The Bridgeport evening farmer., 1910-04-05

l bills. When M. Pallain was asked 1 if it would be more advantageous fo the bank, considered simply as a bank I to impose different rates under diff ] ferent circumstances and at differen places, he made this answer:
 "As a banking establishment, if VI thought it advisable to apply differ
 ent rates, we could easily become tht
 masters of the market But in oul
 position of Bank of France, organized
 to serve the interests of public credi in 9 democratic country, we do no believe ourselves justified to use this option
 Discussing, later on, the method pur-
 sued by the bank to maintain itE great gold reserve of more than $60,- 0O0 GOO, M. PaHain said
 A1t is a principle consecrated by ex- perience that the supreme means o1
 defense for an issue bank, to protect
 it's metallic reserve, is to raise the rate
 of this principle. However, the exten'
 of our reserve allows us to contem-
 plate without emotion important va
 riations of oar metallic stock, ana we
 only have recourse to measure which
 is always painful for commerce and
 industry.
 The stability and the moderation o1
 the rate of discount are considered as
 precious advantages, which the French
 market owes to the organization and
 traditional conduct of the Bank o1 France
 Taking LID the relation of the joint
 stock banks to the Bank of France
 the question was asked whether, if the
 Credit Lyonnais needed money and
 able bills. the bank would discount
 them The reply was:
 HsCertainly. We often do; and this possibility, always open, according to
 circumstances, is an invaluable re-
 source for credit societies. The eTlai- nent founder of the Credit Lyonnais, M. Germain, a very competent man in these matters, admitted frankly that if the Bank of France did not exist he would close the Credit Lyonnais- in times of crisis
 M. PaIlain added, in response to further questions that in the joint stock banks which the .commis isssion would visit they would find the liquid sash very small IT., in Rroportion to the m c1ared, i've consider that the strength of a bank consists more in the conn position of it's portfolio, i. e., in the value of it's commercial bills, rather than in the importance of it's cash re- serves The reason for this was stated to be that for the French pT.i- vate banks the proportion of cash to liabilities is less significant on account of the facilities offered by the organi- zation of the Bank of France for the rapid conversion of good assets into ready money. The part played by the central bank toward the private estab- lishne entS permits the latter, as has many time been proved, to reduce to a. minimum their cash reserves and larger part perhaps than elsewhere to productive commercial operations. In the further discussion of this sub ject, the following colloquy took place:
 tsQ. I suppose the rela tions of the Bank of France with the other banks are cordial; there is no friction? A We have, as a principle, to be on good terms with everybody, and bet ter with certain persons.
 'tQ. Do the banks rely implicitly on the Banks of France to grant them credit when they required it? A. They know very well that in times of diffi- culty we are the. supreme resource.
 70. Does the amount and the char acter of credit granted to other banks depend on the amount and the charac- ter of their accounts at the Bank Of France? A. There is no fixed rule, and although the balance of the ac- count is not a matter of indifference. paper presented which fixed the extent of the credit. In periods of crisis in 1880, in 1870. in 1889-the general council of the bank did not hesitate nents which were in difficulties but which held assets of unquestioned character and value, by extending to hem the largest possible credits"
 Members of the commission did not spare the most searching questions in 1 'egard to the standing of the Bank of France with the public and with other | M. Pa1lain was asked | ooint-b1ank, tIs the Bank of France i 'egarded as a bank for banks or as a 1 bank for the people2'' To this he | made answer thus:
 tfThe Bank of France remained for a | ong time, indeed, the bank for banks, | put since it has covered so much ter | itory with it's numerous branches; 1 ince the minimum amount of all it's | operations has been lowered; since it | las opened deposit accounts to all; | ince it hast ried to simplify and mini nize the fornalities required by it's | pecia1 charter, the industrial and i commercial world has come to use the | ,ank to a much larger degree. At | he same time it's credit has come out tronger, f1rmer, more popular from all | he political and financial crises so ut hesitation that it is already and hat it tends to become more and | nore-as you ask-the bank of all the French public.''
 In order to determine if the system f monopoly of note issue, which be- ongs to the Bank of France, was ac- eptahle to the country as well as to | he financial community, M PalIain vas asked if there was in any quarter ny agitation for a, change in this re- | pect. He replied in the negative aclined to ask more from the Bank f France-to open new branches: to | xtend the benefit of it's credit to | arger number of. places; and to in rease the facilities of. every kind of cred to it's customers. Pressed still urtf1er to say if there was any de- 1and in banking circles for extending