1939: France

The beginning of 1939 seemed to mark an important turning point in the history of post-war France. All observers agreed that in every field the outlook was rather bright. The complete failure of the general strike at the end of November 1938 seemed to have settled the labor troubles for a long time to come. Parliament had just passed the budget in record time and Finance Minister Reynaud was able to quote impressive figures showing that the financial and economic situation was steadily improving. In the field of foreign affairs, France had just signed a joint declaration of peace with Germany (Dec. 6, 1938) which was meant to settle the question of the eastern frontier. Public opinion, which had been divided in the past over almost every foreign issue, at the time of the conquest of Ethiopia or during the Spanish civil war, was now solidly behind Premier Daladier's firm refusal to grant Italy any territorial concessions either in France or in Africa. Daladier left for a triumphal visit to Corsica, Tunisia and Algeria on Jan. 2. On his return, the Chamber of Deputies held an important debate on the Government's foreign policy; the Premier's categorical declaration, 'France will not yield a single acre or a single right,' was wildly and unanimously applauded by the Deputies. By the end of January the war in Spain was all but ended, removing an annoying thorn in the side of the Government.

Everybody realized, however, that many difficulties still lay ahead, for in spite of the Munich 'peace' and the recent agreement with Germany, military preparations and armament production were being steadily stepped up; impressive quantities of airplanes were purchased in the United States. The victory of General Franco in Spain with the help of his German and Italian allies was likely to make the position of France more difficult should a European conflict arise. In an effort to assuage the Spanish dictator, Foreign Minister Bonnet promptly sent Senator Léon Bérard to establish relations with Spain and prepare the ground for early recognition of the new régime. Meanwhile, far away in the Pacific, Japan taking advantage of European troubles, drew dangerously close to French Asiatic possessions in Indo-China by occupying the island of Hainan in spite of French protests, and later the Spratly Islands farther to the south.

INTERNAL AFFAIRS

Parliamentary Affairs.

In Parliament, the Daladier Cabinet was supported by a small majority of a hundred-odd votes made up of the Premier's own Radical-Socialist party and deputies from the Center and the Right. The Popular Front was definitely broken, and the Socialists and Communists voted consistently against the Government, except occasionally on some question of foreign policy. The Cabinet's program, however, which M. Daladier said was 'to insure peace and the integrity of French and colonial territory, defend the franc and restore the financial balance,' could not raise much opposition. Unfortunately, in view of the international situation, the outlays for national defense kept increasing, while unforeseen new items of expense would crop up as, for instance, the harboring and caring for half-a-million Spanish Loyalist refugees who had fled to France after the débàcle in Catalonia, early in February.

That same month two lively debates took place in the Chamber of Deputies. The first one was on the question of granting amnesty to the strikers of November 1938. The Socialist and Communist opposition urged total and unconditional amnesty while the Government wished to keep its freedom of action and the right to refuse amnesty to some of the more violent labor leaders. The Minister of Justice obtained a favorable majority of 348 votes against 244 (Feb. 7). The other debate dealt with the question of giving 'de jure' recognition to the Franco Government in Spain. Daladier told the Deputies that he intended to ask the Council of Ministers to recognize the new régime immediately. When the question came to a vote, the Premier was upheld by a majority of 62; soon after, the appointment of Marshall Pétain as ambassador to Burgos was announced.

The first days of April were marked by momentous decisions taken in common by Great Britain and France. Both governments made known their intention to help 'by all means' Poland or any other state threatened by Germany. England, for the first time in her history, was assuming grave and precise obligations in Eastern Europe, an attitude France had for a long time hoped to see her ally take. It became apparent to all observers that, by thus declaring that they would brook no further expansion of Germany at the expense of others, France and Great Britain accepted the idea of a possible war in Europe in the near future, and with the war clouds gathering thick on the horizon, France continued to gird herself for the impending conflict.

Financial Matters.

