Pay As You Go?

During World War I French finance ministers spent billions of their country's money as the generals spent lives--on a do or die principle. They made no attempt to balance their budgets and instead of figuring expenses on a yearly basis they asked for appropriations monthly.

Last week French Finance Minister Paul Reynaud presented his first wartime budget. It was for a year and it was balanced all right, but the joker in it was that it covered only civil and not military costs. These were huge enough--79,000,000,000 francs ($1,746,000,000), or an increase of $500,000,000 over last year's ordinary expenses. A few items which might possibly be called military costs were included: $309,400,000 for the relief of families of mobilized men, $55,250,000 for refugees from the war zones, $143,650,000 for interest payments on money yet to be borrowed.

Although M. Reynaud is known to believe in a "pay-as-you-go" policy as far as possible in this war, the real story of French war finances was not to be revealed until the Finance Minister presents the military budget, which will be drawn up every three months. Meanwhile, to defray the increased costs, both civilian and military, taxes went up. The so-called extraordinary income tax was raised from 2% to 5% on low incomes and to 15% on incomes above $155 monthly earned by male noncombatants of military age. Other new taxes included the upping of postal rates, increased levies on telephones and radios, cigars and cigarets.

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