The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1866-03-13
changed Il we must leave TO new habIls ,he time to

lions can be obtained with What we have II, the
contrary, we wish to create new things, TO establish
| and produce good results
rkE.nESr-Thus. then, in your opinions, the example
ID SCOTLAND Is not conclusive and you consider the banks
OF scotland TO be rather banks Of circulation than banks
of issuef
Baron DE- RorHscnnp-Completely and the proof Is
that when they have the slightest wants-and that Is
very often cause of criscsthey get money from the
Bank OF England II has been said very truly that 1t Is
he orea speations made al liverpool in cotton which
tae cause q he present crisis and a they made The Bank
Of England raise is rate Of discount The Bank of England
considers itself, and with reason, the guardian Of the
commerce al operations Of the country in general. You
will tell me that be his guardian, and that
true; but great operations produce effect
all England, the Bank gets alarmed when sees ope
ratons which may derange the entire situation When
1t sees great specuations organized or great wants OF
money TO send to Turkey or other countries from
which il does not return, it begins by rendering money
rifd far II ays"We wli not lend The hand 10 that
s sin force holders Of eonen @ , and In oderto do
place. aud the Bank OF France is affected by that situa
| ton.
PREsIDRxT-Admitting that the principle of sole bank
preferable regards circulation and the security Of
the note you consider doubt, essential condi-
ton OF The existence OF bank OF ISSUE the constant con-
vertibily of notes?
Baron DE RorMscHnO-oh, certainly That is the
fundamental condition. s~t S'@,. y,
organization Of foreign banks with the organization of
the Bank Of France which is the one among these diff
iercnt institutions, that disposed consider as
regards the good management of business as the most
perfect or the least imperfect
| -
be compared with the bank of another there are two
great differences in the situation. Thus the Bank Of
En?and IS perfectly well organized for the country in
= men II acts; and yet if you to adopt the same
ain Nations for the Bank of France that bank could
exist The Bank of England under the present of
thincs as great deal OF public funds in its TILL and
can dlsno OF them without having anything TO demand
of any one ~ odr 10 remain master Of he money mayt
whether il DO rows those funds or whether it sells
tho securities IL w.bdraws capital from the Stock Ex
change 1t causes tie rate of discount to rise, and
thereby checks tho export OF specie; but it only
vii
puidic is so well accts stoned to that state Of
things, confidence is SO great, credit q, 70 s, wei
ta oHc-eghM Tta Wttto3 ana one ,ein9 aor q;
,chreas i the sane ttirg 'rere to ecnr IN France ssey
b On ,yo I'D 1rish 10 SELL and there aUoad lie gnc WhyS
Because credit is not established here with the
sordily in England. In England there are many |
PLACID 10 tie pa,iic nd and hat tontritute 10 snc 1T
he credhff tie Sac We have not yet arrived at the
same point; the credit Of the government is better
established than formerly, but IL has not the
situation and the force which it has in England, and
the Bank Of France cannot act in he'eame manner as
the Bank OF England
PRrspEST--You consider, then that these two insti
tuons their respective Gerences respond to habits
and different Also and that to desire to establish
the Bank of England in France, or the Bank OF France
in England, would be bada
Baron pg RoTus cruLp-I do not say bad but perhaps
Of nature TO produce certain dangers. believe that
wo cannot follow IN France the same system as in
England.
NJ McafL CHEvALEe--On the other hand, do you be-
eve that in England the same line could not be followed
Baron DE RorisrrLD-I not quite capable Of an
swering the question. am not in England.
n. MicnH CnyALiEa-You are not in England but
you know England
Baron DE RoTnscmp--7fe Bank Of England lads all
he Other tanks Of Europs When money il to be
rare In Eaaiand peoic open their cyos not only at
Paris but nj 81 Petersburg, and everywhere. The stu
alton Is ute different ours. Tho taken by
the Bank OF France do not produco the effect
abroad as those taken by the Bank OF England
H. MIcusL CHEvAIIEE-Do you conclude therefore that
the organization the Bank of France not be
fully imported into England3 As you think that tho
organization OF the Bank Of England could not be trans
would be bad to initiate In England the organization Of
the Bank Of TronceY
Baron px RorH cuIp--Allow me- There are In the |
Two institutions many things that are excellent, and |
which might De use'uy carried from ono country INTO
the other; but do believe that could do here in
France what is done in England.
