The Portland daily press., 1879-01-24
Unlimited Paper Money.
Fiat Paper Working the Usual Way in
Blessed Turkey.
le,0rrosDonasnOs Of ths 1onsOn Tina.

Correspondence OF the London Times.l
VIENNA, January 1.-All accounts coming
from Constantinople are full Of the confusion
aud panic caused by the the rapid and unprece-
dentsd fall of the Gaines which occurred last
week, and which drove up the gold lirs Of 100
piastres to 40 and even 400 piastres In paper.
The crisis seems to have been caused by the
action and reaction upon each other of the pro-
iects of the Minister of Finance, zubdi Pasha,
on the one hand and of the Galata Exchange
aud the money changers on the other hand.
There has bsen q standing feud between the
former, who, as the chief holder of the Gaines,
eudeavored by all the means at his disposal to
keep up their value, and the latter, who. Is the
chief possessors of the metallic currency, spec
ulated on the embsrrassments of the Minister
of Finance The issue of the struggle could
not be doubtful in case where, on the one
hand, the embarrassments of the Minister Of
Finance constantly increased, while. on the
other hand. long practice had made the mon
eyed men masters in the art of taking advan-
tage of these embarrassments, and, In spite Of
all efforts to the contrary, the depreciation of
the Gaines continued. The hopes which arose
with the reports of a loan Of a25 ,00o, 900 guar
anteed bv England, portion Of which was to
be devoted to the withdrawal of the Gaines,
retarded somewhat the depreciation; but, as the
realization of these hopes was more and more
deferred, the downward course again began.
ALI of sudden report got abroad of q scheme
of the Minister of Finance for forced COVER
sion of the Gaines, according to which on every
100 piastres piastres were to be paid In gold,
l5 piastres in deferred notes bearing no interest
and repayable in ten years, while 80 pisstres
were to be paid in bonds bearing per cent in
terest, and likewise repayable 10 ten years.
Tue effect of this report on the Exchange OF
Galata and the excitement of tbs money-chang-
ers were such that it was thought advisable 70
publish con,nauaiq,te denying the truth of any
such project having been contemplated By the
Minister of Finance, and this, up TO certain
point again Gained the agitation. But the
temporary lull which ensued was soon followed
by another and fer more formidable storm when
t transpired that, in spite of the ofisial denial
the Minister of Finance had actually brousht
the scheme before the Finance Commission.
Although it bscane known at the same time
tuat the European members of the Commis-
sion had strongly attacked the project of q
forced conversion as bankruptcy in Disguise,
the fsar lest the Minister of Finance, despite
this adverse opinion, should nevertheless at
tempt some such financial coup detdt caused
general panic, which first seized on the ex-
change and money changers, and thea spread
to ell trades-people. In lew hours the
Gaines had gone down more than % per cent.
and there seemed no knowing how far the
depreciation might CO. Almost all transac-
lions were stopped in the bazars, and the
bakers threatened to close their shops rather
than sell bread at the fixed price 10 paper
money, which would have brought home the
effects Of the crisis to the bulk of the popula.
ton, and might have led 70 serious couse-
quences. In this critical situation the Mn
lister of Finance had recource TO the palliative
which had been repeatedly employed with
success before. He had some 10 600 Ira worth
of Gaines bought on account of the Ministry Of
Finance on the Exchange, while the police
kept watch on the money-changers In the