The New Orleans Democrat. (New Orleans, La.) 1875-1876, 1876-03-31
THE FRENCH FISCAL Policy.
A Few Hints for our Firaneiers.

| A Chicago organ Of the rag baby
makes some strange assertions respect
ing the French financial policy after the
late war with Germany. One assertion
is, that the payment OF the indemnity to
Germany drained the country of gold
A distinguished French statesman and
economist, M. Leon Say, declares that
the country was not drained Of gold. He
adduces proofs that the gold driven ont
OF circulation by the bank issues was
not exported but was boarded by the
people. Another distinguished econ
omist and statistician says the sumo
thing. The Bank Of France took the
same view Of the matter, ana shaped its
policy accordingly. It withdrew its
twenty-franc notes the smallest OF its
issues in the belief that coin would
come out Of its hiding places to fill the
void and the event fully justified the
belief
Another assertion is that through the
agency OF the extensive bank issues
the Industrial enterprises OF the peo-
pie. Frustrated by the war, were at
once resumed. and there quickly en-
sued u degree Of activity in every
branch OF manufacture and commerce
scarcely parnlleed in the history Of that
industrious, energetic people" This ts
sheer assertion, without particle Of
proof A number Of French statesmen
and economists have written able
essays on the industrial recuperation Of
France after the war, but one of them
has been so visionary as to attribute
the revival to paper issues. They agree
that these issues were Of service in con
ducting the great fiscal operations Of
the government just after the war, but
they do not FOR moment entertain the
notion that the issues revived the un-
tonal industries.
A third assertion is to the effect that
the bank did NOT begin to retire its notes
until after "the balance Of trade turned
in favor Of France, and gold began to
How into the hands Of the French peo-
pie" This statement Is Inconsistent
with the facts. The directors, or mana
gers Of the Bank Of France, not being
ockheads or lunatics, knew perfectly
well that the only way In which gold
could be brought into circulation ana
induced to stay there, was to retire the
notes and make room for coin. This |
they proceeded to do, and they went so
far as to retire not far from $40, 1000, 900 |
in the short space Of eighteen months |
Notwithstanding this contraction, the |
like Of which in this country would raise
D howl Of imaginary distress from Penn
sylvania to Texas, France has steadily |
IIOSiltIcu anu Uoifpuy tlt5 iHOugUl Vi
for more money"
One fact the rag-baby organ studious
Iy s,ippresses, and that Is that, notwith-
it is notorious that France re
lures more circulation per capita than
this country, owing to the imperfect
development Of the system OF deposits
and discounts, the Bank Of France has
never had outstanding q Solume of
notes so large by % hundred millions as
we have alloat to-day, and its present
circulation is not more than
three ffths as much us ours. And that
is one reason, and the principal
reason, why the notes of the bank
are not deprecated. Another reason
Is that the bank promises to resume as
soon as Jan. !, 1878, and everybody be-
lieves that it will not break its promise.
And besides, though the bank is not
obliged to redeem on demand, it Is
liberal in accommodating its customers
who want coin i'm exchange for notes.
The real secret OF the French fiscal sue
cess is industry on the part Of the people,
md honesty and an intelligent recogni-
ton or sound economic principles on
the part Of the bGnk management and
The government, as well as Of the people.
We can achieve u like success il we viii
pursue u like course, and spurn the
luackerics Of our kelleys, Buffers, Nc
Leans, and Aliens