The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1866-03-24
Currency and Finance-The Financial
Centre of the WoIld-BarOn ROths-
chIld's Evidence.

u lew ud1S uSO bDe ulB0ly INTEREST
ing examination of Baron j. de Rothschlld by the
Superior Council OF Commerce at Paris, on 'the
principles and general facts which regulate
monetary and paper circulation" The well
known character and position OF this grea
iDancler give much weight to his testimony
The President OF that import mt bcdy before
which he testified, NJ. Rouher, seemed to fully
appreciate this when he said to M. Roths
child, son account of the extreme i'm.
portance OF your opinions, and of your
great experience, think it useful to refer
to certain points" And again, at is therefore,
not for us that you speak, but for the public,
who will read the documents we shall publish.
You must understand the Importance we ascribe
to opinions expressed by, such an imposing
authority as you are on such matters.
The subject that chiefly engaged the attention
OF the Council, and about whicn they inquired
Of M. Rothschild, was as to the position and
principles OF management OF the Banks OF
France and Eng and and their power over the
trade and financial affairs OF the world. The
object appears to have been TO ascertain how
far the Bank Of France could extend its power
and usefulness, both in the empire and through
out the world, by any modification OF its pre-
sent system The Council seemed particularly
desirous OF knowing to what extent it could be
made to rival the influence or take the place of
the Bank OF England. This led to comparison
OF the two great national institutions their
systems and tner influence, and elected much
valuable information, not only for the people of
Europe, but for the whole world. We espe
cially may lea1n good deal that is useful Just
at this time, wien we are passing through a
uighty financial revolution, and wnen mems
ideas here are 30 vague and unsettled upon the
| subject.
That which should attract our attention most
is the controlling power oil these great national
| banking institutions, and particularly OF the
Bank OF England, over the trade, commerce,
| and financial conditions and operations of the
world. By studying this we may adopt prlnci-
pies that are applicable to our own situation, so
| as 10 give us that high standing in monetary
| Affairs to which Our wealth, resources, geo.
graphical position, and the greatness of the coun-
| try eDtitle US.
Baron Rothschild does not hesitate to say to
! the French Superior Council OF Commerce that
'the Bank OF England leads all the other banks
| ol Europe. When money is seen to be rare in
| England people open their eyes, not only at
| Paris, but at st. Petersburg, and everywhere,
| The situation is quite different from ours. The
measures taken by the Bank of France do not
| produce the same effect abroad as those taken
| by the Bank OF England In another part of
| his evidence he says:-"A vertable bank is
the Bank of England; 1t is from it that ema-
nate, so to speak, all little banks.n Contem-
| plating the immense power of this institution,
which makes London the money centre of the
! world, we are naturally led to inquire the cause
| How has this state OF things arisen, and how is
| 1t maintained?
1t does not come within the scope of this
article to investigate the history Of the Bank of
England, or all the causes that have led sue
cesslvey to its present powerful position; nor is
il necessary. We refer, howeyer in another
part of the PAPER TO some OF its strugg es in
those trying periods when efforts were made to
return to specie payments There are a few
general principles that have operated TO pro-
duce the result. and which must govern in All
such cases. These we shall notice. The
strength of this institution Les primarily in its
connection with the Government. Strictly
Speaking 1t is private corporation, or corpo-
ration OF findividuals; but the Government has
always been identified with it, and exercised u
control over its affairs, particularly in critical
times. The bank, at the same time, has paid
attention to the wishes and necessities of the
| Government.
They have mutually aided and sustained each
other tcr the public good. This, however, has
been less through positive or express laws, or
through provisions in the charter, than from
mutual interest and selEpreservaton. The rela-
tons OF the bank to the Government are based
upon the principles OF necessity and convenience
more than upon an express formal compact, or
any direct right to claim support on one hand or
control On the other. Like the binding force OF
the British Constitut on upon the people, these
obligations between the bank ard theHovernment
are based upon fundamental principles of what
is just and proper more than upon any written
compact. Both ioIm beautiful system of
checks and balances which are tacitlY acknow.
ledged and submitted to for the welfare of the
coun try.
But though the bank has this connection with
and support from the Government it is not like
the 90 Unled states Bank, or what our present
national banks may be-a dangerous political
mach 1t comes to the rescue of the Govern
ment in times of war, or of any great crisis but
1t does not exercise power IN the political affairs
Of the country, nor is it dangerous to the liber-
ties Of the people. Like child IRON IT'S birth,
II has grown up through long period of years
and succession of encounters with the storms
oil life to be giant in strength. 1t mas prodted
by experience, and the statesmen of England
have assisted in maturing its growth. 1t has
parsed through many severe ordeals, especially
DUNG and after the wars with Napoleon, and
when spasmodic efforts were made to force
specie payments; but since the act of Sir Robert
Peel in 1874, 1t has stood upon more impreg-
nable foundation. II regulates the currency of
| Great Britain, public credit, the exchanges OF
the world, and, in great measure the opera
tiCns OF commerce. When speculation is rife
and danger is eomlng it 'puts do own the brakes
as was said in the Superior Council of Com
merce and when 1t is safe TO go on again it lifts
| them up; that is, In other words, ii contracts
! and expands and raises and lowers the rate of
| discount according to circumstances. Such is
| the great, sale, and politically harmless power
OF the Bank OF Eneland-a power which is felt
throughout the civilized world
| Now, what is the instruction we may draw
| from this? To regulate our financial system,
| our banks and the currency upon equally sound
| principles. The same system may not suit our
condition precisely but the general principles
are quite as applicable. Let us have some great
and similar controlling institution in the United
| States, and at the commercial metropolis. II
Goes not matter what 1t may be called-a Board
OF Control OF the Currency, a Commission. a
Bureau, or ANYTHING else. We do not mean an
| establishment Ike the old United States Bank
> nor The so-oalled national banks-nothing that