The morning news. [volume] (Savannah, Ga.) 1887-1900, 1892-08-01

nothing more. A bank of emission can.
however, only use it's capital for discount
business on a fiction sanctioned by
experience, and which fiction is boEn of the
idea that holiers of bank notes win not all
present themselves at the same moment to
demand the redemption of their bills. Il is
this probability that they will not all re-
claim at the same time which permits q
bank OF emission TO issue alongside of bills
represented by the coin mouey on hand
bills represented by deposlted values, on
condition that such deposits are for short
date only. 1t is thus by prudent manage
ment that bank Of emission can do dis
counting business which is permitted and
which is necessary.
THE BANK AS A MODERATOR.
Now the role of the Bank of France Is
that OF a moderator and consists in fixing
the rate of interest at the lowest price, but
OF course In such way that capital will be
remunerated. Capital would not last long
withous remuneration any more than did
the farmers horse when he was trying to
teach it to live without fodder. Other es-
teblishments have each their point OF view,
their particular direction according to the
varieties of exchange or the fluctuations of
capital known to them by their own
private information, and they might have
TO vary their discount. But a bank Of
emission like the Bank of France which
knows perfectly well the movements OF ex-
change and OF capital, not only In this coun-
try but all over the world, bank of issue
such as 1t cannot permit itself to be both
cred by the first contraction Of credit, nor
at its first rise; it must decide to proclaim a
variation in the rate Of discount only whom
the facts are certain, and when it feels sure
it will not have to GO back on own de-
cislon the next day.
The Bank Of France has thus contributed
H. a. - 49, N.l~.
proof of this let me quote a few facts.
shall make comparison with the Bank of
England. as it has served as a regulator for
long time, and it is only few years since
the Bank of France was emaDoipaGed from
it. Well, in $40 days the Bank of England
changed the rate of its discount no fewer
than 367 times, aud mean while the Bank of
France changed it bat 113 times, that is TO
say the rate of discount in England had an
average duration OF one month and eight
days, while 1t had duration Of fine months
and day here in France. The movement
OF one OF these great banks has been toward
stability. the other toward instability
From 1858 to 1869 the Bank of England
changed its discount every time one month
and twenty-four days passed, on the aver
age, but the Bank of France changed 1t only
when three months and twenty-five days
had gone. From 1870 to 1881 the Bank Of
England changed its rate of discount every
one month and two days, imposing thus it's
own instability, and auwhie the Bank of
France did not change it's rate any oftener
than once in nine months and eighteen days
on the average.
WHERE THE APPLAUSE COMES IN.
This shows does it not, that the bank Of
France lnsures a more solid base to COM
mercial transactions then did the Bank of
England, and here's where the applause
comes in. But let me show you now the
average of the rate of discount from 1885
TO 1891 IN six or seven of the principal places
OF Europe. We will take that of France
as the basis, and here it was francs .03
centimes, while at Brussels it was ~ CEN
times higher, at London, Al confines
higher; at Berlin, 90 centimes higher; at
Vienna, l franc II centimes higher: at
st. Petersburg, francs 81 confines higher,
and at Rome, francs 81 confines higher
than it was In Paris. This difference in
rates represents big benefit for French
commerce; for as the portfolio of the Bank
Of France is more than seventh or eighth
part of the portfolio of the whole of France
naturally this benefit was felt all over the
country. And as the average of the banks
pnrtfolio-by this | mean its deposits of
shares and stocks and other values-has
been 932 900, 900 france In these recent wears
this shows that it really abandoned ,S0O,-
900 francs OF profits and, as compared with
the Bank of England, the benefit to com
MERGE was q, 200, 900 francs more than In
the United Kingdom.
Some say that this great difference be-
tween Paris and London is because the
Bank of France insists on three signatures,
therefore commercial men generally ad-
dress themselves to discount brokers, hence
the banks rates are not really the actual
tax they are Obliged to pay. They say that
this third signature is unnecessary, and that
IA nj Af ndrlR nd hnaa f1r- >
Well, 1t is quite true that the old lady of
Treadneedle street has paper with only two
signatures in her portfolio. and there are
two kinds Of them. There is paperIot the first
class, which does not have to pay the mini
mum official rate, for the Bank of England
has certain liberties which are not enjoyed
at the Bank of France, ard she can discount
this kind OF paper at "A even / psr cent,
If she 80 desires. But sne also carfies paper
with two signatures which is not hrst-class
paper and on which. when the market rate
is per cent, she can demand or 5 or even
3 per cent, and she gets it. too.
WHAT 1T HAS TO DRAW UPON.
The Bank of France possesses q cash box
such as no other country in she world can
show. | have already told you how much
1t had on hand at the time of its last balance
sheet. There was more than the combined
accommodations OF the banks OF England,
OSAAAASNJ NAA AWAY ohN EAunsFAh A1uhkQAy
at that same period. Ia it any wonder
then, that the people Of this country have
confidence in the Bank OF France, for IL
presents this unheard OF phenomena, and
which practically seems i'm possible. that no
matter what happens its metallic re-
sources cannot be exhausted9 Suppose
that during twenty-six days there
was run on the bank,
and that it threw open all its raging wins
dows, and put all its tellers to handing out
the silver and gold which the public de-
uianded, and that these clerks paid it out as
swiftly as possible; in that time the cash
boxes in the vaults would hardly miss what
had been taken out And when the public
had got these millions of pounds of coin in
their possession they would not know what
to do with them, and, submerged under the
metallic flood, they would cry for mercy
and beg the bank to take it ali back once
more. This is the strength OF the Bank of
France; this is what places it above all risks
and perils, and this is where the applause
comes in again.
The Bank of France is a private society,
but under the guardianship OF the state, a
society enjoying the management of ito
own proper interests under its own share-
holders There are more than %, 900 Of
them, and these delegate their proxies to
200 of their own number, and it is, these last
who run the bank. They elect their own
regents, but the government appoints the
governor of the bank. who manages every