ALTHOUGH a great deal has been written about the political situation in France, about French diplomacy, and even about the financial position of the country, very little attention has been paid to the extraordinary economic developments which have taken place. These economic developments will, in the end, prove to be the permanent factors. They are in reality much more important than the disputes about Reparations or even than the immediate difficulties which France experiences in balancing her budget.

When a short time ago I contrasted the financial weakness with the economic strength of France in a paper in the Atlantic Monthly, I received a number of letters urging me to write at greater length of the industrial and commercial enterprise of France. It is, indeed, a subject which has been insufficiently studied. The only contribution of consequence that I know of is an official report prepared by Mr. J. R. Cahill, the Commercial Counsellor at the British Embassy in Paris, and his 'Report' is naturally for private circulation only. It is, however, exceedingly useful, and I am myself indebted to it for many of the figures which I shall give.

This Report was an eye-opener to those whom it reached. Nothing can be more erroneous than to suppose that because France finds her currency falling and has not yet managed to obtain

budgetary equilibrium, the country is therefore poor. The contrary is the case. In my opinion, France is not only potentially but actually one of the richest countries in Europe, and it may well be that in a few years she will be the very richest of them all.

There has been, since the war, a trade depression which has had grave consequences in European countries, and even at one period in America. England particularly has suffered; Italy, too, has passed through deep waters. The industrial population of Germany has experienced trying times; Russia has, of course, been afflicted with famine. But in France there have been practically no labor troubles in spite of the upheaval of the war, in spite of the depreciation of money for the simple reason that there have been no unemployed. There has been more work to do than the man power of France could accomplish. Instead of the laborer seeking work, the employer of labor has been handicapped because he could not find sufficient men; so much so that large numbers of foreign workers have been imported and, in addition, the manufacturers have been compelled to introduce more and more machinery.

This machinery, at first bought abroad, is now being made in France. France, which was regarded chiefly as an agricultural country before the war, now deserves the name of a highly industrialized country. Something like a

transformation has been effected. A remarkable impetus has been given to all branches of activity. France is equipped as never before. If in the If in the devastated areas there are still houses to be built, the industrial reconstruction is practically completed, and the output of the coal mines which were destroyed or damaged is being rapidly increased, partly on account of improved technical equipment. The textile factories which were blown to pieces have been restored on a larger scale than before, and better and more modern machinery has been installed. This is true of the woolen and the cotton trades, and is also true of the chemical and engineering trades.

At times there have been protests, both in France and abroad, at what was described as the excessive expenditure on reconstruction. It was urged that the war victims had inflated their claims, that the French Government had paid without strict investigation, and that in consequence the demands on Germany had been swollen beyond

reason.

Into these charges it is not my purpose to go at this moment. It would indeed have been surprising had not more been asked than was absolutely necessary, when the whole spirit which prevailed at the time of the Armistice was that Germany was able to pay and could be made to pay. These hopes have doubtless been falsified, and the French exchequer is too heavily burdened.

The morality of it all may be doubt ful, but in the circumstances such exaggerations were inevitable. Moreover, from the national point of view, a fairly good bargain has been made. At the price of temporary financial difficulties, France has replaced old and inefficient factories by new and improved works. Eventually, even though individual firms may have profited unduly, it will

be France as a nation which will profit. Since there had to be restoration, it would have been foolish to have restored the bad as well as the good. It would have cost as much to put up buildings similar to those destroyed as it cost to put up better buildings. It would have been absurd to look for antiquated machinery when up-to-date machinery was available.

In any case, without minimizing the sufferings of France, it is fair to say that, in the long run, France will have gained; for not only has the industrial North been improved, but many factories which were erected in other parts of France as an emergency measure will continue to produce.

Nor has agricultural reconstruction been delayed. The production is already about equal to that of the prewar days, and superior agricultural methods have been adopted. The farmer has been taught to employ machinery. In the old days the French farmer had somewhat primitive conceptions; he lagged behind the farmer in other European countries. This was doubtless partly due to the system of small holdings. But now, thanks to intensive propaganda, a coöperative spirit has been fostered even in the smallest villages, and the farmers are learning to club together for the purchase of agricultural instruments.