On April 21, Finance Minister Paul Reynaud explained in a nation-wide broadcast the reasons for new financial measures, many of which were necessitated by the European state of alarm. The budget for 1939 voted at the end of December 1938 amounted, he said, to 65,500,000,000 francs, as compared to 55,000,000,000 the year before. Normal receipts were expected to take care of this, the 'ordinary' budget. But there existed in addition an 'extraordinary' budget amounting to 28,000,000,000 francs of which about 26,000,000,000 were earmarked for national defense. Altogether, with various Treasury needs, there remained a total deficit estimated at 35,000,000,000 to cover which money must be borrowed. The very favorable situation obtaining at the beginning of the year had led him to believe that borrowing would not prove difficult, but the recent events in Central Europe necessitated additional expenditures for armaments which he estimated at 15,000,000,000 francs. M. Reynaud did not think that this new outlay should be covered by new loans or by resorting to inflation. He had therefore decided on other fiscal measures.

The most important was a new 1 per cent tax, called armament tax, a sales tax to be levied on practically every commercial transaction after May 1. Measures would be taken for a better control over 'fiscal fraud' by computing the income-tax rate in doubtful cases on the basis of 'outward signs of wealth.' Another decree in addition to the normal taxation established a graduated tax on the profits of armaments.

There were other measures intended to discourage the exodus of peasants from the country to cities, and the succession tax on rural property was eased considerably. In order to effect economies, a special committee known as the 'axe committee' was created which would cut all expenses not absolutely necessary. Subsidies to alcohol producers and wheat growers would be discontinued, credits for public works reduced by 500,000,000 francs. The new measures, it was hoped, would take care of the fresh outlay of 15,000,000,000 francs necessary for national defense.

There remained, however, the previous deficit. Here, flotation of a loan would be necessary. The Finance Minister announced the following plan: first, 3-year National Defense tax-exempt Bonds, carrying 4 per cent interest, would be emitted, to replace gradually the 2-year present issue. A loan would be launched May 15 to the amount of 6,000,000,000 francs issued at 98, which would be redeemable in forty years. The rate offered was 5 per cent, the lowest offered to Government loan subscribers in many years.

M. Reynaud insisted that the country's financial situation was very satisfactory. Much gold had been repatriated in the preceding six months, so that, early in April, the Exchange Stabilization Fund had gold reserves amounting to almost 20,000,000,000 francs, 5,000,000,000 of which had just been transferred to the Bank of France. Revenue was coming in well; the commercial balance was steadily improving.

To all appearances, the French shared the Minister's optimism for, shortly after, he was able to announce that 1,000,000,000 worth of the new Defense bonds had been subscribed. The loan also was taken by the public within 24 hours (May 15). This made possible an interest reduction on short-term Treasury bonds; from 3 per cent to 1½ on 3-month bonds; from 4 per cent to 2½ per cent on 1-year bonds; from 4½ per cent to 3 per cent on 18-month bonds. Short-term loans floated abroad were converted into long-term obligations by arrangement with Dutch and Swiss banks. It was also announced that for the period November 1938-March 1939 saving-bank deposits exceeded withdrawals by 4,000,000,000 francs.

Economic and Political Situation.

In a report addressed to the President of the Republic M. Daladier said that the economic situation also was very much improved. There was practically no unemployment in the country and he pointed out that the improvement was not felt in the armaments industries alone; building permits had increased 52 per cent during the first three months of 1939 compared to the same period in 1938; automobile sales to individuals also were going up (61,500 cars sold from January to April 1939 as against 52,111 for the same period in the preceding year).

The political game, however, was not altogether forgotten. The seven-year term of the President of the Republic expired in the spring. A few outstanding parliamentarians belonging to the Left and the Center were spoken of as likely candidates and a lively campaign was going on behind the scenes. Premier Daladier, however, was determined to stop all political wrangling and he prevailed upon President Lebrun to run for a second term, a fact without precedent in the history of the French Republic. On April 5, the Senate and the Chamber met together in Versailles, forming the National Assembly for the purpose of selecting a President. On the first ballot, M. Lebrun was reelected; the vote was far from unanimous: out of 910 votes, he received only 506, actually less than he had obtained when he ran the first time in 1932. This showed that M. Daladier still had to count upon a determined minority in Parliament.

