Orleans County monitor. [volume] (Barton, Vt.) 1872-1953, 1899-06-12
HOW NATIONS PAY DEBTS.

Hon. George E. Roberts, director of
the United States mint, explains IN
the Independent the methods usually
pursued by nations in paying war in
IDENTITIES. The payment of conso-
lation prize of $50, 900. 900 just made by
the United States to Spain, serves as
text to snow that very little actual
money changes hands. The payment
was made by four drafts on the treas
ury calling for 5000, 900 each. Mr..
Roberts says:
s.Tne drafts go through the clear
ing house by the regular method. No
gold will leave this country to be re-
ceived in Spain as the result of the
transaction. The only payment Of
money will probably be that from the
sub treasury to the clearing house.
Spain will acquire credits in London
and Paris now due to individuals IN
the United States, and will turn these
credits over to individuals to whom
she is indebted. There will be a few
entries on bank ledgers, and the thing
will have been accomplished. IF the
United States, instead Of keeping its
holdings Of money locked up in its
own vaults, followed the practice of
individuals, corporations, municipal
tiles, States and other nations in
keeping idle hoardings in banks, this
payment would not create ripple on
the financial sea.
OF
who really insist that the world is in
a bad way, because, having figured up
the sum of existing debts in one col
umn and the amount Of money to be
had in another, they find that the for
mer exceeds the latter. They are
unable to comprehend that the bust
ness of the world is not done with
money; that money, whether 1t be
gold, silver or paper, is used only in
small retail transactions, or in the
payment of comparatively insignifi-
cant balances which accrue from the
settlement Of large accounts. The
business activities Of the world con-
sist in an exchange of commodities
and services, and this is effected by
the means of paper Instruments
which convey ownership.
Tt will, perhaps, be of interest to
refer back to the payment Of the gold
indemnity enacted Of France by Ger
many in the treaty Of May 10, 1871.
That was the most stupendous under
taking Of it's kind that has ever been
seen. France obligated itself to pay
in all five milliards Of francs or about
81 ZOO, 900, 900. OF this two milliard S
of $500, 0Oo, 900, was to be paid within
one year, and the remaining three
milliards, or $500, 900, on March
2, 1874. Thus the entire sum had to
be paid within less than three years.
To the people who always think OF
payment as requiring a delivery of
cash, it seemed that France, if it had
not undertaken the impossible, must
be greatly distressed in discharging
this debt. The total stock of coin in
France at that time in banks and in
private boards, was estimated at be-
tween five or six milliards of francs.
Hence it was supposed that France
would lose practically it's entire sum
of metallic money. 1t was feared that
its industries would be crippled, it's
internal trade paralyzed, its COM
merce ruined, and there was great
anxiety lest the evil effects might re-
act disastrously upon neighboring
countries intimately connected with
it in trade. M. Leon Say, the French
minister Of finance, in his review Of
the great operation, remarks that .the
transmission, without a crisis, of
capital sum of 5000, 100000 of francs
to Germany is a fact which may be
said to have only been proved to be
possible by it's accomplishment.
Including interest, the actual sum
due from France was $1,000, 229, 016,
and after deductirg the value allowed
for the State railway in Alsace and
some minor offsets, the amount actu-
ally paid was equal to 1898, 1872, 0O1. Of
this $14S, 1913 was paid in coin and
bank notes, and $S49, sos, 273 was set
tied in bills Of exchange. To provide
funds the French government made
two loans, aggregating a little over
the above total. To place the loan
all of the great banks Of Europe were
invited to become agents and receive
subscriptions. A commission of one
quarter or one-half per cent was al
lowed on the first loan, and at first
one per cent on the second, but this
was later reduced to one-half and
one quarter. The bulk of the loans,
however, were placed at home, with