At the same time, the State has been quietly at work and, while the politicians have been chiefly clamoring about German recalcitrancy and the possibility of a German Revanche, the authorities have been organizing the resources at the disposal of France. Ports and waterways, railways and roads have been made, and schemes of all kinds have been under consideration. Indeed in many instances, their execution has begun. There has been a systematic utilization of water power power-and perhaps it is in this respect that the future

of France is most hopeful, since, if France is short of coal, she has plenty of rivers and waterfalls from which she can obtain all the electric power she needs.

The recovery of Alsace-Lorraine gave France new resources in coal and in iron ore, in potash and in oil, and increased the metallurgical, the engineering, and the textile industries of the country.

But perhaps the most striking advance that has been made in the industrialization of France is the new organization of the great basic industries on the model of this German Trust system. The large firms have concentrated and consolidated, they have even reached out beyond the frontiers and have purchased many undertakings along the Danube and in other parts of Middle-Europe. There is an interlocking of interests, especially in metallurgical groups, which is perhaps the most astonishing of the post-war phenomena.

I

When one considers the progress that has been made in the ten départements which constitute the Liberated Regions, one is impressed with the resourcefulness of France. The occasional scandals of which one hears, and which have been vastly exaggerated for political purposes, are comparatively unimportant.

The chief complaint of Socialist agitators is that the big firms have received compensation, while a large proportion of the people are still living in temporary dwellings. There is an excellent demagogic appeal in revelations of this kind, and it is not to be doubted that those who were best able to look after themselves and to push their claims, received preferential treatment. That is in the nature of things. But considering the immense character

of the undertaking, considering that it was necessary to set up machinery of an altogether novel character and that the task was vast and complicated, it is absurd to speak of the blunders that have been made in administration as a new Panama scandal.

For my part, I have nothing but admiration for the successive French Governments which have encouraged the restoration of the North and, without financial means, have succeeded in a few short years in reinstating a large majority of the total pre-war population. The figures show that two million people have returned to their homes, and that the population of the North is only a few thousands less than it was in 1914. There were altogether threeand-a-quarter-million hectares of land devastated; well over three million hectares have now been cleared. There were about two million hectares of agricultural land devastated; and well over a million-and-a-half hectares are now under cultivation again. There were 3500 communes occupied by the enemy and in many cases completely annihilated; municipal organizations have been reëstablished in 3250 of these communes.

Before the war there were 7298 elementary schools; there are now 7008. There are actually more post-offices open than in 1914. All the main railway-lines have long since been restored, and there remains little still to be done in the reconstruction of local lines. Practically all of the water-ways are navigable, and the roads are available for traffic. Many districts were denuded of live-stock; there is now no scarcity. Wheat and sugar, which are the principal crops, are grown on the same scale as in 1914. Out of 22,000 industrial establishments, over 20,000 have been rebuilt, and, as already stated, many of them are considerably modernized.

Generally, the industrial efficiency of the North which was the chief centre of trade, has been greatly increased. If the coal output of the Nord and the Pas-de-Calais departments is compared with the coal output of 1919, it will be found to have increased nearly fifteenfold. It is true that the task of rebuilding dwelling houses is far from finished, but it must be remembered that the number of houses destroyed was three hundred thousand, while one hundred and fifty thousand were seriously damaged, and three hundred and fifty thousand partially damaged. Obviously it will take some years before the inhabitants can be given something more than the temporary wooden houses which were run up; but it should be noted that not only the authorities but the minor companies and other employers of labor have promoted great housing schemes. The Lens Mining Company alone has built nearly 70,000 houses, and other companies which could be mentioned have built five thousand here and three thousand there. It is estimated that altogether the expenditure of the French State, in default of Germany, on the ruined North will be about one hundred milliard francs.

Not only have the necessary funds been raised by loans through the Crédit National, but the municipalities and other public authorities have in many cases issued loans, while groups of manufacturers, also,whether engaged in the mining, the metallurgical, the sugar, or the textile industries, have raised capital for reconstruction purposes, their loans being based upon their assets, and upon their claims on the French Government. Coöperative organizations have rebuilt churches which had in some cases been razed to the ground during the war.

