The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1870-08-18
Symptoms of Financial Embarrassment In
France.

Symptoms of Financial Embarrassment In
France.
The news came by telegraph few days ago
that the Bank of France had suspended specie
payments, and now we learn that there is to
be an immediate issue of paper money-of
twenty five franc notes, it is said. The reason
given for this is the difficulty Of procuring
change for notes Of higher denomination and
the necessity Of ahfording relief. The hundred
franc notes are useless for ordinary purposes.
and change cannot be easily obtained for
even fifty franc notes. This step of issuing
paper money is the first one, we think, leading
to flood of such promises to pay The enor-
nous expenditure of the government to carry
on this gigantic war and the suspension of
business will soon force, probably, large
issue of paper money. Should the war con-
tinue to be unfavorable to France, or should it
even with some successes threaten to be
prolonged one, the Emperor would find it diff
cult to raise large loan from foreign capital
lists, or from capitalists OF all. And looking
at the precarious situation he and his dynasty
have been placed in through his blunders and
failures in the war. and at the revolutionary ele-
ments that are fermentng in France, it will not
be easy to raise such o large loan as his neces-
stiles must call for from the French people.
Everything indicates large issue of paper
money by the government should the war be
prolonged; and this will happen, no doubt,
whether Napoleon remains at the head of the
nation or revolutionary government takes
the control.
There are few people who are not acquainted
with the history of the financial embarrass-
ment and operations Of France during the wars
Of the great revolution. Though beginning
with moderate issues Of paper money at first,
the revolutionary government soon found that
it was necessary to increase these to meet the
demands of the stupendous war it had under
taken. In year or two the country was
flooded with assignats and mandats. Although
the first were based upon the public lands
which had been confscated from the mobiles,
the religious establishments and the emtgrss,
and were sort Of land warrant, they never
theless soon became almost valueless A hat
hardly purchase loaf of bread. The govern
ment resorted to the most extreme measures
to force the circulation and to keep up its
credit; 1t made, In fact, the refusal to receive
this money criminal offence. But though
the guillotine was suspended over the heads of
those who refused to receive or attempted to
throw discredit upon the assignats and mandats,
this did not prevent the extraordinary depre-
citation of them. 1t isnot unlikely that we may
witness similar state of things should the
present war continue long, and especially
should another revolutionary government be
organized in Paris. True, France is richer and
has far more resources now than tthe time
of the first revolution, but the cost Of war is
much greater at present, and the scale on
which it is urged now calls for enormous ex-
pendtures. Unprepared as we were for war
at the time the Southern rebellion broke out,
and vast as were our expenditures, some time
elapsed before United States notes were much
deprecated. Nor was the credit of the republic
at any time seriously endangered. We had no
debt worth speaking about before that event,
and we had a country almost unlimited in its
resources. 1t Is different with France. It
has already debt of near twenty-five hun
dred millions Of dollars, and rich as It may be
1t has nothing like the resources Of this virgin
and vast country. France has not been at
war month, and still specie payments have
been suspended and there is to be large
issue OF paper money. This is only the be-
ginning, and should the war continue we may
expect fearful financial embarrassments, with a
resort, probably, to something like the forced
circulation Of msndats and assignats during
| the time of the FIRST revolution.