Under the ominous circumstances, orderly work and union among the French was more than ever necessary. For the first time in many years, French workers gave up their custom of striking on Labor Day, May 1. On May 11, Parliament met for the spring session. It had been anticipated that, following political usage, Daladier would tender his Cabinet's resignation on the day when President Lebrun officially began his second term; many believed that the Premier would take advantage of this opportunity to make some changes in his ministry. But nothing of the kind happened. Facing the Chamber, he first read a message from President Lebrun, and then delivered a strongly worded speech which was applauded by all those present. Again, the French Premier expressed his willingness to participate in any conference which might be called with a view to ensuring peace, and he stressed at the same time the determination of France to take up arms should the necessity arise.

By the end of June, Daladier decided to close the session of Parliament six weeks after its inception. The opposition was taken by surprise and protested vehemently against this new curtailment of the Deputies' prerogatives. The Premier answered that the defense of the country must come first, and that no time could be lost in political discussions. He refused to make any definite promises about the course he would pursue, although he said that Parliament would be summoned in case of emergency, and an emergency, he warned the Deputies, might well arise during the summer. France was well prepared for it: she would 'rise with all her forces against any attempt at the domination of Europe.' To arm, remain united and watchful, he concluded was the present duty of all. His declaration was approved by 350 votes against 231 and the Chamber adjourned sine die (June 27).

Improved Financial, Economic and Military Conditions.

On July 5, M. Reynaud, addressing the British and American newspaper correspondents in Paris, told them that he could report continued improvement in the financial and economic situation of France, in spite of the European events. He said that in June twice as much gold had returned to the country as in May. The Treasury was in an unusually good condition. The production index had increased from 83 in October 1938 to 97 in May 1939. He also quoted figures on industrial activity: Whereas in November, only 3.3 per cent of the workers were doing overtime, now 33 per cent were working extra hours. All that, he said, was no miracle, but the effect of the courage of the French people.

The French Government took advantage of the Bastille Day celebration to display the country's military might. On July 14, a huge military parade took place in Paris. Important contingents of colonial troops, including the Foreign Legion, took part in the parade, in which British regiments also participated. At the same time, France celebrated the 150th anniversary of the 1789 Revolution and the birth of French democracy. There were ceremonies throughout the country in honor of that democratic ideal which the French knew they might be called upon to defend in the not distant future.

Additional Decrees.

On July 28, the Cabinet approved a new batch of decrees and made an important decision. The mandate of the present Chamber expired in the spring of 1940 and a general election would normally be held in May of that year. Daladier was of the opinion, however, that with the tense European situation it would be unwise for the political parties to embark upon an electoral campaign, with its attendant bickerings and partisan agitation. The Cabinet decreed, therefore, that the life of the Chamber would be extended to June 1, 1942. Other decrees created a Commissariat of Information headed by the well-known writer J. Giraudoux, placed radio broadcasting under the direct control of the Premier's office, and reorganized the Wheat Office. On July 20th, the Cabinet approved and published a plan destined to encourage repopulation in France. The Government felt that the country surrounded by powerful neighbors with fast increasing populations must do something to deal with that problem. A special committee had been appointed some time before to study the question.

The findings of this committee and the suggestions offered were embodied in a Family Code, a very elaborate plan containing 402 articles covering every aspect of the population problem. Measures of all kinds were offered: a bonus paid for each child, loans to young married couples, special tax exemptions for large families, new taxes on bachelors, spinsters and childless couples. Severe penalties were provided to punish abortion and pornography. The adoption of children was facilitated. Changes were introduced in the inheritance laws: for instance, the inheritance tax was reduced 50 per cent in a family of four direct heirs and increased 15 per cent when the legatee died childless. The plan entailed considerable extra expenditures, but the Finance Minister, in spite of his announced policy of strict economy, was ready to make an exception in favor of the Family Code provisions in view of the recognized urgency of the problem which it was intended to solve.

