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Royall Tyler to Mildred Barnes Bliss, June 25, 1925

Finance Ministry

Dearest Mildred.

Robert gave me your letter of the 9th. Ever since I got back here ten days ago I’ve been at it so hard with the report and accumulations of stuff piled up while we were at Geneva that I haven’t had time to think—not that the results of that operation are anything particularly startling even now.

I was so very glad to be able to meet Robert in Paris and talk over that most distressing businessThe nature of this “distressing business” is not known. See also letters of May 3, 1926 [3], and July 21, 1926. with him. I was quite sure in my mind what he wanted to talk about when I got the wire in Geneva. After seeing the people who knew all about the affair, I came to the conclusion that the only hope lay in the amnesty law, for there seemed to be no doubt whatever about the essential facts of the case. Sometime I’ll tell you my own psychological theory of the case—a very sad and sinister one. It is a dismal thing to see fine things crumble: do they crumble, or were they never fine, and is one’s own judgment of any value whatever? These experiences at any rate teach one to prize the few about whom one is sure.

Paris looked enchanting in spite of the ExhibitionThe Exposition internationale des arts décoratifs et industriels modernes (International Exposition of Modern Industrial and Decorative Arts) was held in Paris between April and October 1925. and the crowds—to know what Paris can look like in early June I recommend a year’s stay in Budapest first. As to what is going to happen to France, I wish I knew, but I fear there is no doubt that there is serious trouble ahead, for there has been an enormous loss of confidence in the franc among the French themselves, and no one can say at present what demands are going to be made on the Treasury in the immediate future by the bearers of short term bills. These demands, if they are met, mean a great increase in the note circulation—inflation followed by depreciation. If they are not met, i.e. if the Govt. prolongs their currency sine dieFrom the Latin “without day,” signifying “without designating a day for change.” as many people advocate, the blow to confidence would be a heavy one, but as far as I can see the second course is the less dangerous of the two miserable alternatives.

I cannot take seriously the opposition’s claim that the Herriot and Painlevé Govts.Édouard Hérriot (1872–1957), a French Radical politician of the Third Republic who served three times as prime minister, the first of which was between June 14, 1924, and April 17, 1925. He was succeeded by Paul Painlevé (1863–1933), a French mathematician and politician, who served as prime minister between April 17 and November 22, 1925. are responsible for destroying the country’s confidence in its finances. What has destroyed confidence is the fact that France, to say nothing of her foreign debts, has an internal debt of 150 funded and 130 unfunded or floating = 280 milliard francs. The floating debt is equal to four years’ expenditure. This situation was brought about primarily of course by the war, but it has developed beyond any possibility of being dealt with by normal methods thanks to the policy pursued for 2 1/2 years by PoincaréRaymond Poincaré (1860–1934), a French conservative politician who served five times as prime minister and as president of France between 1913 and 1920. of deliberately neglecting the financial aspects and banking exclusively on the political factors, going on presenting to the country a picture of its own affairs which first the outer world and later the country itself recognized as hopelessly at variance with the facts. The Radical Govts. have put the cards on the table, and it was the first thing to do in any real attempt to grapple with the situation.

I remember telling you, soon after the dollar loan had been negotiated in the Spring of last year and the franc had risen from 25 to the dollar to 15 or even better, that I didn’t believe any lasting good was going to come of the operation, which was a coup de bourse on a huge scale and not in the least a lasting redressement.“Recovery.” If at that time a determined attempt had been made to fund the foreign debt and really to balance the budget—not on paper by increasing the floating debt—debt to the banks—something might quite well have been done. But Poincaré and LasteyrieDuring Poincaré’s second ministry (January 15, 1922–March 29, 1924), Charles de Lasteyrie (1877–1936) was minister of finance. never believed in budgetary sincerity, and thought that if they went on saying that the franc would eventually go back to pre-war parity the French would go on believing it. And the French did go on believing it longer than anyone conversant with the situation expected, but they’ve ceased to believe it now, and what the upshot of it all is going to be God knows. I can’t bear the idea that the French middle class investor, the rentier,“One who receives income derived from rents or annuities.” is going to be wiped out of economic existence, for the world in general and I in particular owe more of profit and delight to that class than I could set down in a year, but in every country where financial reconstruction has been achieved after the situation had got out of hand, the remedy has been invariably provided in the same way: reduction of internal debt by inflation and depreciation. I hope with all my heart that the process may be arrested in France before the rentier is destroyed, but it will require a strong policy and continuity to do so. The danger is that as soon as any Govt. proclaims its intention of taking the unpopular action that is indispensable it will be turned out of power by rivals who tell the country that they know how to achieve the same results without imposing the sacrifices—and nothing could be worse than a series of short-lived Govts. If CaillauxJoseph-Marie-Auguste Caillaux (1863–1944), a French politician and leader of the Radicals. Caillaux served at various times in the left wing governments of the 1920s. could be given full powers for three years I don’t see why he shouldn’t do the trick—he or another. But the chances are that he’ll be upset. The future is pretty gloomy. I don’t believe France will go under in Bolshevism, but the greatest strength of the country has for long centuries been the bourgeoisie, the small propertied class, and though they are so deeply rooted and own so much real estate and various forms of wealth that they can’t be destroyed and will, I think, emerge once again, their moderating influence is sure to deteriorate in strength and quality if they are bled of all their wealth at present held in Govt. bonds—and that is what inflation totally means.For the monetary crisis in France in the 1920s, see Kenneth Mouré, The Gold Standard Illusion: France, The Bank of France, and The International Gold Standard, 1914–1939 (Oxford: Oxford University Press, 2002), especially ch. 4 (“The Franc in Peril, 1924–1926”), 71–100.

Here’s a fearfully long letter, dearest Mildred. But you brought it on yourself by imprudently asking me such a question.

I was dreadfully sorry Bill missed you.See letter of May 3, 1925. His address is: Moreton, Harrow-on-the-Hill. He is very happy and doing well. I’m much pleased with the air that he brings back from Harrow—at bottom it is better for a boy with real stuff in him than Eton,Eton College, a British independent boys school located near Windsor. I believe. You’ll laugh at this, I know.

I’d dearly love to come to Stockholm, but I fear can’t dream of it. I hope to get away to Antigny sometime for a couple of weeks before the Assembly.

With much love, dearest Mildred.

Always yours
R. T.

Associated People: William Royall Tyler