The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1866-03-21
BANKS AND CURRENCY ABROAD.


Of Monetary Affairs.
An imperial commission having some time
since assembled in Paris for the purpose Of elicit
ing news from prominent bankers in regard to
the state OF the finances, and especially in re-
gard to the status of the Banks Of France and
England, Baron James de Rothschid was called
upon TO give his opinions about European
finances. The following is the latest report OF
the examination, which was still progressing on
the 9th inst. =
President-Bo you think there has been a little
excess either because the resources Of the coun-
try, created by labor and economy, have not
been IN proportion with the expenditure, or be-
cause the circulation Of money has been such in
Europe that the long time II takes to return has
been out OF proportion to the issue of paper; that
there have been issues remaining unpaid owing
to a delay in the return of specie?
Is there not a loss of specie almost absolute
for Europe with regard to the extreme East,
loss which has been compensated by the dis
Covery OF gold in Australia?
Baron de Rothschld--It is precisely those dis
coverles which come to our reief Bat for them,
we should not have been able to do what we
have done. There has been a substitution OF
Australian gold, new or native gold, in place OF
the specie we have sent to China, or to India,
and which Will be long before it returns, II 1t
ever does return.
Presidential time may come, perhaps, when
those countries will have q monetary circula'
ton, and will be able TO effect exchanges with
us, AT present we pay them In specie; 1T is to
be hoped that some day VIC shall pay them In
merchandise.
hoped; for there was moment when trembed
for Crisis in Germany, because silver had dis
appeared. 30 much had been bought to send to
China and India; 1t had become so scarce at
Hamburg, Frankfort, and many other towns OF
Germany where silver is the only circulating
medium, as in China and India, that we knew
not what to do. Silver was for time at from
80 francs to 40 francs premium per mile.
President-Do yoH think that the embarraSs-
ments we have felt may not have been caused
by the investments OF French capital in foreign
securities?
Baron de Rothschild-That question must be
examined in two points of Yiew--as regards
securities which are good, and as regards those
which cannot inspire the same confidence.
Thus, with respect to foreign securities, should
not consider them all as identical. l will take
Naples, for instance. do not speak of the
kingdom Of Italy, but of that of the two Sicilies.
We have ssued many loans for the two Sicilies.
When the Government suppressed rentes to
bearer, we created certificates to replace them,
in order to render the negotiation easier in
France and abroad. When, recently, the Italian
Government ordered the conversion Of all the
debts OF the different States, it turned out that
nearly all the securities had returned to Italy.
/ do not think, however, the same would happen
with all sorts of securities.
President-There are among foreign securities,
as among those at home, both good and bad, and
investment in bad securities is loss of capital
very disadvsntageous for the country which
makes it; but investments abroad, even in good
securities, may, by the tension of credit result
ing tberelrom, create monentary embarrass-
ments. Very good operations may be made with
Italy or Germany, but they will necessitate the
employment of a large capital which no doubt
returns some day, but the expectation of which
may lead, between the moment when the capital
is employed and that when it Will be reproduc-
tive to time OF suspension and suffering for
the country making the investments.
a. T.A1, u -
mentary. What is wanted? Commerce, bus-
ness. We cannot keep ourselves absolutely to
ourselves; we must traffic, we must do Business.
II we resolved in France to have nothing to do
with foreign securities, what would become OF
us? France weHld be isolated.
President-Do you think that the corrective Of
these foreign Investments loans, railways, ETC.,
is to found in commercial operations heeselveB,
and that, for instance, nation which borrows
in the French market 800, 600, 900 or 400 000 000
does not withdraw them entirely, but employs q
part to pay for goods bought there?
Baron de Rothschild-Yes. SeVen.eighths or
ffteen.sixteenths are employed in buying goods
locomotives for instance; it is impossible to
say how many we send abroad. l speak from
experience.
President-Thus, you think that the operations
of France with foreign countries are not paid
entirely with specie, but chiefly with merchan-
disc. You also think that in q rather short space
of time, foreign securities. at a given moment,
return to the natives of the country, as yoR have
seen in the case of the NeapolItan loans?
Baron de Rothschild-Yes. The same thing
occurs for Spanish loans contracted abroad.
Flve.siXths of them return to Spain.
President-What do you think of the selling
of foreign securities at the Paris Bourse? That
is the object of question No. IL. Are you OF
opinion that such should be lett entirely Free or
that it should be subject to Government regula-
1ion?
Baron de Rothschild-I am of opinion that it
should be lett completely free there is no con-
Venience in such course. The more you leave
capitalists to themselves, the better 1t is for
business. Good securities remain; the bad dis
appear. Thus, the Government has granted the
favor OF being quoted to many foreign securities.
Well, observe the lists, and you will see that
there are many of those securities which are
now quoted. The best way in this matter is to
allow capitalists to do as they please. Foreign
Governments attach Importance to having their
securities sold at Paris; but, in France, very
little money IS invested in then.
PreEident-YoU believe, then, that the quota.
tion of foreign securities under the authorize.
tion of the Government is useless!
Baron de Rothschild-Yes.
President-That 1t should be left to the Com.
mittee Of the Stock brokers?
Baron de Rothschid-I could wish that the
brokers were, so to speak, obliged to quote
such securities. They ought not to be al.
lowed the right of deciding on the matter,
because that would make them masters of the
situation.
President-In England, it is the committee OF
the brokers who regulate such things,
Baron de Rothschild-I believe it would be
better to leave people to do what they like.
President-Complete libertyY
Baron de Rothschild-Yes, Mr.. President,
President-Whioh would be checked by the
responsibility of those who use it?
Baron de Rothschild-In business, the greater
the liberty the better it is.
M. Michel Cheyaller-Baron de Rothschild