There was a tragic irony in the Government thus taking special measures to increase the population of France barely one month before the country was to be plunged again in a war which might well prove as sanguinary as the World War.

Once again, Mr. Reynaud, reviewing the country's situation, in an effort to inspire confidence in his management of the people's finances, quoted very gratifying figures. France, he said, now had the second largest gold reserve in the world, coming immediately after the United States of America. In the last few days of July eleven tons of gold were added to this reserve, and for the second time in 4 months 5,000,000,000 in gold was being transferred to the Bank of France, raising the Bank's reserve to 97,000,000,000 francs.

FRANCE IN WAR TIME

Cabinet Changes.

On Sept. 13 following the declaration of war against Germany, changes in the French Cabinet were announced. Daladier who, beside the Premiership, already held the portfolio of War and National Defense, took on that of Foreign Affairs, while ex-Foreign Minister Bonnet became Minister of Justice. There were other minor changes and two new ministries were created: M. Dautry was made Minister for Armaments, Mr. Pernot, Minister for the Blockade.

New Decrees.

A new series of decrees made necessary by the war was also published. The most important was the establishment of foreign exchange control and the regulation of the export of capital (Sept. 10). Another decree (Sept. 16) made compulsory the declaration of foreign holdings; another forbade the increase in wholesale and retail prices above the Sept. 1 level. The extraordinary national 2 per cent tax on incomes and salaries was to be doubled as from Jan. 1, 1940, and would be raised to 15 per cent for men between the ages of 18 and 49 not under the colors. On Oct. 1, another decree intended to discourage profiteering was issued: graduated surtaxes were levied on the profits in all industries, except in those working for the export trade which the Government wished to encourage to finance its own war purchases abroad.

Communist Party Dissolved.

The support of the Nazi-Soviet pact by the French Communists in August brought Government disapproval upon them (see Foreign Affairs section below). With the outbreak of war, the Cabinet completed the measures already taken against Communism by ordering, on Sept. 26, the dissolution of the French Communist Party, and forbidding the spreading by any means of the teachings of the Third Internationale. The Communist Party proceeded to change its name to that of Workers and Peasants Party, but the Government claimed that it was an illegal reconstitution of the dissolved party. In the Chamber, members of the other groups refused to sit on the same committees with them after they had signed an open letter addressed to M. Herriot, President of the Chamber, advocating the opening of peace discussions with Germany. As soon as the special Parliamentary session was officially over (Oct. 5), the Government began rounding up the former Communists. Some, including Deputies Thorez and Marty, managed to escape being arrested. The Cabinet issued another decree aimed indirectly against Communist influence among the ranks of labor; it stipulated that workshop delegates would no longer be elected in the various establishments by the workers. In the future they would be appointed by the Trade Unions, most of which had recently dissociated themselves from Communism. This method was expected to prevent the possible capture of the shop steward machinery by Communists or pacifists.

Altered Living Conditions.

The nation meanwhile was slowly adjusting itself to war conditions. In the first days of September, under the fear of expected attacks from the air, Paris was almost entirely evacuated by its population, but when the air-bombings did not materialize many Parisians returned to the capital where life soon resumed its normal course, except for the general blackout at night. The inhabitants of Lorraine, however, living in the war zone in the vicinity of the Maginot Line, who had been evacuated to western and southwestern France at the beginning of the war could not go back to their homes. The problem of harboring entire populations, of helping them to get adjusted to new living conditions in a new environment proved very complicated, and the Government was making special efforts to iron out the many difficulties encountered during the first weeks.

Rationing.

