The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1870-08-16
THE BANK OF FRANCE.
Its Suspension Of rpecte Payments and
Financial Condition.

Its suspensicn o. .pecie Payments and
The New York Tribune, in an article on the
suspension of specie payments by the Bank of
france saye:-
The grave measure of suspending specie pay
ments, adopted by the Bank o. France, suggests
inquiry into the affairs of that concern. The
bank possessed on the 2Sth ult. the large sum
of $22S, ,S73, 1864 in coin and bullion (reckoning
5 francs to the dollar), while the notes issued
amounted to 1906, 457, 720, or about the circula-
ton of the National Banks of this country
The deposits in Paris and the provinces
amounted to $116672, ,34614, which illustrates
the widespread interests affected by the course
adopted, in both private and commercial cir
cles.
The statement above quoted proves that the
bank is in perfectly solvent condition. 1t is,
therefore, only as war measure of the most
urgent character that the present step can be
accounted for, the directors having until quite
recently not even deigned to take into conside-
ration the suggestions of some journals in favor
of suspension.
There have, however, been many indications
that the bank was drifting towards suspension.
Finding that many were demanding coin for
notes. the bank last month took advantage of
silver still being a egal-tender to get rid of the
enormous mass of silver coin that for years has
incumbered it's vaults. To applicants for cash
notes il gave half in gold and half In silver;
then it changed, and gave per cent. in gold,
and 95 per cent. in silver and afterwards
it offered only part in silver and the
rest in so franc notes. There was no.
thing of course to prevent the 80 franc
notes being at once presented for payment, but
in that case the holders were reimbursed en-
tirely in silver. The bank thus did good
stroke of business, but the public were annoyed
at being obliged to receive the heavy, cumber-
some, inconvenient, and almost forgotten five
franc pieces. Money-changers of whom there
are multitude in Paris, were on their part,
however, delighted with the resolution of the
tank. They levied "fancy prices" on the public
who wanted gold for notes or silver, and re-
ceived to g. per cent. premium in their more
important dealings.
The subject OF suspending specie payments
considerably engaged the attention of the French
press. In the Debdts NJ. Leon Say, well iknown
for his writings On political economy, said, on
the question of establishing forced currency:
at unfortunately happens that there are many
| people who cease to reason when you talk to them
of Prussia and who would let the most fatal injury
be done to their country If one could contLive to
give sach acts the false colors OF patriotism Forced
currency means bankruptcy, it is the avowal Of i'm
potence and weakness, and we are not struck by
either the other; such is what should be said
spirit OF patriotism, for it is to our honor and it
| is true. Unlike Prussia, we have commerce which
| with stroke OF the pen there are people who would
have us lose the advantage OF that admirable stua-
| ton. To do SO would be simply madness The
Bank of France 1900 millions In coin to meet the
400 millions in notes; and they would have it pub
licly fail to meet its engagements! We can only re-
peat that this would be olly they may hope fer it
j in Prussia, but it will not occur In France"
He proceeds to argue that Prussia could not
| withdraw gold from France without giving an
! equivalent, which hostilities render it impossi
be for her to do, but he ignores the fact that
| she bank would have to contend with the de-
mand for coin which military reyerses would
arouse among French note holders and
depositors. Evidence of this is seen in
the run on last Friday and Saturday, when
some persons had to wait five hours for their turn,
and 1000 600 francs in coin were paid out. He
concludes by remarking that of the securities
held in Prussia there is but one kind negotiable
abroad, that is, American bonds, but if these be
| exported it win not be to France, but to Ame-
rica, which has been for some time absorbing
her own public funds, and contisually offers
vendors better prices than they can procure in
Europe"
The Parle1nent and other journals took the
| opposite view, and recommended every possible
means to prevent French gold from reaching
| Prussia.
The history and organization of the Bank of
France may be briefly stated. In 17I5 bank
was founded in Paris under that name, which
was two years subsequently changedt to the Royal
Bank. Under this organization 1t remained
until 1903, when having been unsuccessful ii
was placed upon its present basis as the Bank
of France, with capital OF 10000 of francs,
which was in 1906 increased to 9O,OOO,O 900 of
francs. 1t Is, shown already, bank OF
deposit discount, and circulation;
issuing its own notes payable on
demand aud having exclusive monopoly OF
that privilege for the entire country. 1t is a
public institution, the Government appointing
q governor and two deputy governors, all Of
whom must be stockholders In the bank. The
affairs of the institution managed by a
council-geneIal of 20 MEMBERS who are elected
by 200 of the principal stockholders. 1t has
branches at Rouen, Nantes, st. Etienne, Rheims
and other towns.