Altogether it would seem
seem that,

taking all the circumstances into consideration, remembering the utter devastation that was caused in those departments in which before the war, industry was almost completely concentrated, the efforts that have been made are highly creditable, and France deserves something better than reproach for the inevitable anomalies and particular grievances that have arisen. The State may have been imprudent from the strictly business point of view in accepting full responsibility for the restoration of the North, and in pledging its own credit before it was really ascertained whether Germany would pay; but it cannot be denied that morally the State owed this reparation to the inhabitants and that, despite financial difficulties, the State will eventually reap its reward.

II

When we examine the general industrial situation in France, we find that the attempts that are being made to develop the resources of the country are amazing. Formerly no one thought of France as an industrial country, although as matter of fact the transformation of French manufacturing equipment had begun before 1914. The war itself helped to accelerate the process. It will be remembered that when the North was overrun by Germany, it was found necessary to transplant industries to various parts of France. Paris itself saw an astonishing increase of factories; Lyons, which had the ablest of mayors, M. Edouard Herriot, became still more highly industrialized; Marseilles, Bordeaux, St.-Nazaire, Rouen, and many other centres provided new factories and workshops; and these factories and workshops were not scrapped at the Armistice.

In the Pyrenees, in the French Alps, in the Central Plateau, there was a

veritable metamorphosis. It was a metamorphosis that will have considerable influence on the future of France. Considerable in itself, it seemed to set in motion fresh forces a hitherto unknown desire to create goods on a vast scale, to make the most of French riches, to become as far as possible selfsufficing, and even to compete with the nations that were regarded as the industrial leaders of Europe. This spirit of emulation once awakened has grown tremendously in France.

It would take many pages merely to enumerate the plans that have been prepared, often under the auspices of the Minister of Public Works, M. Le Trocquer, who, after remaining at his post under successive Governments for more than four years, recently went out with the Poincaré Cabinet.

It is not in France alone that these developments are taking place. In spite of her colonial possessions, France had never shown any particular aptitude for colonization; but since the war the newspapers have been filled with have been filled with accounts of the wonders and possibilities of Indo-China, of Algeria, of Morocco, and of other places in which the French influence is felt. This is not mere idle propaganda. Substantial works have been undertaken, and France will within the next decade undoubtedly add to her overseas riches as well as to the riches of the metropolitan country.

But, for the moment, we are not so much concerned with what is happening under French guidance in Africa where roads are being made and ports constructed in the Near East, and in the Far East; it is the industrial organization of France at home that is probably the most notable feature to be observed.

If I may quote from the Report of Mr. Cahill, the most conscientious of officials, it will be seen that something

entirely new has come into French life.

'As in the other principal producing countries,' he says, 'the keynote of France's recent reconstitution has been a consolidation, whether along horizontal or vertical lines, and the regional developments in these directions have tended to become national, and even international, in scope. This movement has been peculiarly conspicuous in the great metallurgical and engineering industries, but its operation has been visible in a whole series of other industries, and it has been attended by enlargement and superior equipment of the units.'

Examples could be given in profusion. The great metallurgical groups are those of Schneider, the Compagnie des Forges et Aciéries de la Marine et d'Homécourt, the Société des Mines de Longwy, La Société des Aciéries et Forges de Firminy, and other concerns which are interested chiefly in Lorraine. Mutual interests exist between many of them. Schneider and de Wendel and the Marine et d'Homécourt (better known as St.-Chamond) have interwoven their interests and have connected up with Belgian works in Luxemburg.

These companies, for the most part, have not only secured control of the sources of their chief raw materials, but have obtained control of the concerns which utilize their products. The Schneider Company has some participation in coal and ore mines, in iron and steel works, in shipbuilding firms, in firms which manufacture electric machinery, guns, dredges, machine too's, boilers, optical, and scientific instruments. Schneider cannot be located in one district, the firm spreads out all over France - at Paris, Creusot, Bordeaux, Cherbourg, Caen, Havre, and so forth.

The St.-Chamond Company, while still existing in St.-Étienne, has im