In the beginning it was not felt necessary to institute a strict system of food rationing, since stores were plentiful. By the end of October, however, Monday was made a meatless day; in addition the sale of beef was forbidden on Tuesdays, and whereas before the war wheat planting was limited by the National Wheat Office, a decree published on Nov. 8 allowed French farmers to plant all the wheat they liked. Gasoline also was rationed.

Control of Labor.

The Cabinet took new measures designed to tighten its control over labor: a decree issued on Oct. 30 gave the Government the right to requisition workers and send them to any factories that the Government deemed necessary in the interests of national defense. Vacations with pay were suspended and the Premier reserved to himself the right to order the continuation of work on national holidays.

Convening of Parliament

The full powers granted the Daladier Cabinet to rule by decree expired on the last day of November and it was necessary to obtain from Parliament an extension of that power. Besides, with the year drawing to its close, the time had come when the French Parliament must use its last privilege: the discussion and vote of the budget. Already the Finance Committee of the Chamber had had the budgetary provisions for 1940 under consideration for two weeks. A decree issued on Nov. 28 convoked the Deputies for the morning of Thursday, Nov. 30.

This first sitting of the House since the declaration of war provided a full amount of excitement. M. Daladier had scarcely begun to read his declaration of policy when one of the former Communist leaders. Deputy Bonte, who had been in hiding since the rounding up of members of his party, made a dramatic appearance throwing the assembly into an uproar. Attendants immediately expelled him, and once outside the Chamber, he was put under arrest. Daladier proceeded with his declaration, in which he expressed France's determination to fight until victory was achieved. He explained that the military command had refrained from carrying rash offensive operations against the German Westwall to avoid wasting human lives, and after praising the recent economic accord concluded with Britain, he said that the 'miserable attempts' of Germany's propaganda to drive a wedge between the Allies would prove futile. The time, he added, was not yet ripe to speak of the aims and conditions of peace; winning the war was the only goal towards which all the energies of France must tend.

The speech received unanimous applause, but when the Premier demanded an immediate vote on the question of continuing the decree powers, he met with the strongest opposition. The speaker for the Finance Committee of the Chamber proposed that (1) these powers be limited to the duration of the war, (2) that the decrees be subject to parliamentary ratification within a month and that those not so ratified be considered invalid, (3) that Parliament be summoned for this purpose whenever necessary. The Premier accepted the first proposal but rejected the other two. Many deputies from all parties, including some from Daladier's own Radical-Socialists insisted that Parliament could not abandon its right to control the executive. The Prime Minister was forced to accept a compromise. He said that he must act quickly and would not therefore have Parliament sit permanently: he agreed however to submit each decree for approval within one month 'if Parliament was in session.'

At the end of a 12-hour debate, he obtained the unlimited powers he demanded by a vote of 318 to 175 after many deputies explained that they voted for the government only because they felt that an adverse vote might make a bad impression in the country and abroad. The next day (Dec. 1) Daladier came before the Senate. The Upper House granted him full powers by an overwhelming majority (282 to 23), after he had declared that he did not mean to conduct the war without the collaboration of Parliament whose standing committees would always be at hand for consultation.

Budget.

The Chamber then took up the discussion of the budget for 1940. Finance Minister Reynaud asked the Deputies to simplify the passage of the different articles by adopting the method of 'rapid procedure' limiting the number of speakers and the length of speeches. In his budget proposals, the Minister included only ordinary civil expenditures, exclusive of outlays for military purposes. The latter would be covered by loans and bond issues. M. Reynaud made it clear that only military expenditures would be covered by borrowing. He wanted the principle established that all civil expenditures should be paid by the taxpayer, all the military ones by loans. That would be his constant budgetary policy for the duration of the war, he asserted. Parliament was asked therefore to pass a budget calling for an outlay of 79,000,000,000 francs. This represented an increase of more than 25,000,000,000 over the 1939 civil budget, the great difference being accounted for by the fact that the Minister incorporated in the ordinary budget compensations to families of needy soldiers and to families of refugees from the war zone, the deficit in postal and railroad services and the financing of public works.

