Star.
London, England, 1824-09-22 00:00:00

I

•

M. LAF/ITE ON THE. REOUCTION OF THE
RENTES.
M.Lafitte, the Paris banker; has just published a
pamphlet on the late project of the French M:nkter of
Finance for the reduction of the Government Annuities
in France. As M. Lafitte was one of the contractors
for enabling that Minister to carry into execution his
great financial plan, and belongs, moreover, to the Li--I
beral party, by whom it was opposed, he was bound to
spew that his political opinions coincided with hjspeeu-
niary interests—that, for nose, his party-friends were in
the wrong, and the Cabinet in the right—and that, in
%tenet otkly offering to pocket some millions of francs of
the public money in the shape of commission, he was
oferring a favour on France as well as on himself.
Ilk new ally, M. de Villele, by his manoeuvres at the
late election, had deprived him of his seat in the Cham-
ber of Deputies, where he could have defended the new
scaheme. Ile therefore conceived himself obliged to ad-
dress the Public from the press, and the present pam-
phlet is the fruit of that supposed necessity.
As in the very few remarks which our space will
allow us to make on this pamphlet, we shall dissent
from some of M. Lafitte's doctrines, we must begin by
stating that, in our opinion, the author is a very clever
person, who has written a very clever dissertation, but
that his mind k more conversant with details than prin-
ciples, and that his powers of reasoning are much more
active than vigorous or well-directed. It may be ques-
tioned, however, whether many of the London or Paris
bankers could have produced, on any similar occasion,
such a mass of know ledge on a financial question—
could have tnethodixed that knowledge so well, and
conveyed it to the Public in such correct and appro-
priate language. If we look back to our late discus.
sions in England, on the much more important and in-
teresting question of the currency, we shall scarcely find
an example of a practical man publishing so compre-
heroive, so sensible, and so well-written a treatise.
The wito:e sulject, so far as the policy or justice of
the Ministerial project was concerned, may be resolved
into the following questions:
1. Had the Government a right to reduce the interest en giving
the annuitant an option of reduction of annuity or repayment
of principfl? • •
2. Was the exercise of this right too rigorous en the &ate
annuitants?
a. Was the interest of money really below five per cent?
4. Was the appropriation or reduction of the Sinking Fund pre-
ferable to a reduction of interest?
5. Was not the mode of carrying through the measure the only
one possible?
In answering these questions, M. Lafitte maintains
that the right of reduction or repayment existed; that
its exercise in the specific case was just; that the inte-
rest of money had fallen below five per cent.—that it
would have been impolitic to have interfered with the
sinking-fund in lieu of reducing the interest ; and that
the Minister proposed to execute this politic reduction
in the only way prudent or possible. On at least three
of these points the opponents of the Ministerial project
are at issue with our author.. They deny that the in-
terest of money had fallen generally so low in France
as to admit the Government borrowing at 4 per cent.
they therefore objected to the attempt of compelling the
creditors who lent tl:eir money at five per cent. to accept
of four, by bringing against them a conspiracy of the
great bankers of Europe; and they give good reason
for believing, that though a 'eduction of interest to a
certain extent was wise, expedient, and practicable, a
plan of attaining that end by which additional stock
was created, was neither the only possible nor the most
prudent mode of proceeding. French writers on finance,
and particularly M.Lafitte, evince gstrong partiality for
the principles established, and the practice pursued, in
England,respecting the management and reduction ofour
public debt. But where did they ever find that a Finance
Minister of England proposed to reduce a five per cent.
stock to a four, when the former had only arrived at
par for a month or two before, and had not passed it
mere than live or six per cent.? Least of all, where did
they ever find that an English Minister proposed to re-
duce a five per cent. stock in the above circumstances--
not to a four, but to a three—by adding a fourth to the
nominal debt, which in a short time the nation might
have to redeem at pat ? If M. de Villele and his col-
leagues bad possessed patience enough to wait for an-
other year, and had in the interval conducted the affairs
intrusted to their management in such a manner as to in-
spire confidence in the continuance of peace—to encou-
rage national industry—and to increase public credit,
*bete can be little doubt that the five per cents. would
have attained the tate of 115 or 120 per cent. Then would
have been the time to have proposed a reduction of in-
te estor a repayment of capital; and that reduction could
have been effected from five to four per cent. without,
on the one hand, the bribe of an augmented capital, or
on the other the overwhelming force of a European com-
bination of bankers and speculators. The rise of five or

