Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1874-03-05
THE BANK oFFRANCE.

The Bank of France Is now moving
in the direction of specie payments
and it is an indisputable fact that the
policy Of the managers of that institu'
ton IS directly the reverse, In every
particular, of that which seems most in
favor at Washington. The method
upon which the Bank of France is pro-
ceeding is stated by the NetO York Tri.
bisne as follows:
l. To maintain a rate for discounts
and advances higher than that of the
great centers of trade and exchange in
Germany, England, Belgium, and Hol-
land, and also somewhat higher than
the natural rate in Paris outside of the
Bank. The object of this is to check
the increase of loans and discounts.
But our Mortons and Kelleys and Lo-
gans wish to have money artificially
plenty, and interest artifcially low,and
banks multiplied in number, In order
that their loans and discounts may be
increased, speculation stimulated, and
the purchasing power Of money dimin-
ished.
2. To contract the volume Of notes
In circulation. Ever since the rate of
discount touched seven per cent, at the
beginning of last November, the deter
mination of the Bank to 60 no further
in the direction of imitation has been
apparent to those who from week to
week have followed the statements of
its condition. November Is, 1873, its
note circulation was $780,, 100000; but
on Feb. 5, 1874, it had been reduced to
$3.50, 100000. This is a decrease of
$40, 900, 900, or sixteen millions more
than Mr. Richardson has expanded our
legal tender circulation In about the
same interval.
3. To increase the specie reserve.
This has been effected to the amount of
S26, 000, 900 since the last week in Octo-
Der, the figures being Sl45, 5000 on
the 18th of October, and Sl7l, 1000
on the 5th of February. During the
week ending on the last mentioned day
four millions in gold were withdrawn
from the Bank of England and sent TO
Paris as an effect Of the policy of the
Bank of France. 1t is perfectly well
known to practical fnanciers in Eu-
rope, that If the rate of discount is five
per cent. In Paris and three per cent.
in London, gold will be sent from Lon
don to Paris uuder all ordinary circum-
stances, and without regard to the bal
ance of trade. Here is a suggestive
fact, illustrating an important truth,
which we commend to the attention of
Mr.. Boutwell,
i. To decrease the amount of capt.
tai invested in government bonds. The
Importance of reducing the amount of
the Banks loans to the State as a pre-
hminary to resumption is well under
stood both by the French Government
and by the Bank. The Bank is not 50
insane as to ask for the privilege of adj
vancing more money to the Govern
ment in order that it may get more
bonds as a security and pretext for ex-
panding its note circulation; though
we know not why bank circulation by
the hundreds of millions may not as
well be issued against Government
bonds in France as in America-except
that they have tried it in the former
country to their cost. Within the last
four months the French Government
has redeemed over sixty million dollars
of its debt to the Bank of France, and
for no other purpose than to facilitate
the resumption of payments by the
Bank in specie.
1t would seem that the day Of re-
sumption by the Bank cannot be far
distant. On the 5th of February its
condition was as follows:
ASsstf. Liabilities.
Specie. SOL, 255 600 Notes 1851 SOS, 900
GOv'mt bonds. 2l2 $4,000 Deposits. II 49,, 600
Dis. and loans. 254 SIS 900
Combining the United States Treas
ury and the National Banks, which, so
far as resumption is concerned, are
united as closely as the Siamese twins,
We should obtain a very different show
ing-in round numbers, One-half the
specie, double the Government bonds,
three times the loans and discounts,
fifty per cent more paper money, and
six times as much on deposit. And
yet we are recommended to pursue a
policy in every respect the exact re-
verse of that which restored a sound
currency to England half a century
ago, and is now about to do the same
for Franco policy, in short, which
never ended and never can end IN any
thing but Reputation and bankruptcy.