The discussion of the budget lasted more than a week. M. Reynaud quoted figures showing the extent of the financial gains in the past months; 14,000,000,000 francs of exported capital had been repatriated and 10,000,000,000 in gold had returned to the Treasury since the beginning of the war. He also expressed his satisfaction with the Franco-British financial and economic accord which he hailed as 'a starting point for the construction of a new Europe.' The budget was passed on Dec. 14 by a unanimous vote of the 521 Deputies present. It was balanced, at least on paper, with receipts amounting to 79,360,000,000 francs, to which new taxes levied on tobacco, postage, telephone and telegraph communications, etc. would contribute.

The military expenditures had to be voted next. M. Daladier said that credits to the amount of more than 55,000,000,000 francs would be needed to cover the first three months of 1940. In his speech the Premier reviewed the military situation during the first weeks of the war: in that period, he said, total casualties on land, in the air and on the sea were 1,434. He praised the morale of the soldiers, the quality of the material and explained that most of the money he was asking for would be spent on armaments, especially on new battleships and better aviation equipment. The Premier was the only speaker at the sitting which lasted two hours, at the end of which the Deputies by a unanimous vote approved the credits demanded. The total outlay necessary for the entire year 1940 was estimated at more than 240,000,000,000 francs, a staggering figure, and the understanding was that subsequent credits would be dealt quarterly and taken care of by Treasury loans or armament bonds.

At the end of the month, the Senate in its turn after a two-day session (Dec. 28-30) approved unanimously both the civil budget and the military credits for the first quarter of 1940. Both the Premier and the Finance Minister addressed the Upper House, spoke of the heavy sacrifices that lay ahead and expressed their absolute confidence in the ultimate victory of the allied forces.

FOREIGN AFFAIRS

In March 1939 the situation in Central Europe engrossed the attention of the French Government. The establishment of a German protectorate over Bohemia and Moravia, and the occupation of Prague by Hitler's troops in violation of his promises of the preceding September at Munich drew strong protests from France (March 14). The French ambassador to Berlin was recalled home 'for consultation,' and France, together with Great Britain and Russia refused to recognize the juridical validity of Germany's annexation. On March 17, Daladier more and more preoccupied with the dangers created in Europe by the last German move decided to ask Parliament for full powers to take by decrees 'all appropriate measures to maintain and increase the strength of France,' a method usually resorted to by French Cabinets in times of stress or emergency. There was a rapid and sharp debate in the Chamber; Daladier said that it was imperative that he be granted full powers without delay and refused to change anything — 'not a word, not a comma' — in the Government's project. The fate of the country, he declared, was at stake, as Germany grew more dangerous than ever. He posed the question of confidence and obtained the powers he demanded by 321 votes against 264. The next day, the Senate followed suit with an overwhelming majority (281 to 17). A first series of decrees was issued on March 20, intended 'to reinforce national defense.' They provided for an increase in the personnel of the army, the speeding up of armaments, the creation of a Direction of Production, the establishment of censorship over all information of a military nature.

At the end of March, M. Lebrun, President of the Republic, accompanied by Foreign Minister Bonnet, paid a state visit to the King and Queen of England. Franco-British friendship and collaboration in the face of European difficulties were emphasized in numerous speeches (March 21-24). Meanwhile, on March 22, under Hitler's threats, Lithuania returned the Memel territory to Germany. The international tension increased; on the 26th, Mussolini declared that the Italian claims on France 'had names' and these names were Tunis, Djibuti and the Suez Canal. Three days later, in a special broadcast to the French nation, Daladier answered the Italian Dictator: while he expressed himself ready to examine any proposals, he reiterated that 'not a single acre, not a single right would be ceded' by France.

