The New York herald., 1869-05-26

null operation. Hereup0n the st0ne wnicn tne Dull
tow to%ards rHns ss plain pa again. % silver
list Of quotations on the Vienna Bourse make n, no
mention OF this premium until May g. 1852 wnen tne
No. ammo 1883, SsVi win show the inusnce whoh the
war In Lombardy had upon the bank notes ana tne 10
1ask % vs dass
from the Finance Minister to suspend specie pay.
menis In regard to It's notes Of ten norlns ana
upwards. With reference to the small notes
cash payments mad never been restored. The new
twenty. ten and fve kreutzer pieces OF standard
since. During my ifteen months residence in Aus.
them have preserved as SO many monuments OF the
folly OF bul0nist theories. In 1890 Notwithstanding
Change, there was sucn dearsh OF It that the State
was compelled TO hasten back to the humiliating ex
pedlent OF issuing paper fractional & currency al
At The end OF the year 1859 the premium on silver
as compared with the inconvertble bank notes.
Appendix l. will show that the war Of 1859 caused
considerable, and to the industrial classes, vel
circulation, which at the end OF 1858 had amounted
to 370.500,o0o forins In round numbers had IN
creased by the last day OF 1859 to 4oS76oooo norns
In 1881 We came TO the era of the schmerling and
sham /, Ministry Herr Won pener De
then as fanatical bullionist as Mr. McCulloch has
shown himself to be-. Indeed, It seems to have been
first duties to restore specie payments and introduce
metallic currency instead Of the small notes. The
about the mighty effective, but also ruthlessly
cruel one Of contraction. This policy was t:.Ssa on
n4.es which at the end OF 1861 had amounted to
46S 423 orins, were contracted in the teeth ol
the increasing wants Of the population to Se6 62e
the end Of 1894 and reached their minimum OF s26,
600 HORNS In March, 1885. Now If the reader
how rapidly the premium sank under the procrus-
team remedies Of Herr Won Plener. The premium on
to ss1i, was pressed down by January 2, 1868, to
ia, and by July ID OF the same year TO az. Then
the sna Wsr tn e
somewhat but In 1885, the last year OF the Schles-
wig Ministry. contraction began again and the pre-,
MUM was brought down to by December Id or
that year. BY March /, 1855, when the bank note
circulation was at its lowest the premium had been
dear-bought triumphs Of the bulllonist Sisyphus
came to stop and the stone began to roll down the
important section Of my essay must refer nrst, to
the renewal Of the bank charter, and, secondly to
the effects OF this contraction policy upon the well
The terms Of the second renewal of the Bank char.
ter debated the Reichsrath In the autumn Of
1852 and the new act dates from January g. 1853 It
conceded the privilege of monopoly of issue until
December 81, 1875 1t stipulated That cash payments
to be resumed by the bank on or before the end
Of 1867 thus giving hve years. claws to the directors.
In reference to the regulation OF the note circulation
ornS 70 ne ssued Wthout Having stock of billion
to meet them; but for every note issued above that
amount the bullion must be there to meet it.. 1t fur
stipulated that the and tive horin notes were
to be Withdrawn from circulation by the end OF 1866
Lastly the bank notes were made legal tenders.
The effects OF the contraction policy OF 1868 ana
1865 and the first quarter OF 1866 were fearful Peo
pie in the provinces were reduced to state OF bar
ter Ihe construction OF railroads IN austria was lor
nue. declined. Recall to the living generation
the memory Of this period OF suffering, and, though
they know nothing OF the science OF money. they
never speak OF the time OF the great dearth OF cur
rency without shudder. So loud became the COM
plants Of the people that the government IN 1854
halted its policy but began again hoty In 1865
being determined to restore specie pay ments at all
hazards, and that long before the explry OF 1857 the
maximum term as set by the Bank Charter act or
1853 Al last even some OF the political economists
themselves began to open their eyes to the truth ana
economical publicst In Austria wrote In the Official
economical journal (the Austfa, to WIFI OF which
journal he was then the editor two elaborate arti-
cles against the ruinous policy which the govern,
ment were forcing upon the bank. and boldly laid
down the doctrine that the industrial life Of the EN-.
pire demanded supply of bank notes to the amount
OF less than 500 900 600 norns. For THIS act OF
lmprudence the government dismissed him from the
editorshlp OF the AUSTRIA. .
Is86-rnis was another epocha year in the history
sav We saw that Il was FredericR the Great Who
first forced the Austrian State to MAKE use OF It's
sovereign right OF issuing treasury notes or taxation
money. Again, 1t Is u King Of Prussia and a push
| ing, INSCRIPTIONS Prussian minister who compels
the Austrian state to resort for third time to The
use OF the aforesaid prerogative. During this year
| tne constitution OF 1851 had renamed suspended,
and Ministry OF noblemen, largely Of slavic blood
or sympatnies, and therefore little under the innu
ence OF buliionist theories ana Jewish money deal
ers, were In favor. AS the probability Of war with
Prussia began to wax into certainty nddle OF ApriD
rumors began 10 obtain currency that the govern
ment, spite OF the terms OF the Bank Charter act
OF 1863 would soon issue state notes. Accordingly,
on May g. rescrpt changing the five and one
form notes OF the privileged Austrian Bank
INTO hv the st'e Minis
try. These notes. amounting to u2 100000
norns in round numbers and the banks sum OF
tah Ar.rIJk A1 n
forns, had fallen by May to 25soOo, 900 lorlns.
The premium on silver which In March had been
the 18Th Of the same month to as, and reached is
maximum OF 80 on June 10 (see Appendix ~ On
July Il the G B9k Charter act 81 e was ionn ye sas anS
ffy form notes OF its own, partly In substitution
for the bank notes taken over and partly In compet
tion with the bank note circulation. 10 the bank
was LEFT the exclusive privilege Of issuing 10, 100
aud 1000 norin notes. and these only and the state
further engaged not to issue more Than 30O 900
OF forms OF taxation notes. The bank, on the other
hand, after the government had paid back TO II the
war loan OF CO. 000 600 FORMS was held 10 Its en-
gaeement not to issue more notes than came
within the figure OF 2oo,0oo,Ooo forms plus
The amount Of bullion IN is 'ssr1 c9ders re- sss me :,
unimpcachable In form and substance The notes
are avowedly taxation money, ana the mistake OF
mas not been repeated Promising that all the State
notes now IN circulation bear the date and follow
the ormulary OF July 1860, subjon the last OF the
formularies with which shall test your endurance:-
rLoHfY
This State note s accepted and paid out by all the state
treasures and the occasion OF all payments not by
law expressly payable in coin for one horn of Austrian cur
For the Imperial Royal Central Treasury, A. u.
VIENNA, July z, 1856.
ls6e.-The aforementioned arrangement between
the State and bank to the respective limits Of their
note issue is the basis or the existing currency sys
tenn Of Austria and Hungary: The State has gone to
the full length OF the tether II meted out for
ITSELF but not beyond It, On the 1st OF
monthly account at the time OF writing the state
notes in circulation amounted exactly TO 800 0l4.011
norns, and barring few hundred thousands, more
or less, this may be regarded as fixed sum. In con-
sequence OF the drawing in OF the paper ten kreut
ger blts which is now taking place. the Finance De-
partment claims TO have the power OF Issuing state
notes to an amount equal to the sum retired This
would allow at the present moment margin OF
about norins above the 900 900 900 orns TO
| the Finance Department.. This margin, as VIII be
| seen below, Is scarcely yet impinged upon
The bank circulation falls and rises with the de-
mands OF ITS discount and loan business but keeps
hot Oo0 OOO and 400 600 0Orins. the