The sun. [volume] (New York [N.Y.]) 1833-1916, 1892-09-18

bank with q capital Of 8,O00.0 900 llvres. Its
functions were judicially regulated. Its bills
must be paid when presented: It was not al
lowed to borrow: it's operations must be con-
lined to receiving money on deposit and to dis
counting commercial paper. The benefits OF
the institution were soon visible. Tho pro-
vision OF the charter requiring the banks
bills to be paid in coin Of n fixed weigh gave
q new life to which had been para
lyZed by the preceding fluctuations OF tho
coinage. Laws bills having a liked redeema-
bic valuo were sought for alike by citizens ana
by foreigners. For two years and a half tho
bank remained a private establishment. and
during that time 1t issued bills to tho amount
OF 5l.OOO.OOO livres, which wore enslly abb
sorbed by tho community. for the reason that
whenever presented for payment they wero
promptly discharged In specie. The bank
soon received tho accounts OF those who had
money to deposit aud the demands OF those
who wished to borrow. Laws management
seems to have boon wise and conservative.
Commercial paper was at first discounted at
six per cent. When money became moro
plentitul the rate fell to four per cont. Tho
Improvement in the financial condition OF
France that followed the organization Of this
bank attracted universal attention. Mer-
chants undertook new Enterprises: manu-
facturors increased their rroducts: tho
market for grain improved: the ratio OF in
terest fell. Had Law been content to con-
tinuo his establishment on tho same basis. the
Bank VI France would probably have traced
its origin to him. and could huvo claimed an
antiquity almost ouualling that of its Eng
lish rival. Such II career. however. fell far
short of satisfying tho dreams of tho manager.
In December. us. Laws bank was changed
from n private to n State institution. Those
who had invested In its stocks were bought
out and made n handsome profit. The same
management continued. but II was now under
tho control Of tho Royal Council. The King
was liable for the bills issued. and the amount
OF them was regulated by tho Government.
In our day II bank thus guaranteed by tho
state would in some countries possess n credit
exceeding that Of any private establishment
1t was far from being SO in France ut this
era. The amount Of the circulation could
no longer be restricted by the action of
tho business community. as with II private
bank that must meet it's liabilities promptly
or DO forced into liquidation. Bills could
be poured out as required BY tho necessity Of
tho state. by tho greed or the bad judgment
Of its rulers. The promises of tho King to
meet his obligations had often in the past
been dishonorcd: there was no certainty that
bills OF his bank would escape tho fate Of
other forms of royal Indebtedness. The power
OF debnsing the currency had been recklessly
exercised. and 1t was sure to be again rcsorted
to when there was noed Of such Il measure.
The organization of II ROYAL bank was. how
over. in accordance with Law desires. His
belief was firm that wealth could be more rap
idly created by tho intcrposition OF the State
than by the FREQ action of the individual. In
this tcnet. as in many another, ho was the pre-
cursor of those who advocate the control of
usinc enterprises by the public.