Franc Up

The franc teetered sickeningly last week, plunged from 31 1/2% to the dollar to 35 1/3, steadied, gathered strength, skyrocketed to 30 3/4%. Though explanations were many, two facts stood out sharply. Just before the franc's toboggan, Finance Minister Peret was obliged to announce that pourparlers for definitely funding the Franco-British debt had broken down between himself and Chancellor Winston Churchill of the British Exchequer at London. Conversely, the franc rose as soon as the French Cabinet and the Bank of France announced, after M. Peret's return to Paris from London, that the French Government would, if necessary, employ the $100,000,000 Morgan loan, floated in 1924 (TIME, March 24, 1924), to "peg" the franc at something like its value in the immediate past--roughly between 25 and 20.

The Morgan loan has been repeatedly declared "untouched" by the French Government. Naturally its use last week--if it was used--was carefully concealed lest speculators gain an inkling of the extent to which the Government is prepared to embark upon salvage operations.