M Caillaux's attempt to retire between 15 and 20 billion francs of short term "defense bonds" by a 4% "gold loan" (TIME, July 6) has fallen dismally short of expectations. The 67 billion francs of outstanding short term paper has been reduced by less than 5 billion instead of 20. In the event of a panic on these securities, the Treasury and the Bank of France would almost certainly have to take refuge in inflation, which might send the franc crashing to infinitesimals.
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