The Charleston daily news. [volume] (Charleston, S.C.) 1865-1873, 1872-08-26
THE RAIN OF MILLIARDS.
! TIE ULTIMATE EFFECT OF The
GREAT FRENCH LOAN.
rb. rhunderer's View OF the Case-An
the Financial Collapse 'sDue" in 1875.

rCity Article OF the London Times, August 10l
The partially fictitious excitement from the
enormous disproporLion of the applications for
the French loan to the amount to be allotted
having subsidized, attention will be given to
the question of the permanent consequence
of the operation. Some weeks ago 1t was
pointed out that they are likely 10 prove en-
tirely different from those expected by the
public, and that the loan. instead of being
cause of future dislrust on The money market,
would most probably lead to an unprecedent-
ed degree of the Initiation, whence the
periodical crash due in 1875 or 1875 will,
perhaps, be found in a great measure TO
date its origin. The transaction simply
consists in the creation of new nego-
liable property to the extent OF fl20,e00, 600,
which will cause q proportionate increase TO
the sense of power and wealth already enjoyed.
In the first instance it passes 10 the hands OF
Germany, but 1t must from that country
gradually find its way throughout the Worid.
France makes the payment without pracllcailY'
for the moment, becoming poorer; onC nGo urI, nao
MANY. the receiver, becomes flZO,u0o,VVo
ricner. France creates the means oy pleoee
of about seven or eight millions sterilng per
annum of her future revenues. NO oue w
that country will have any immediate sense VI
injury from the payment. ii man Drlnss
out reserve of gold or If he parts Wltn some
already existing Investment ioT tue pui po.on
subscribing, he does not feel himself poorer
when hp receives his allotment OIL Inc new
loan I'm return, but, on the contrary, IS pieaseu
,vith Ihe change which he would mol nave
Voluntarily ,nadr, had he not regarded lt as
sHvan,ageolls. If his gold, which had been
previously boarded. be paid to the Germans,
hn hao
their way to London or elsewhere 10 procure
gold or bills for the purpose, the Germans
come into 80 much extra wealth, with which
they must do something. They may lock
up some OF II, and tnus deprive Them
selves Of any benefit except such as
Indirectly arises from the reputation
OF being possessed OF reserved means,
that any large appropriation is likely 10
be made in this thriiless way, or that such
amount, whatever IL may be, will approach
that which has been drawn out from Frencn
boards. There Is probability, however. that
good sum may be employed in paying on tne
public debts of Germany, and, should thls De
Ihe ease, it will, SO far as 1t may cause The
cancelmenL Of existing negotiable SECURITIES,
nenJralizs the effect oI the French loan, since
10 tha, extent the transaction will represent
but q creation of French stocks on lle one
hand, and an extinction OF German STOCK on
the other. Until 1t be known how much VIII
thus be appropriated, no definite antlcipatons
eau be formed of The entire effects OF the
operation. But, in any case, there must OF
large available balance, and whether this be
employed In pnblic works, in deposits with
foreign banks at interest, or In investments ID
foreign securities, such as United StateS or
other bonds, or In the shares OF pnDllc com.
panies, The result must be the same, namelS:
Ihe general advance in prices. Or course, the
effect OF an addition o l2O, 100000 sterling to
the negotiable securities of Europe is not
eoual to that which would be- produced by The
issue of q similar amount Of actual currency,
buL IL causes TO Its full extent on Increase OF
credit power. Doubtless In some cases an
issue OF new securities might occur WIN
out any appreclable result, a., for In
stance, when it deprecates the credit OF The
Issuer 90 as to cause heavy fall in the value
of previous issues, bu; In the case OF the
French loan the influence has been entirely
In The opposite way. History furnishes slml-
lar examples In all directions. England, Hol..
land aud the United States, especially the lat
ter, are powers that can trace their rise as
financial giants solely from the dale oil their
dormant national credit being put Into an
active FORM America, until she had an enor-
mons debt OF her own, was accustomed 10 pre-
dict that the national debt of England must
ultimately cause our ruin, but sne mas since
seen, under similar burden, marVeI!ous 10,
crease or1inancial ANIMATION. IL 1s true Chat
the greater part Of the STOCK creatlohB OF En-
Gland. Holland and the United States went 10
enrich home contractors and employees Of oil
sorts, and that but small proportion OF the
French loan has gone In this way, 80 that It Is
IRON Germany and not from france tnat Tue
here are symptoms OF this In Berlin, and the
movement started there will gradually extend
10 ali other markets. While the payments
between France and Germany are In progress
| there NAV be an occasional temporary perCur-
baton, but the experience OF those hitherto
effected, and also OF the manner IN Whlcn lne
! recent loan subscriptions have been managed,
shows how easily the great exchange opera
lions of The world may BIZ carried through
| when condded to efficient hands. AS regards
onr own position, we know that neither Ger
many nor any other country can drain from us
ANYTHING beyond what we owa them, and that,
consequently, unless we are 1mprudent enough
| to use such German deposits as may from time
10 time come to our custody as Ii they were our
own permanent property, 1t will be matter
| of entire unconcern 10 us, as an individual ma
tion. whether Germany suddenly resolves to
absorb specie, or 10 distribute It. That she
will under any circumstances have O vast
auonnt to invest cannot be doubted, and 1t Ia
equally certain that the effect upon prices will
be In proportion TO such investments. Ii sne
buys Austrian, American, or other STOCKS,
those who sell her those stocks must put their
money Into something else; If she constructs
arsenals, ships or other national works, ,she must
disbnrse in wages end material sums that will
| 6ud their way 10 contractors, and from them
| TO the various bonrses. In the question how
| to dispose Of her sudden accession of wealth
so a. ultimately not 10 do more harm than
good. she has, perhaps, TO encounter the most
| difficult problem that could be presented.
| The only thing at present certain Is that O
period OF Initiation must be anticipated, and that
when this Initiation shall in the course OF a lew
years have reached its height some OF thoae
sunexpected" circumstances for which we are
never prepared, although they are to be
| thing else In the world, whether 1t be a bad
harvest, o war of revenge, or any analogous
catastrophe. will lead to the Usual collapse, IN
| which people will insist upon considering the
best securities to be worth nothing, and every
man will sympathlze with hls nelgbbor in be-
lleviug himself To be beggared.
THE NEW YORK VEGETABLE And