The spirit of democracy. [volume] (Woodsfield, Ohio) 1844-1994, 1874-09-01
How the French Paid the Thou.
sand billions.

No event of modern times has excited
more wide and genuine surprise than the
ease with which the French people paid
off the heavy war indemnity Of Sl,O0O,-
100000 to Germany. 1t has been ruz
zle alike to financiers, to statesmen and
to political economists, how a nation
but just emerged from most costly
Though brief) military struggle, and
whose annual expenditure exceeded its
income, could raise so enormous sum
in cash in less than two years time
National pride, it was widely said, had
much to do with it; but no amount of
National pride could have raised thou
sand million of dollars in Nation where
the conditions of great accumulated
wealth and general prosperity did not
pre- exist. National pride had not avail
ed to save French honor from condign
and overwhelming defeat in the war, TO
avert the humilating spectacle of her
capital in the hands of a foreign foe,nor
to redeem her arms from the reproach of
ili-prepared and undisciplined forces and
badly organized campaigns.
Another theory Of this rapid payment
of tie stupendous fine of five milliards
of france was that France was the holder
of about ten millards 100000, 0,000)
of foreign securities, which were sold
out and the proceeds largely invested in
the new rentes, or Government bonds
, issued at five per cent, to raise money
for meeting the German indemnity. For,
be it mentioned, Bismarck had exacted
. not only cash payment, without credit,
, but also payment in gold and silver
The whole sum of 81, 100000 900 Tin
, Guiding 2OO, 100000 francs levied on the
city of Paris and other war contributions
), levied during the progress of hostilities)
q was paid in specie, excepting only lO0,'
q 900, 900 francs in notes of the Bank OF
4 France, which the Prussians consented to
4 take in place of an equal amount of gold
i. Inquiry into the current of exchanges
actually developed the fact that France
was exporting securities and importing
gold during the whole time of the indem
:. nifty payments but the actual amount tt
q which The flow of the precious metal
n into France extended on this account
could not be accurately learned.
~ Another explanation Of the rapid liqui
e dation by France of this prodigious lev
Y has been furnished by citing the allege
# facts first brought out by NJ. Bonnet i
, Revue des Deux Mondes) that the al
70 nual income of France is eighteen mi
N N liards, or S3,6OO,OOO 900, and that th
10 payment to Germany took only abor
one third of this gross annual earning
10 of the French people. How much shoul
W be deducted for annual expenditure wa
10 not clearly shown. But there can be n
Id doubt that to the general character fo
d frugality, and the accumulated saving
he of the French people, must be main|
a credited this great financial phenomena
~ of the nineteenth century. The emo
y. nous loans which the payment of Il
IF. indemnity compelled the French CO.
nd ernment to put upon the market were
or promptly taken, and the greater porto
d. of the money came from the Frent
as people. Five-per-cent rentes, or bond
an to the heavy amount of 5000, ,OOO,O'
" francs, or 81 $40, 900, 900, were all take
N. ~ up, at an average price of SO per Ger
70. thus making the interest TO the investe
he average six per cent.