The times. [volume] (Richmond, Va.) 1890-1903, 1893-02-19

nay out metallic money. oevsntson mi-
lions of gold went out thus IN one week
from the vaults of the bank Qrom the
9Th to The 18th Of january, and the bal
once sheet that we publish to-day SHOWS
a new loss OF gold still more considerable.
This "a not the first time that the Bank
OF France has found itself pushed TO the
limit Of its right OF emission. Twice al
ready since 1873 the fame thing mas hap
pened. This Is. moreover. the lot OF all
banks OF issue whose circulation Is limi-
ted. In England. where a figure has been
fixed beyond which every note Issued must
be covered by gold, many cries have
taken place. and each time II has been
necessary to make an exception from the
rule by removing the limit, only to re-es-
tablish II afterward.
The truth Is that our actual system Is
bad and ought to be suppressed. 1t is In
the highest degree illogical TO affirm by
law that French commerce shall never
want more that three and a-half millards
Of bank notes, Before $50 the Bank OF
France was free to extend its circulation
at will. The precautions taken TO secure
its gold management have appeared suffi-
Gent TO prevent abuses, and in fact these
abuses have never existed. We see no
reason why a rule which was formerly
excellent should be bad to-day.
1t should be observed, without doubt.
that the situation has been profoundly
changed since 1870 Before the war, In
fact. the bank note was not legal tender;
to-day on the contrary. every debtor can
force 1t upon his creditor in payment OF
It's nominal value Nothing more true;
but legal tender Is nothing but word.
since IT Is useless. 1t Is not a real adj
vantage TO the bank, for the excellent rea-
son that its notes are at a premium, so that
nobody thinks Of refusing them. 1t is odd
enough TO see 1t made a matter OF re-
proach to the bank to-day, as an extraor-
binary privilege-this legal tender quality
which It has not asked for. and which
has been In some sort imposed upon II.
The details Of our contemporary history
are quickly forgotten. and nobody seems
longer TO remember the circumstances In
which the legal tender quality of the
bank note had birth,
IL was after the war. II had TO do with
the termination Of the suspension OF
specie payment. thanks to which the bank
had been allie to advance to the State
nearly two milliards. The reimburse
ments already made, and those about
to be, enabled France TO prepare at short
notice for the resumption OF specie pay
ments. But In putting an end TO the sus-
pension II was decided to maintain the
legal tender. Now this decision was taken
not at all In the interest Of the bank, but
altogether for the convenience Of the
pubic. My distinguished predecessor In
the chair of the Faculty OF Law, NJ. Bat
bic, who In his quality OF economist fol-
lowed closely. in the Senate, the study OF
this question, told me that the tomris-
sion had been surprised by the innumera-
BILE demands that had reached 1t, en- anat-
In, hncfnacc acnaofaIfx, rios
begging them TO maintain the legal ten
der Of the bank-note. Obliged often to
carry important sums to make payments,
they felt, more than others, the adv n
tageS Of a non-cumbrous paper, eighty
eight grammes of which represent $1,000
francs, while the same sum in gold would
weigh sixteen and one-tenth kilogrammes
and in silver % hiIogrammes. Now, at
this period the bank note was not yet
accepted in the country districts as II is
to-day. The legal tender enabled them to
overcome the resistance born OF an
ignorant mistrust. Such is no longer the
case. All France has accustomed itself
to the bank note. Nobody would think
Of refusing IT, and II may without ex-
aggerauon be asserted that legal tender
Is or no further Use. Keeping up, by
way OF compensation, restriction as
dangerous as It Is illogical. IS making
both bank and public pay dear for pure
ly iIlusory privilege.
The chiefs of anti-liberal radicahsm. It
Is true, exclaim that in suppressing this
Limitation he would play into the hands
OF the great capitalists. Rothschiid. 1t ap-
pears, lays siege to the vaults Of the
Bank of France. He wishes TO possess
himself Of our gold and send it away to
foreign countries. To allow the bank to
augment the number OF It's circulating
notes Is TO deliver our gold TO Rothschnd.
But they have, UP TO this time, en-
pletely forgotten to tell us by what ma
chinery this phenomenon would be pro-
duced t'''
To create bank notes Is not TO lose ones
gold; It Is. on the contrary, to put us in
the way OF not paying out specie; II is
even the best means Of attracting It.
This Is 50 true that during the past ten
years the development OF the fiduciary
circulation has been constantly accom-
panied by an increase OF the metallic re-
serve, and especially Of the gold reserve.
To prove this II sufices to bring together
the balance sheets OF various years. In
the table which follows we have taken
the hrst balance sheet OF each year from
1So2 to 1893 In millions of francs: