The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1866-04-14

operation Of this kind But emosrassss all other
operations Of commerce and industry.
PAsrRs-in the case spoken OF this Is the ollie
renee u only bought the cotton which = necessary
small thing Egypt produces 70 500 COG bales OF
cotton, and France only consumes 600 70 49, 600 Of
them. So that II the operation be reduced TO simple
transaction OF the merchant specializing
for France alone would be Iifng and the dnerence
Sss hardly be be fs op Would s
matter little But when the exchange Is hrm that 10 70
say when the demand for cotton very active and that
money or another becomes rarer in Eng
NJ EMILE PEREIRE-permit The rate Of Interest does
indicate the abundance rarity Of money. England
buys with her productions all the silver that Is neces.
sary for her commerce with india she manages
supply you with the coin which you send Egypt she
II England has need Of cotton from India and Egypt Il
is she who pays for them since 1t is she who employs
Wsc s ans ns sss them with the h.S
that metal is produced-from M riro, fir erampts-
paying for II with her productions And she has
all coasts Of the Channel and the Atlantic she Is
buying up grain because she wants It aud have
too much; she Is carrying off all the fresh vegetables
all the poultry, all the that supply that
England Is our debtor. You cannot change that; the
exchange cannot modify that situation. We are sellers
PRnspESTI wish TO refer to what appeared to me the
important point in the observation OF NJ dEichthal 10
terst rises in England the consequence 10 this tho
French capitalist employs the securities he has dis
possible or that he can procure, in buying bills Lon
don, because he can thereby get security which gives
him seven per cent II results from that that the
capital which ought to be paid by England s retained
In France there s an Of three months on
her echednces adjournment which is determined by
the elevation of the rate Of discount and by the profit
resulting therefrom. On this point NJ Pereire and NJ
dEichtha are In accord. NJ Pereire, going further,
says when banker s in presence of such operation
and Of bills producing seven per cent he sells his deben
lures uzes his bank notes. creates resources by means
OF which he can procure that profitable paper. But NJ
dEichthal says"It is thus that the in the
country are rendered rarer You have utilized your
your securities, sold your debentures, demanded
rem wall what is the resultp As you have taken
all these resources from the Bank of France which
the denve reservoir 1t comes to pass that the Bank,
which has cooperated by means Of advances In the &C
QUESTION Of bills London finds at given moment
that there Is dsproporon between It's till and its issues;
and II IL did not raise its discount gradually 1t would be
obliged to do suddenly and by that suddenness would
disturb the quietude and derange the operations Of
merce." What have you to say to that objection, N.
Pereiref
NJ. EMILE PEREmE-If England had enormous wants,
and had not sufficient coin for her Circulation, there
might be truth In that objection because after all
commerce cannot be carried an indefinite, unlimited
scale sum of 200, ooo, ooof. 800, 600 oooE is
600 0o0, 000f Ia very different matter In
reality the extraordinary Of the kind referred
TO rarely exceed 60,0OO 000fr so, 000, O0Or The
resources which employed not all taken from
the Bank and besides as regards England France only
England raises It's discount repeat not because II has
ne coin, but because II s not permitted 10 issue enough
notes. All the question lies there The void IL made
up by delays by credit u is filled up from Paris Brus-
ses Lyons everywhere because there always evcry.
where disPosable capital II 10 necessary " win.
draw coin from the Bank Of France TO take bills Of
change There 10 In France and particularly In Paris
movement Of capital Of which people do form dea
We reason too much the TIL OF the Bank Of France tho
contents OF that till not the hundredt part OF the
dsposable capital in the country repeat that the cou
sequence Of different rate Of interest between France
and England that on the Continental Paris ut Am
sterdam, at Berlin, Antwerp Brussels and In swit.
zersnd-bankes retain English bills Of exchange Which
bring in seven per cent and greatly prefer taking them
10 accepting paper Paris at four five BIT as no
demand for bills on London 1t per cent nugme,ts
the demand for bills at long date the price ri.es and
the difference dsappears-the level 10 Is-estsbished Il
must be believed thai that England will
demand from us gold: she do H. Since she s
debtor
PREMpksT-Thus, then In your opinion the purchases
OF bills on London, attracted by high interest like that
OF seven cent covered by the dsposabe funds
Of capitalists and bankors and unless the crisis DO very
severe the reaction Of these operations does make
itself felt on the Bank Of France IN calculated
" determine an elevation Of discount
n ExI1 PEREIRK-No; and IL IL even in England that
the evil 10 corrected for the bills OF exchange London
which the elevation Of interest keeps naturally on the
Continent being presented for discount the Bank
OF England the demand for notes Declines and the eQu
lbrium u re- estabshed
PREsIDExr-N Is movement which In itself 10 satisfied
by the ordinary efforts Of capitalists, and which
new bills which produce elements Of compensation and
lquidationf
n. EMLs Pnms-That Is q very good summing up Of
my opinion.