The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1866-03-13
Paper Money and the Suspension of
Cash Payments Deprecatedby
the Great Financier.
pluran''ty of Banks a "Real
MI. sfortune."
" The Bank Of Enslsn. 'r'a'S 'o''o" 'p''"'
lators and lctsh a Crisis
go.

he Superior Council of CommerI@ In Ffa> .
y the inquiry into 'lhe principles and gen M
CHI regulate monetary and paper circulation, 80" a.
knitted the grave error of not publishing day ny
3eailed report of the evidence given before IT, aHe
ostensibe object OF its mission was TO enligheD the
kmercial public on those matters, respecting which
kiderabe ignorance prevails. Even now, though the
stigaton is concluded or at least suspended the
mony remains unpublished, and in all probability il
not be issued for months TO come. We have, how
y. been able TO obtain copies OF some of the more
ortant dcpositions aud from them we translate that
Baron James de Rothschild of Paris, which is doubly
bortant on account of his being the acknowledged
y of the banking interest in France -
)1pN j. DE RoTHsoHILD on BANKS AND CURRENCY.
ze President IN RouheT).-You have in your hand
J Ust Of questions. We do not ask you to follow the
established therein; but we beg OF you to tell US
9cpinion on the different matters which the financial
D scusses, and u the solution OF which your at
Non has necessarily been TUNED.
karon DE ROTHs nIID-I have obeyed your orders in
ing here; but must confess that, having been ILL.,
<, not been able to study the questions presented in
programme you were kind enough TO address TO me.
til, however, endeavor TO reply as well as can to
la you ask, and IN doing so, will take advantage OF
| financial experience ! have been able 70 obtain. As
myself see only ono thing, and that thing has been
object of all my lue-to eide7tr 70 MAINTAIN NE
kgk and TO prebent the necessity Q having re-
.yr TO paper ~ neg, or raher ne sas-
ptn Of cash pry,aeaS. / have followed dur
imany years tie situation OF the BANK,
Il has always or atty interested me re-
Der in my youth, fifty years ago. Lord Liver
feeling anxiety about the critical situation in which
Bank of England stood sent FOR my brother; ana
npanied nm The Bank Of England was then n
"A every minute of being obliged TO suspend cash
ments. | then witness d all the disquietudc oc
oned throughout all England by that position Ger
~ the Bank has changed since, and confidence has
tally returned TO IT. but believe that II was on
,unt of the aTprehensons then created that all the
with which thai great institution H., as YOU
W, surrounded, were taken. The system 70 which
Robert Peel has subjected the Bank of England has
approved by everybody, in spite of few de-
and II Is from tho fear Of seeing renewed the
,rs Of the situation 20 whch refer. have looked
the questions you propose relative TO the Bank
ance, and two OF them have struck me- One
ON is as to whether the capital of the Bank ought
augmented, the other as 10 the crisis which is said
ist As Do the crisis. do not oeepc-T ask your par
gentlemen, for speaking so frdnhy-'hd tters is
Ny opinion Is that the farther advance the far
& ishall get from vcritablc crises; for so much
q hches US from all countries, that by the aid Of
Re we shall not again have, hope, TO undergo
1--we have passed through. We see at present
a tdant gold and silver still are in the Bank OF
n but do the less consider that the aus nenia
q Alerest by tho Bank was absolutely necessary.
