The evening times., 1899-12-23
BANKING IN FRANCE.
Report From Consul skinner to
the State Department..


United States Consul Robert p. Skinner
| writes the State Department from Mar
| seilles. France. an interesting account of
banking. brokerage, and credits in that
country. He says:
Il find that many American firms. anX-
ious to participate in our export trade. are
quite unfamiliar with some Of the primary
laws OF foreign commerce-for example, the
ordinary rules governing payments for
merchandise.
Payments in Marseiles are effected by
! means of bank credits or documentary
drafts. In the former case the American
or Marseiiles buyer. as the case may be,
furnishes the seller with a written engage
ment from London or Paris banker TO the
effect that such banker will accept the
drafts of the seller and pay them at ma
turity upon delivery of the documents
forming the title in the goods. bills of lad
ing principally. The London or Paris bank
er. by this system, assumes the RESPONSE
bility, in which the seller has no future
concern. The banker may deliver the doc
uments TO the buyer against payment or
give credit. according TO his judgment and
at his risk. In case the banker fails after
having accepted the drafts and thereby OBJ
tained possession of the title OF the proper
ty it is well established in Europe that the
buyer is responsible. and that the seller
would have a right TO pursue him for re-
endorsement. since IT is considered that
the buyer supplied the bank credit. chose
the banker. and is therefore responsible for
his banker. In the United States this prin-
ciple does not appear TO be clearly admit
ted in law.
In a payment by means of dOcumenta-
~ drafts the seller, dealing with firm in
good credit, draws directly en- the buyer
and pins the documents or titles to prop
erty. bills of lading. etc, TO the draft. II
it stipulated that the draft is payable
against delivery of the documents The
seller RENTS his draft TO his banker gets
his money under discount. and the draft
n,ay pass through the hands of many bank
ers before it finally reaches its destination
and is paid. In this case, the sellers re-
spousibility never ceases until the day OF
payment: but it is very limited as long as
the bank that holds the draft is solvent.
OF course. if bank should act against the
siipul3 tions of the draft and deliver the
documents without payment, it. and not the
seller would be responsible.
"Marseilles is not a banking centre, and
there are no well-determined rates of ex-
change All banking business of any i'm
portance is done through London or Paris
The London rates are generally more favor
able and that city absorbs the larger
share of business between Europe and
America.
Americans. desirous 10 deal directly
with the foreign purchaser. are often i'm
patient when they discover their own i'm
potence TO do so without the-intervention
of the French broker. They do not realize
that the brokers' commission is paid will
ingly: that the French buyer or seller re-
CARDS his services as Indispensable, and
that. having been a commercial factor as
old as the world, the broker will continue
here at least-to be the inevitable medium
of exchange for years to come. In former
times. all French brokers were sworn gov
ernment nominees. with privileges and
functions debarring outsiders from usurp-
irg their places. At present. stock brokers
and ship brokers only are nominated by the
government. Any person can. therefore,
get up as an ordinary broker. They carry
samples. appraise goods. and determine
questions of quality. They do not unload.
ship. or forward goods, nor do they store
them.
"The best brokers of Marseilles adhere
strictly to their trade principles, take ro
risks, and buy and sell on order. giving
the buyer the name of the seller. and vice
versa 1t might be presumed that buyer
and seller thus coming in contact would
thereafter operate without middleman.
but experience shows that when occasion