NJ MICHEL CnRvAnEi,-Do you see anything in the
practices the Bank OF England which might be usoully
introduced into the Bank Of Francey
Baron RornscHLp--I confess that am not abb 10
enter INTO all these details Ny son can reply TO you
more clearly on the point
PRE DENTDo you believe that three signatures ought
OF Francey
Baron DIX Rornscuup believe that IL is good
There are in France many bankers, many estab-
lishmens who accept two signatures and give the third
in consideration of petty difference they discount bills
with two signatures. Two signatures more easily
found than three but certain that the man who can
not obtain third signature Is not solvent as the one
not very severe thus mn individual draws on Rothschd
20 the order OF somebody, and IL Is said that there arc
three SIGNATURES though n reality there are only TWO
mat G& What is important for the bank is TO
give general and complete security to It's notes,
50 that every one may. accept them. Now, tho
third signature gives that security. and Is
particularly in that poin, Of view that 1t IL useful.
PErspEST-You said just now that you considered the
mechanism OF the Bank of England appropriate 10 tho
commercial manners aud habits of England the me
mercal habits and manners Of France In England the
proportion between the coin and bullion and the issues Is
predetermined In France he limit In tho issue Of notes
Is left TO the Apr citation OF the bank to Its prudence
and experience Is there, in your opinion, rule pro.ed
by custom and practice for establishing the proportion
between the and bullion and the amount OF noies
issueds How many notes do think 1t prudent for the
bank TO issue with m talc reserve OF ~
Baron RorHscHLD--A NJ that depends on the moment.
When rytning quiet the bank may give facilities TO
commerce and extend rs issucs But when IL Sc tat
speculation carried far, that money is going away,
that things taking place contrary to verabc prin.
cpcs the bank should restrict its issues and conduct Its
business with the prudence necessary for preserving It's
credit
NJ DuM.s--It puts on the brakes.
Paron DE RoTnscmID-Jrst so.
PREsiDsxT-I come TO another question 10 which you
have already partly replied Do You believe in the pos
Baron DE RorliscmLD-No; that would be very grave
fault
Baron ~ RoTHsonuD-If you FIX the discount ut four
per cent whom in England Il Is at seven or eight what
be withdrawn and sent England In order TO prevent
that and Ia the Interest OF commerce ITSELF IL neces-
reduces DISCOUNTS ! say bes des that should prefer
carry the very high and 10 continue TO discount,
money! peu eswoe al p aa s higher
According to You, nxl,y OF rate produces
restriction and suppression 81 discountsy
Baron R,TH crnD-Ycs
PRE-iDgsryariaby appears you to satisfy all the
exgences Of commercial operations
Baron DE RlTnscuLp-It cannot he done without
Look at Hamburg; the interest u 20 eight per
cent IL we were to remain at four all our money would
be carried TO Hamburg Everybody there would say, 81
can perform such opera. as wish, since 10 Is only
necessary to to pRrst get money at four per cent?
IT, ON the contrary, the persons who send TO the bank
| paper on Paris obliged instead Of getting II dis
counted at four TO pay six seven, they viii not find
Their proht In withdrawing money from the Bank Of
4 Franco to send elsewhere
lhEsinrST-Wryou tell MS your opinion about capt.
tai OF guaranto,f Prom what you said already you
consider, believe tina, the capital OF the bank ought
be guarantee capital rather than funds employed In
| busnossp
Baron de Rorrscm DC Completely. I 10 no, say how
ever that little later in n certain time the Minister OF