Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1866-04-20

tain that when English commerce is a
debtor to foreign countries FOR very large
sums, an elevation of the exchange on
London is to be feared at Paris. 1t Is the
contrary that takes place If England
owes q great deal for the cotton, wool,
wheat and cattle she imports, that must
augment the number Ofhils Of exchange
drawn on her. Those bills arriving st
Paris in larger quantities must bring
down the exchange, and not make II
rise. Now, the fall Of the exchange pre-
vents the sending away of gold.
NJ. Pastre. DO you believe that the ex-
change plays the part you Indicate? For
my part, / think that the exchange IS
not at all a determining element. In
India the interest is fourteen to fifteen
per cent. The exchange indicates a very
triilinE profit; but as the discount Is at
fourteen and fifteen per cent. masses, not
Of gold, but Of silver, are sent to India.
NJ. Emile PeTeire. 1t Is not for he
purpose Of making investments that sill
yer is sent to India, but principally for
the balances In purchases Of raw mate
rials. You know very well hat when
purchases of cotton have to be made in
India or in Egypt it is not a difference Of
one or two per cent. in the interest on a
OH Oh E4ELalllEG MAAiA VIII stop oAN Al
operation. When you buy cotton at
Alexandria the complete operation Is eff
fected in three months that time being
necessary for sending, for receiving, for
realizing the affair. If there be a differ
ence Of two per cent. per annum, that Is
to say, one-half rcent. for three months
that is not of a nature tOprevent the ope-
ration. What can itmatter TO NJ. Pastre,
and to all other merchants Of Marseilles,
to bear temporarily a difference Of one
half per cent. on an operation whichthey
would not undertake if they had not a
margin of from twelve to fifteen per
cent. ? Consequently, when you take
the chance of losing or of gaining ten,
fifteen or twenty per cent, il is not one
half per cent. of a temporary augmenta-
ton of interest which will stop you. So
that the warnings referred to, and
which il is alleged must be given TO pre-
vent certain operations, warn no one
one-half per cent. cannot be obstacle to
an operation of this kind. But il en-
harnesses all other operations Of COM
merce and industry.
NJ. Pastre. In the case spoken of this
is the difference: if 1 only bought the
cotton which is necessary for me in my
ordinary operations that would be a very
1AlAhAA AAAAAASs AEt Bt NANAANCo NpSfFNN "
100000 bales of cotton, and France only
consumes $4,000 to $1,000 of them.
So that if the operation be reduced to a
simple transaction of the manufacturer
or merchant speculatingfoT France alone,
it would be trifing, and the difference
would hardly be felt. Even if $4,000 or
$1,000 other bales were to be taken for
Switzerland, 1t would still matter little.
But when Interchange is firm, that is TO
say, when the demand for cotton Is very
active, and that money flOm n cause
or another becomes rarer in England,
then the operation
NJ. Emile Pereire. Permit me. The
rate of interest does not indicate the
abundance or rarity Of money. Eng
land buys with her productions all the
silver that is necessary for her commerce
with India she even manages to sup
ply you with the coin which you send TO
Egypt; she is the great purveyor of the
precious metals-that is known. IfEng-
land has need Of cotton from India and
Egypt, it is she who pays for them, since
il is she who employs them and she
pays for them with the silver which she
mas drawn from the country in which
that metal is produced-from Mexico,
for example-paying for it with her pro-
auctions. And she has need Of other
things than cotton. At this moment, on
all our coasts of the Channel and the At
lantic, she is buying up u gr~ain-because
she wants it and we have too much she
is carrying OFF all the fresh vegetables,
all the poultry, all the oXen that we can
supply, 50 that England is our debtor.
You cannot change that; the exchange
cannot modify that situation. We are
sellers TO England.
President. l wish 10 refer 10 what ap-
peared 20 me the important point in the
observation OfM.d 'EiChthaI To NJ. PeTeire.
It has been said that when the rate of
interest rises in England the consequence
is this: the French capitalist employs
the securities ne mas dispesable or that he
can procure, in buying bills on London,
because ne can thereby get q security
which gives him eve per cent II re-
suits from that that the capital which
ought 10 be paid by England is retained
in France; there is an adjournment of
three months on her ~Ccheonces, an adj
iOurnment which is determined by the
elevation Of the rate of discount, and by
the profit resulting therefrOm. On this
point N. Pereire and NJ. d'Eichthal are
in accord. NJ Pereire, going further,
says when a banker is in presence OF such
an operation and OF bills producing 7 per
cent, he sells his debenUures, utilities his
bank notes, creates resources by means
of which he can procure that profitable
paper. But ". d'Eichthal says: at is
thus that the resources in the country are
rendered rarer. You have utilized your
money to buy bills or London you have
discounted your securities, sold your de-
bentures, demanded renewal; what is
the result? As you have taken all these
resources from the Bank of France,
which is the defnitive reservoir, il comes
to pass that the bank, which has CO.
operated by meaus of advapces In the
acquisition Of bills on London, finds at a
given moment that there is a dispropor-
ton between its till and its issues; and
if it did not raise It's discount gradually
It would be Obliged to DO so suddenly, and
by that suddenness would disturb the
quietude and derange the operations of
commerce" What have you to say TO
that objection, n. Fereirsa
NJ. Emile Pereire. IT England had
enormous wants, AMI had not sufficient
coin for her circulation, there might he
truth in thai objection, because,
after all, cOmmercs cannot be carried on
indefinite unlimited scale. A sum of
200, 600, DOOR. or 500, 900, O00f. is nothing for
France out one 800, O00, O00f. or 600, 0O0.-
000f. slavery different matter. In reality
the extraordinary investments of the
kind referred to rarely exceed so 1000, 0G0E.
or $1,000, OOOf, The resources which are
employed are not all taken from the
and besides, as regards England,
only exports gold there very ex-
ceptiOnally. The BankGf England raises
its discount, 1 repeat, not because it has
no coin, but because it is not permitted
to issue enough notes. All the question
lies there. The void is made up by de-
by credit. 1t is filled up from Paris,
BRUSSELS, Lyons, everywhere, because
is always everywhere disposal
It is not necessary to with
coin from the Bank of France to
take bills OfeXchange. There is in France, |
and particularly in Paris, a movement !
Of capital Of which people dOnot form an
idea. We reason 100 much on the till of
the Bank of France; the contents of that
till are not the hundreth part of the dis.
capital in the country. / repeat
tho consequence of a different rate
Of interest between France and England
Is that on the continental Paris, at