Rt to say that high interest ~ advantageous
Afers hankers-no for if they get a little more
est for their money, they lose in another May-in
A. In the public funds, in everything. Bnt the rails
{ the rate OF interest is necessity, and Is com
led when it takes place in other markets, for asNas
city said just now, money seeks interest II
Interest OF money be very !high anywhere, bankers
III persons who have money send where II Is high
fhat happensi II Is withdrawn from the Bank Of
lc and the bank is then embarrassed. There are
unity specuations In goods, and there also
others in the public funds. My opinion Is that
81 raised to a certain rate makes many spectators
4 their specnatons In goods, and INDUCES ihsm TO
nj to terminate their operations in order 20 be able
'ertake new ones. II everybody could INA con
cilIties for procuring money, and for continuing
atoms indefinitely, there Is no say ne 90 what
might be exposed. / shall be very happy,
IN, to reply to any questions that may he put
nd to which may be capable of giving soln-
bad ar nv mi. % IA 4 ~
I reply that ia my opinion IL has all that Is
,ry AS TO tho idea Of making Il invest its money
ign securities, that would be, in my opinion,
ayest fault IL could commit. Such q measure
be a constant menace 10 foreign banks, and
Of serious dsquetude and distrust. IT, for cx-
the Bank OF France had ~ liz porto Ito GO 900 900
hg, IL might at n given moment throw them on the
,t, and produce great perturbation IN commerce
senco Of that eventually, If the rarity OF money
cit by the Bank of England, aud II were forced 10
IS rate OF discount IL would have TO raise II higher
pre rapidly than It would have done II that cir
huce had not existed In another point Of view
Iteration OF the Bank would not create now re-
4 aud IL II were 10 produce continuously an aug
lon of paper on London or France, there would be
antage In that. Besides, the effect created by the
don OF that paper would only be temporary A
all in exchanges not ogimzcd by the real state Of
rco would only. exercise n momentary influence,
deceive the public and bring on sudden reaction
ctses Tee is alloys great unkuowl--that Il 10
ere q aIpuys distryr Than rr0hfv Distrust
aOt 10 DO excited by putting forward Certain IDEAS
important Is 10 preserve the union between the
Iente were sold in order TO get moro foreign bills
fault would be committed.
iDESr-You have intimated your views most OF
item questions Nevertheless, account OF the
BE importance Of your opinion, and OF your great
nce, ] think II useful TO refer to certain points
t Of ALL DO you think that the plurality Of bar Ks
, 10 better than a single bankf
pr RorHscmD-7hs plurality q ednks oould Be
ifymture
pfsr-I though, that tina, WIS your opinion bu,
Unnecessary to make II precise
DR. RornscunD-I never dIssmula,c my opinion
hat think.
IcuE1 CHEvAIiEs-Then you think that Scotland
lost unhappy land on ear,hr
\ px RoruacrttD-NO comparison be mad e
Scotland and France. Ranks In Scotland arc
early what our bankers are herc--noither more
3 Averltahlo bank Is the Bank OF England; u
II that oiaanatc, 50 to speak, all little bank.
70 q great many little banks In Scotland which
} US and ask US 10 act for them. ] then inquire
credit that can he accorded TO them. Have
act In that way with the Bank Of Englandf Would
iblish here dozen banksf Woud you permit
make issues Of notes. If so, where would be
lceS Suppose that ! am at the head OF little
iich has little money, and that desired 10 gain
cal should take no precautons--I should say
tgdtTri for some other bank would be Obliged
to help me That is what all the little banks
yht be established would do; they would turn
yards towards the Bank Of France as towards q
charged to pay for Their folies. And then
ONE The need Of large sums which would be
means OF bringing on a CT SIS in France.
cHEL CnEvAtiER---I had tho honor 10 ask you,
Z It did not result from what You sad that Scot
nc most unfortunate country IN the world. You
4int the difference was very great between tho
England and the banks o. Scotland; that VIC
draw from their example the conclusion that we
20 twenty banks at Paris, as those tw niy banks
vo rise 90 abuses. ! demand tho permission no,
no tho question TO what would happen al
there were twenty banks, because desire "a
n e train OF my thoughts, which " on The banks
nnd DO you not think that on organization
A In the United Kingdom, where ono secs the
T scotland working perfectly, though hay
70 them the Bank OF England, would con
placing In each province a bank possess
certain number Of branches, and allow
BE tho Bank OF France, II which ! hay
ono demand the supprcsslon--do you not be
such an organization would produce very ad
lus resulisf II that organization gives 70 scot
England the most satisfactory results, u " %
hat that organization OF credit was one OF th'
Ing causes Of the exceptional prosperity which
enioys though d r. situated under she most q =
climate and has the poorest soil IN the world
rot conclude That there would be no temerity u
o import into FRANCE an organization ROUNDED
mo basis
10 RorascuLp--I say, first Of all, as to branches
them. The Bank OF fmnce has estabushec
tho provinces wherever tho necessity for then
add that wo are IN perfectly different situa
nat OF England. We must take all possible
AZ with respect 90 credit We are much
anced than tho English in this respect
,ars ACC you could not havotravelled IN France
* nois-po que would haya received u or have