted during the year for disaster relief and national defense. After the fiscal year 1931-1932 showed a deficit of almost six billion francs, both direct and indirect taxes fell below expectations by as much as twenty-five percent. In July, 1931, the French fiscal outlook was further weakened after the ratification of "Hoover Moratorium," which called for one-year suspension of all international war debts and reparation in view of the world depression, as France missed more than three billion franc in anticipated receipts. Furthermore, the "Gentlemen 's Agreement," supported by the United States, not only settled German reparations but also cancelled the remaining political World War I debts, as far as the signatories were concerned. By 1933, every phase of French economic and financial life was struck with the depression. Overall, after attaining the heights of prosperity in 1928-1929, the French economy showed a stubborn reluctance to follow the rest of the world down toward depression; this lag was followed, however, by a severe depression in France which