The Ogden standard. [volume] (Ogden City, Utah) 1902-1910, 1910-06-29
EVOLUTION OF
CREDIT AND BANKS

Washington, June ga striking
review OF the manner In which the
Bank of France has attained the DOM
mating position which 1t occupies
In French finance and It's relation to
the jolnt-stock banks has just been
made public by the National None
tary commission. The monograph on
the subject Is entitled Evolution OF
credit and banks In France and Is
written by Andre Liesse. professor
at the National Conservatory of Arts
and Trades and at tho School Of Po-
litcal Sciences. Professor Llesse
takes up the evolution OF banking In
France In three periods. from 1900 to
1S4S, when the business OF the Bank
of France was restricted to Paris; the
period from 1S4s to 1875. when the
bank became truly n national institu~
ton by the absorption OF the depart
mental banks OF Issue. by its aid in
the extension OF the railway network,
and by its mastery conduct OF the
negotiations for the payment OF the
great war indemnity to Germany; and
from 1875 TO the present time.
The narrative is very far from be-
ing a mere historical summary OF the
development of the Bank of France
Itself, but traces the manner In which
the big credit companies grow up
with the growth of French capital and
I.s distribution at home and abroad.
and the manner In which they have
leaned In emergencies upon the cen
trail bank. Tho Bank OF France ap-
pears as the friendly guardian of the
market in tiding over the period of
stress caused by the failure OF the
Union Generate In 1882. the collapse
OF the copper corner and the liquida-
tion OF the Compton DEscompte in
1889, the reaction OF the Barring fall
ure In England in 1890, and the crisis
OF 1907. In the crisis Of 1890 the
Bank of England borrowed OF the
Bank OF France 100000 francs
(s15.000.0o In gold. with which to
relieve the stress in the English mar
lset The Bank OF France. 1t Is de-
clared by M. Liesse. was not affected
at all by this expectation Of coin"
The average reserve In fact In the
year 1890 was about S500.000.0 900,
composed almost equally of gold and
silver. II the Bank Of England had
been able to Issue notes for 75.000.-
600 francs, In order to meet the diff
ficulties of the crisis, there would
not have been. Mr.. Leisse declares,
the slightest need Of an appeal to
the credit OF the Bank OF France;
and since the latter was willing to
give credit TO the Bank OF England,
the citizens Of England would have
done so equally by accepting its
notes.
The pressure In the money market
In the fall OF 1906 was met by the
Bank of France by tho liberal dis
counting of English paper. This
policy. it Is declared. was much moro
economic, In the high sense of the
word. than the rather archaic one
practlced formerly Of making discreet
loans of gold to the Bank of England
In the following year. 1907 the crisis
grew worse. Discount at the Bank
OF France went up again to 1-2 per
cent, and then to per cent The
Bank of France interviewed a second
time. discounting English paper The
report of the operations Of the bank
for 1907 states that in this way
ready capital OF more than $4,000. 900
francs In American gold was furnished
to the London market In another d.
rection. the Bank Of Franco opposed
no obstacle to the shipments OF
French gold to New York, which were