The sun. [volume] (New York [N.Y.]) 1833-1916, 1877-03-05

by we managed TO swell the volume of circu-
latlon to eight hundred million dollars, now
nominally contracted to three hundred and
ffty-four
To the same mixed eystem OF emission are
due the currency OF Italy at present equiv
alent TO two hundred and eighty million dol
lars. and the nearly equal amount Of paper
still ahoat In Austria. On the other hand,
the rouble notes Of Russia, which aggregate
Ave hundred million dollars, all emanate di-
recty from the Government. France alone,
In most trying emergency. sbstaned from
state issue of legal tenders, but she con
ferrcd compulsory circulation on the paper
Of privileged Institution, limiting her I'M
mediate accountability TO the sums actually
borrowed, which, we may mention, have al
ready been repaid, except remnant Oh
ninety million dollars.
Experience shows that on the eve or after
tho outbreak Of hostilities, q nation may bc
impelled .oa paper currency, not only by the
necessity Of replacing crippled circulating
medium but by urgent financial wants
which can In no other way be so speedily
satisfied. Suppose, for example, that the
Italian Government in 1866, when its five
per cent funds were worth only thirty-six
cents on the dollar, had undertaken to fight
Austria with ordinary loans. If n lender
could have been found, which Is doubtful, it
must have submitted to very oncrous con-
ditions, which would have long weighed
upon its credit. The same thing may bc
said of Austria and Russia at similar june
lures, and we may add that during the pres
cmt complications the attempt of Russia to
| 4 a g.. l.sss
| been Ruthless. In France itself whose fiscal
situation is very different from that of the
| countries named the loan of one hundred
and sixty million dollars asked for at the
outset of the late war was only just met by
subscription. By n second application, un-
der the existing cloud of popular misgiving
the national credit might have been gravcly
weakened. Accordingly recourse was had
to the Bank Of France, whose paper was
made legal tender, and nearly three hun
drcd millions were borrowed before the notes
dropped below par. This is remarkable
phenomenon, and the fact Is also remark
able that at the present moment although
five hundred million dollars in these bank
notes are still in circulation, four-iifths
without State guaranty-gold does not COM
mand the slightest premium.
| III ltaly inc report publsneu DN tlle NroN-
eminent sets forth distinctly the draw
backs of a paper currency The abrupt dis
location of values and obstruction to COM
merce resulting from the displacement OF
specie by variable medium Of exchange
aud the subsequent over-trading and over
banking provoked by an inflated circulation
are shown to have been no less conspicuous
and calamitous in Austria and Italy than
we have observed them TO bc in England and
the United States. We are further remind
ed that when Il crisis comes, countries
loaded with deprecated currency
arc slow to right themselves, being
unable to adjust inflated values To iixeo
and definite standard. They are in the posi-
ton of a man attacked by an acute disease
whose constitution is too much enfecblcC
to support the proper treatment. And finally
II is pointed out that an immediate return
TO hard money is scarcely feasible in the
Austrian empire or the Italian peninsula
where gold still commands a considerabl,
premium, while in Russia the paper rouhle
which for some years had suffered a dis
count Of ten to fifteen per cent, is now sub
jcctcd to IA shave Of twenty-five since wa
has appeared imminent in the Fast.