By May the European situation was growing from bad to worse, requiring, as the Premier declared, 'the duty of continuous vigilance.' In anticipation of a conflict which every week loomed more imminent, the democracies and their totalitarian opponents were playing new moves on the European chessboard. On April 7, Albania was occupied by the Duce's troops. At the same time, the adhesion of Spain to the Anti-Comintern front was made public. On April 13, a joint guarantee to Greece and Rumania from France and Great Britain was announced. Yielding to French pressure, Chamberlain established military conscription in England for the first time in the history of that country (April 26). Two days after, in a two-and-a-half hour speech meant to answer an appeal sent earlier to him by President Roosevelt, Hitler made known his claims on Poland, denounced the treaty signed with that country in 1934 and, as a protest against Mr. Chamberlain's 'encirclement policy,' denounced also Germany's naval agreement, with Great Britain.

Relations with Russia, Poland, and Turkey.

Steps were taken to implement the guarantee given Poland; conversations began between the military experts of both nations. The Government felt, however, that the Polish guarantee had little practical value unless Russia could become a party to the treaty. The Kremlin seemed anxious to sign a military pact with Great Britain and France, and on May 20 the British Foreign Minister, Lord Halifax, went to Paris to discuss the possibility of such a pact, whose conclusion must be hurried in view of the numerous incidents daily occurring in Danzig and along the German-Polish frontier. On their side, the Italians and Germans were losing no time. On May 22, the Foreign Ministers Count Ciano and Herr von Ribbentrop signed the so-called 'Pact of Steel' which seemed to unite the axis-powers more strongly than ever. But conversations between British, French and Russian delegates proceeded with extreme deliberation; for reasons of internal policy, the French Government was obliged to move with a great deal of caution for it did not want to make any move which might encourage the French Communists who opposed Daladier's policies at every turn. The negotiations with Russia therefore dragged, but Foreign Minister Bonnet was able to announce that an accord with Turkey, already linked to Great Britain, was in prospect. A treaty of mutual assistance between the two countries was finally signed in Paris on June 23 and ratified by the Turkish National Assembly in Ankara on the 30th. In order to secure this agreement, France consented to abandon to Turkey the Republic of Hatay (district of Alexandretta). A French military mission under General Huntziger soon after left for Ankara. See also SYRIA; TURKEY.

In July Foreign Minister Bonnet could not report optimistically on the result of the negotiations with Moscow. At a meeting of the Council of Ministers (July 11) he explained some of the difficulties encountered but reiterated France's intention of fulfilling her engagements in Eastern Europe notwithstanding those difficulties.

In August, the tension between Germany and Poland became more and more acute. New efforts were made to conclude a military agreement with the Soviets. French and British military experts arrived in Moscow on Aug. 11. A few days later (Aug. 18), a commercial credit of 430,000,000 francs toward the purchase of armaments and equipment was granted Poland. France took extraordinary military precautions; the Maginot line on the German frontier was fully manned and many categories of reservists were called to the colors.

Effect of Russo-German Pact.

The announcement of the signing of a pact of non-aggression between Germany and Russia on Aug. 23 was a complete surprise and a shock to the French. Their military experts were still in Moscow and the public had been given to believe that negotiations were progressing favorably, if somewhat slowly. Now, everyone realized that with the new pact between the Nazis and the Communists, the chances for a peaceful settlement of the German claims on Poland were indeed very slight. On Aug. 25, Premier Daladier, in a radio broadcast, recognized that fact. The new pact, he said, increased the chances of aggression against the friends of France and France herself; he still hoped for peace, but warned that the country might have to fight soon to avoid 'servitude.' On the eve of the impending conflict he made a personal effort to preserve peace and sent a message to the German Führer, urging him to find a peaceful solution of the Polish question and offering his good services in that direction. Herr Hitler answered that it was too late to modify Germany's claims. 'Danzig and the Corridor must go back to Germany.'

The conclusion of the Russo-German treaty was a severe blow also to the French Communist party. Some of its members, including several Deputies, resigned immediately, but the majority and their newspaper L'Humanité approved the pact which they presented as a peace move on the part of Russia and a setback for Germany. A decree taken Aug. 27 forthwith suspended the Communist paper and other periodicals. On the 28th, a general censorship of the press, radio, telegraph, etc., was established.