six per cent. above par, and that only a month or two be-1
fore the proposed operation,was not such an indication of
public credit in France, as warranted a reduction of in•
terest fl om five to four. It is not at all improbable, that if
both Chambers had supported the Ministerial scheme,
and if the annuitants had had only theoption of accepting
of a reduced interest, or of being repaid their principal,
that they must have adopted the former alternative.
—lt appeared from the accounts laid before the Legit.
Mute, and the speeches of Opposition members, that
the great body of French fundholders is composed of
persons of very moderate means of living, who, having
retired from business, being unacquainted with trade,
or residing in the provinces, could find no other safe,
convenient, and profitable investment for their money
than in Government Securities. Such persons would
rather accept of a disproportionate interest (within cer-
tain limits), than a repayment of their small capitals,
of which they could make no immediate use. A com-
bination of great bankers, who could bring funds from
all the Government Secutities of Europe, to buy up the
portion of retries belonging to this tiny race of fund-
holders, would be sufficient to make them agree to any!
terms. Nothing more is requited to shew the incon-
sistency of M. Lafitte's reasoning in support of the jus-1
ti:e of this measure, than the approximation of the two
toliowing assertions: " Laciest in Paris, and in all the
great towns of France, is between *and four per cent,"
It was necessary for this peat operation, to harm a
combination of Ft ench and European Bankers." If in-
terest is at this rate, and Government enjoys the credit
of a private person, surely it was not necessary to bring
a host of European speculators to compel the French
annuitants to accept of such equitable terms, under'
pain of being paid their money, and seeing their names
erased from the Great Bunk.
The benefits which M. Laritte anticipated from the
oparati.nr seems to be as chimerical as the scheme itself
(to say the least of it) was premature. " To render
general," says lee, " the muyement of industry, and the

abundanee of capital which are observable on some
points of France, a reduction of the retries was a power-
ful means. It world have caused a fall in the interest
of money in our provinces—it would have caused capi-
tal to be transported thither ;.and, by the aid of capital,
would have farmed new means of communication, es 6
tablished works of industry, excited labour, and rendered
available all the population and all the surface of France."
Now it is almost needless to say, in answer to this
reasoning, that it is the reduction of interest arising from
the abundance of capital in a country, and other causes,
which enables Government to borrow at a low rate, and
not the borrowing of Government at a low rate which
reduces interest. The effect is here mistaken for the
cause the very ground on which M. Lafitte tests the
justice of the proposed measure was, that the interest of
money generally in France was below 4 per cent. and
that consequently the Government 5 per cents,. had
risen above par. Had they risen to 125 instead of 105,
then the income accruing from an investment in them
would be exactly 4 per cent. and such a natural rise
in the funds would have driven capital to the pro-
vinces as effectually as a reduction of interest. Bank
Stock, for instance, in England is nominally now 8 per
cent. but it is almost superfluous to mention, that
any person purchasing that kind of stock would have to
pay for it just so much as would place the interest de-
rivable from his money so invested en a level with that
derivable from the same amount vested in other funds.l
—By M. Lafitte's mode of reasoning, the change of our
4 per Cents. to 3}, in the present year, has been the
cause, and not the consequence, of the reduced rate of
interest at which money on good security may now be
borrowed. The same kind of auss er may be given to
the following statement, which completes the eulogiutn
of the new measure:—" In considering the State of our
finances, the proposed scheme had other advantages. It
perfected our system of credit, by adding to it the sys-
tern- of reductions: it diminished the exorbitant price
which we give ; for the use of foreign capital scarcely
paid at home three and a half per Cent. but paid with
us five: it limited credit without attacking it; settled
it on the best basis—that of confidence instead of high
price; and obliged capitals to require more conduct
on the part of Government by receiving less interest.
In considering it, finally, in a political point of view,
it assured the peace of Europe by engaging France
not to make war for several years. It offered, then, ge•
neral and relative utility : it was a real advance in
French civilization—a step made in the career in which
England has gone before the world, and in which nations
must follow her to find prosperity, light, arid liberty."
With the omission of the latter sentence, which seems
little else but words, the advantages mentioned in the
above passage are as shadowy as the expectation that
the new measure would have driven capital into the
provinces. M. Lafitte here places him,elf in a dilemma
from which it is difficult to escape. Either the French
funds were so much above par as to warrant a reduction
of the interest without injustice, and then that interest was
already so effectually reduced to persons who wished to
buy into them as to induce them to look out for other
means of investment, or they had so lately arrived at
par, and had risen so little above it, that it was unjast
to attempt an immediate reduction of the interest.
M. Lafitte, though a perfect Frenchmen, and a per-
fect Parisian, does justice and more than justice to
our English system of finance when he ascribes to it
the activity and extent of our external commerce--
-the greatness of our internal traffic—the creatisu of
so many lines of water communication—the- Wealth of
our manufacturers, and all the wonders of one national
prosperity. Though he has a considerable knowledge
of our commercial and financial position, we are afraid
that in the warmth of his feelings towards English li-
berty, or the excess of his admiration for English loans,
contracts, and compound interest, he is sometimes apt
to be credulous respecting us and our wealth. For in-
stance, he informs his countrymen that the Bank of Eng-
land, besides the coin which it has thrown into circula-
tion, has twenty millions of gold in its coffers. If this
is the case, the Bank Directors ought to be cashiered,
for condemning to unproductive repose so much of the
property of their constituents, and becoming the idle
sentinels, instead of being the active managers, of their
immense treasures.—Moreing paper.

