The Stourbridge Observer, Cradley Heath, Halesowen & District Chronicle.
Stourbridge, West Midlands, England, 1872-10-19 00:00:00

"MUTUAL ACCOMMODATION!'

The Daily Telegraph thus disposes of the tumour that the
Butt of Ef.gland had Wen wishful to borrow gold from the
Bank of France :
Some years ago there appeared in Punch anadmirable
cartoon, hitting off with most felicitous accuracy the
greatest financial event of that day—a loan of silver
which the Bank of England made to the Bank of
France. "Madame la Banque' and the "Old Lady
of Threaeneedle-street were yis-a via. The one wag
a tidy, stately, well arranged dame of the old school
with a bonnet of unimpeachable fashion, a capital silk
dress, and a smart reticule over her arm, dignified and
courteons, hut with all her wits about her. The
other was a comfortable, thrifty-looking old crea-
ture, habited in a stout linsey-woolsey—something
for use rather than for show. She wore, also, a
poke bonnet of ntterlyobsolete style, and carried a sub-
stantial basket from which she had just taken an old
stocking well stuffed with the coinage of the realm. It
was a else of mutual accommodation." Madame
wanted to borrow a little silver and the careful but
kindly City dame was handing over some of the precious
metal from her ample savings. The sketch represented
a real but unusual transaction. The Bank uf France
found it convenient to borrow an immediate supply of
specie, though at an actual loss to itself, rather than
wait for the slow operation of the economic law
whiah would have set silver flowing towards
the point that presented a sufficient attraction.
Oddly enough, rumours of a similar arrange-
ment, with the positions reversed, have been
current in Paris within the last day Sr two, and
the Scalding Firlalleioe alluded to them en Saturday.
It has been stated that the Bank of England wanted to
borrow gold to the value of 100,000.000 francs from the
Bank of Erance, to meet the heavy demands which
are likely to be made in connection with the payments
to Germany. Our contemporary thinks that nothing
has been decided, but adds that the Bank of France
could easily render assistance if needed. It is singular
that such a report should have obtained currency,
and probably it is founded cn some international ex-
change transaction which the subscriptions to the
French Loan and the paymenta to Germany involve;
but the most remarkable thing is that it should he pos-
sible for France, stargering undsr such enormous lia-
bilities, to " assist " England by hard cash in any
shape. The explanation, of course, is that the Bank of
France, not being under any obligation to redeem its
notes, con board specie with comparative ease, and
hence it IMP stow—about thirty-one millions sterling of
theprecious metals, while the Bank of England has only
twenty. But the Parisians are mistaken if they think
that, !ri order to get gold, the Bank of England need resort
to so improvident a course as borrowing from the Bank
of 1 ranee something like four millions sterling.

We are not in debt to France or any other country;
we lend not borrow and we have large sums to rec iive
which we can call in when we please. If the Bank
of England has allowed its stock of gold to run
too low, it can do one of several things. It can
sell its securities in the open market or borrow
on them; it can raise the rate of discount, and
so attract money to London, to be lent out, or in-
vested, or devoted to purchasing those commodities
which "dear "money tends to make cheaper. Theme
are the well ascertained remedies; they are now par-
tially in operation, and the result will soon be seen.
When they are found to fail, it will be time enough to
reverHe the former transaction between " Madame La
Banque" and the "Old Lady "—not sooner.