Parliament Convenes in Extraordinary Session.

While everybody realized that since 1918, Europe had never been nearer to war nevertheless, to the last, they all hoped that a conflagration could be avoided. Even after Hitler announced the incorporation of the city of Danzig in the Reich and ordered his armies to march into Poland, many thought that the situation was still not hopeless. The French ambassador asked that hostilities in Poland should cease and Polish territory be evacuated by the German troops. Meanwhile the Council of Ministers decreed a general mobilization beginning Sept. 2 and declared that a state of siege existed for France and all French-owned territories. Parliament was summoned for an extraordinary session that same day. To the assembled Deputies Daladier read a long declaration reviewing the European situation and the events leading to the present crisis. He explained that France must respect her signature and come to the help of Poland, but France was really fighting 'for her own life and independence. To-day, France commands' he concluded. This declaration was unanimously applauded and the Chamber immediately approved a credit of 70,000,000,000 francs and authorized the Bank of France to advance 25,000,000,000 to the Treasury.

War Begins.

The time given Germany to stop hostilities in Poland expired at 5 P.M. on Sept 3. As there was no answer from the German Government, M. Daladier announced that a state of war as from that date existed between France and Germany. Great Britain had already made a similar declaration a few hours before. The next day, the first French war communiqué announced that hostilities had begun. Foreign Minister Bonnet signed a protocol with the Polish ambassador in Paris by which the two countries pledged themselves to conclude neither an armistice nor a separate peace with Germany. On Sept. 12, the Interallied Supreme Council held its first reunion 'somewhere in France'; M. Daladier and General Gamelin, Commander-in-chief of the Allied forces conferred with Mr. Chamberlain and Lord Chatfield.

While Germany's forces rapidly overran Poland, military operations on the Franco-German front were pursued on a small scale. But diplomatic activity continued in the Balkans and the Eastern Mediterranean. On Oct. 19, Turkey signed a fifteen-year treaty of mutual assistance with France and Great Britain which was hailed as a great diplomatic victory for the Allies, balancing the Soviet-German pact of August. The repeal by the American Congress of the arms embargo clause in the Neutrality Bill at the end of October gave the French further cause for rejoicing and France immediately proceeded to take advantage of the 'cash-and-carry' provision to buy much-needed war material from the United States, especially trucks and airplanes.

Anglo-French Cooperation.

During November, France and England made successful efforts to establish fuller economic cooperation between the two countries. Less than three months after the opening of the hostilities an agreement was reached such as it had taken three years to achieve in the World War. The agreement was prepared during a visit of M. Reynaud to London (Nov. 12). It was announced on the 17th that at the third meeting of the Supreme Allied War Council held in England an economic accord had been reached, giving new proof of the resolution of both countries 'to coordinate their efforts in the most complete manner.' They would pool all their resources, use them in the common interest, make their purchases abroad jointly in order to avoid competitive bidding, undertake to equalize sacrifices between their populations, etc. On Nov. 26, a Franco-British coordinating committee was established with headquarters in London and with Jean Monnet, a British economist of French origin, as chairman. The French Government announced also the creation of a special national Committee to take charge of coordinating all the arrangements within France. Arthur B. Purvis of Montreal was appointed chief of the Anglo-French missions to be established in the United States for the purpose of buying supplies and materials there. Conferences were held in Paris at the same time to have perfect cooperation between the Allies in connection with the retaliatory measures taken against German exports. Georges Pernot, French Blockade Minister, issued instructions to have all ships bound from Germany submit to the same control as ships bound for that country. See also EGYPT; GREAT BRITAIN; WORLD PEACE.

Italian Demands on France.

See ITALIAN EAST AFRICA; ITALY: Foreign Relations.

See also ARCHITECTURE; AVIATION; RELIGION: Jews; WORLD ECONOMICS; INTERNATIONAL BANKING AND FINANCE.