1,

However, on Tuesday morning, the King said, "WO
not die before Thursday." . ;
Thi disorder was hotrible. *ll the pains Went Its then
belly and stomach. For above two months he had not
been able to hold up his bead ;.it fell upon his break.
The upper part of hisgloins were nearly paralysed, the
vertebral muscles were wholly relaxed. Up to the mo-
ment when these new evils attacked him, his stomach
had very well digested a greatnumber of aliments, but
that organ ceased its functions as soon as the upper part
of the body doubled upon itself. M. Portal, his Ma.
jesty's first physician, said. -according to his usual -form
of speich, " If the King could resolve to eat lying doyen,
and to live lying •clown, he would still reign a long
time." " How could you have me reign in bed ?"
Among his servants there was one named Usquinet,
or Lusquenet, to whom he was much attached, and
from whom he has received considerable advantage.
No other person was so dexterous in assisting him, to
change his position in his bed. The King said to the
Count d'Artois, " I almost regret that
...kw are so active;
I would recommend Lusquenet to you."
The King had not wished to see the Children of
France, whatever the Journals may say : it was against
his will that they were brought to him. After they were
gone, he said, " Why did you bring those children to
me ? If they we, e fifteen years of age, the sight of
their old uncle dying, would remain impressed upon
their memory ; but at their age, my sight will make
only disagreeable impressions without any advantage tel
them, for they will forget this jast interview : it was not
worth while to make the children cry."
Monsieur came frequently to the King's bed-side.—
The day before his death, the King said to him, " Judg-
ment will soon be passed on my reign ; but whatever
may be the opinion that shall prevail, I assure you,
brother, that everything I have done has been the re-
suit of long deliberation. I may have been mistaken,
but I have not been the sport—the slave of events—
everything has been conducted and argued by me."
Profound affliction prevailed in the Tuileries. The
servants, who had so often felt the effects of their mas-
ter's impatience. sobbed aloud; the Chief Officers of the
Palace and the Priests did not quit the bed of the dying
Monarch. In the night of thk 15th, Count d'Artois re-
mained in an adjoining roods, acrd they went several
times to announce whim the death of'his brother, before
it had taken place. At length, at three minutes past
four in the morning of the 16th„ M. Portal visited the
patient, and declared that all was over. a' Go and tell
his Majesty," said the High Chamberlain; Prince
Talleyrand. At this information, the new King stashed
into the chamber where his predecessor had just breathed
his last.

The witness who has related to us all these facts • said
to us, 4, I have seen many Court tears—they would not
deceive me; but those which Charles shed were sincere.
He almost laid himself down on the bed of the deceased,
exclaiming, , And I tbo am so old l' After this bunt
of sorrow, the Prince, composing himself a little, said to
the Chamberlain, , What is to be done?' , Sire,' replied
Talleyrand, lam here to attend to these things., you
have need of repose; retire.' 6 And you too want rest,
retire." Retire, I conjure you, Sire.' The King took
the hand of his brother, kissed it, and withdrew."
The following additional partittdars are from the
Etoile of Monday : _

" Pears, Surma= IA
" The body of his Majesty Louis XVIII. has bten Plated In t
SAO= of the Throne; where the Public was admitted from ten in
the morning till six in the evening.
" It would be diMeasit to deseribe the devodon with which the
immense crowds, admitted on this day, visited the mortal remains
of his Ma. • A religious Wows prevailed from the entrance of
the grand staircase to the wicket of the Pont Royal, by Vihieh they
left the Palace.
" It is very Worthy of remark, that the numerous English Joiti-
nes, to whatever patty. they belong, agree on this point--that the
death of Louis X VIIL will not produce any kind of change in the
domestic administration or the foreign policy of trance. This con-
viction is founded oo the high esteem which all Europe fedi for the
upright, humane, and just character of King Charles X."

THE EVENING STAR.

LONDON:

WEDNESDAY, SEPTEMBER 22, 1824.
THE FUNDS.

STOCK EXCHANGE, TWELVE O'CLOCK.
Consols opened this morning at 94 to * for the Account, with
little doing.
it is reported that an Express has arrived, bringing the French
Recites 100 f. 90c. to SSc.

To-morrow will be a grand Holiday among the Jews, which will
prevent most of them from attending the Stock Exchange, in con-
sequence of which little business will be done.