New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1873-11-10
THE BANK or FRANCE.

The advance on Saturday by the Bank OF
France of its rate of discount to seven per
cent is of importance to this country chiefly
through its effect on the financial situation in
London. In The London Times of Saturday,
Oct. %, the City editor notes the continued
depression in the market for foreign stocks
caused by sales for Paris account. These
sales. it was said, proceeded entirely from the
forced realzatiOns to which some OF the great
discount establishments of Paris had been
driven as the natural result OF unsound spec
ulations. 1t was further observed that the re-
st1ictivc measures of the Bank OF France had
compelled these institutions thus to dispose OF
their securities at q sacrifice. The further adj
vance in the bank rate at Paris must necessa-
rily cause a continuance OF this pressure, and
consequently further decline in the securi-
ties thus forced on the market whether the
sales be effected at Paris or London.
The gist of the matter is that since its sus-
pension three years ago the Bank oil France
has gradually been forced by the French Gov
eminent into a position where it is obliged to
decide between a rigid restriction OF its ac-
commodations to borrowers and precipitating
upon itself and tho French nation all the evils
of an excessively inflated and deprecated pa
per currency. Two years ago The London
Economist published an elaborate review of
the position and prospects of the Bank of
France. The conclusion reached by the writer
was as follows: owe fear that no real reme-
"dies will be tried, that the matter will drift
"on, that the circulation will be deprecated
"more and more, that the metallic money will
"disappear ard be boarded, and that France
will add another to the present long list of
"ciyilized countries which are entirely desti-
&" tute of stable standard of value, and which
"are wholly subject to the irregular tluctua
"tons of inconvertible paper
We now proceed to give the actual figures
which indicate the great and growing Difficult
ties which beset the Bank OF France a. April
7, 1870, before the outbreak of the war with
Germany, the circulation of notes was $780,
100000; the deposits S1G0,O00,0O0; the coin and
bullion, S251 900, 900; and the discounts at Paris
and the branches, exclusive of advances on
bullion and securities, SlO4,0000O0. The rate
of discount was two and half per cent. The
Bank at that time was the greatest and strong
est bank in the world. (2.) October 5, 1871, q
few weeks before the article in The Economist
was written, and after the close of the Ger
man war and the suppression of the Commune,
the figures were as follows: Circulation of
notes, 1896, 200. 900; deposits, public and pri-
yate, S136, O0O coin and bullion, $l2j O0O,-
900; trade discounts exclusive of advances on
bullion, &C., $13S, 100000. There had been an
increase of Sl16,OOO,OOO in the circulation, a
decrease of $i26, 100000 in the coin and bullion.
and specie payments were suspended. The
rate of discount was five per cent. Among
the assets of the Bank were included $780,
100000 in bonds of the French Government
and City of Paris, representing advances in
notes and coin made on account of the war
81 On che 23d Of October 1873, the statement
of the bank showed circulation of $69s.0O0,-
600 in notes. $4,000 900 of deposits, $l45, 100000
in specie, and s234,OO0,0OO Of trade discounts
The rate of discount had the preceding week
been advanced TO six per cent. IL will be
found instructive to compare these last figures
both with those of April 2, 1870, and those of
October 8, 1871.
Making comparison with the return Of
April T. 1870, we find the enormous changes of
$3l6, 100000 increase in the circulation and
$i06, 100000 decrease in the coin and bullion
There is loss OF $36,00O0O0 IN the deposits.
and an increase of $l30,00O000 in the trade
discounts There is now M addition to the
debt owing TO the Bank by the Government of
$26o.OO0,0O0 in addition to the Government
stock which tho Bank held in 1870. Such are
the mighty changes produced By the war in