Morning journal and courier., 1891-03-17
FfkE BANK OF FRANCE,
And Eis EEonc in the Paris Rouse
 of thc Dc Vrii1ierc.

And Eis ESomc iu the Paris House
 of thc De VriiIierc.
 [Charles Seymour in the Epoch.l
 The recent loan of seventyfive million francs in gold by the Bank of France to the Bank of England is still the object of acrimonious criticism. Some Frenchmen are vexed because the money was loaned at all, and others growl because only three per cent. interest was asked, instead of double that amount. The more sensible ones admit that the bank made a good stroke and for three reasons; First 1t showed the solid condition of its treasury; second, it helped the English market to avoid a catastrophe that would have ceI- tainly affected the French market; third, it made a reasonable profit for its share holders Let me take advantage Of this important event to say something about the "Oid lady of the rue de la Nrllllere, who is quite us interesting parsonage as her neighbor of Threadnesdle street. The occasion is all the more timely, as the re- uewal of the banks privilege, which ex- pires in 1897, is now under discussion. First of all, here is how the seventy-hve million dollars were transferred from the lender to the borrower. The loan was made in ingots of fine gold at the market rate on the day ot transfer. The Bank of England was obliged to send to Paris an agent supplied with an English treasury bond signed by the first lord of the treas ury as guarantee of reimbursement. The ingots were delivered in three install ments of twenty-five million dollars each. on three different days, in the courtyard of the Bank of France to the English rep resentative; and from that moment the precious metal was entirely at the latter's risk When the day of payment arrives three months hence if no renewal is asked the loan must be repaid at the Bank of | France, either in ingots or in pounds ster- ling valued at their weight in fine gold. | Without entering into a lot of technical details that would be interesting only to financial men, it may be said broadly that the Bank of France, although nominally a private banking house, is in reality semi | official institution, for the reason that its operations are made under state control because it has the monopoly of issuing l bank bills The single fact that the bank issues the French greenback (which is | blue and rose) makes the average citizen | believe that the institution belongs to the government and he has the same confi- | dence in it that he does in the government | itself Business men know that it is a private banking company but they are certain that the state, which appoints the governor and deputy governors, would not allow it to fail, and that behind its nomi- nal capital of one hundred and eighty-two million five hundred thousand francs, fur nished by the stockholders, there is the | fortune of France.
 The bank discounts commercial paper on short time, not exceeding three months and advances money on securities deposi ted. Its credit, however, is not directly accessible to small tradesmen, because il requires all discount paper to have three signatures. Thus business men are often obliged to have recourse to an intermedi
 ate banker, who discounts their notes, and then, after adding his own signature tc the two already on the paper, sends it tt the bank, which rediscounts it. The banl loans money on a very limited number o
 securities For example, it makes ad vances on French railway bonds, but no on foreign railway stocks. It accept
 notes drawn ly foreigners against French men, but does not collect bills drawn b
 Frenchmen on foreigners. These vexa