New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-08-25
BANK Of FRANCE PLANS
TO EXTEND ACTIVITIES
Direct Bullion Dealings with
New York Money Market
Now Possible.
THUS CUTTING OUT LONDON
Lower Vaults of Great Estab-
lishment in Heart of Paris
Contain S672,957,-
276 in Gold.
FROM The Tribune correspondent.

h
Of all. The important help Of the Bank
Of France to the New York market in
the great monetary crisis at the end Of
October. 1907, and also the memora / lie
occasions when the Bank of France made
large advances of gold to the Bank of
England at critical times is fresh in the
recollection OF economists The question
OF gold reserves being now 10 the fore
your correspondent visited the famous ma
tional financial institution of France TO
CLEAN some facts concerning the biggest
store Of the precious metal in the world.
After passing the republican guards.
whose turn ii was TO keep watch at all
the entrances and. passing through a
labyrinth of corridors. where uniformed
servtors keep guard, one comes at last
10 the offices OF the high functionaries OF
the bank. who were amiably wiling to
satisfy the curiosity of journalist Book
cases stood around the walls filed with
foios bound in red leather in the private
Office.
Here is our gold reserve for this week.
said the official If formed into solid
block OF gold the reserve would MI my
cabinet de travail.
The American ingots lying in the
vaults behind strong steel gratings are
rectangular in shape. while the British
gold bars are narrower az the base. We
have a considerable amount in United
States gold coinage. Our gold reserve
to-day is the equivalent Of s672, S5s, 276. our
silver IS l27,715.526.
The Bank of France has come to the
assistance of the Bank Of England at
various times since the first we'll remem-
bered intervention. when the City Of
London was in monetary straits through
the failure OF the Barring Brothers in 1880,
consequent upon the economic and politi-
cal trouble in the Argentine Republic.
The Bank of France then lent fifteen
million dollars TO London. and. accord
Ing 10 tradition. that amount was re-
turned 10 Paris without the seals at
iached TO the railway TRUCKS in which the
cold inEots had been placed having even
been broken. The sending OF the metal
was sufficient 10 allay the nervousness OF
the London market
The French gold reserve has helped 10
maintain monetary stability at critical
times on four subsequent occasions from
1895 to 1910. This reserve Of the precious
metal not only covers all fduciary paper
issues. such as banknotes. payments 10
be made in gold AM so on. but enables
the Bank of France 10 come to the aid
Of the international money market during
a financial crisis.
When a marked money tension arises
-
by an advance. and I, the stringency
occurs abroad by loan in gold when. OF
course. the country in difficulties is sol
vent.
In the beginning of 1891 such an emer-
gency arose The money market felt the
oounterblast in the late Nutumn Of that
year. The centre Of the disturbance was
III New York. but Europe was soon az
fected by the defective issue Of national
paper currency in the Union. money
crisis in the United States is a gold crisis
whether IL be for home or foreign dis
Lursements. The heavy drain on the Eu-
ropean markets exceeded the capacity Gf
the open market. Interest on short loans
o. the metal reached fantastic prices, and
Coic was worth l15 per cent at one mo-
ment in New York. The United States
was then the magnet which attracted tn-
world gold The American debtor could
neither meet his liabilities in gold or IN
paper currency. Both had vanished from
circulation Bills on New York were off
hcult 10 negotiate in money current IN Inc
United States Thus flow OF capital
was necessary in the form Of the metal
New York strove 20 obtain the much
needed gold on the London Tree market
the only one existing in times OF crisis.
and in two weeks the Bank Of England
vas the poorer by an exit OF 81 900. 900
- The reserves Of the Bank OF France and
the Reichsbank were much less reduced.
IN moment the discount rate leaped TO
Der cent. In these circumstances fresh
appeal was made for the financial assist
ance Of the Bank OF France. The Bank
Of England obtained a loan Of Sl6OoD.O0
from France through it's Intermediates
~ Paris
The archives OF the Bank Of France
have the following entry In the year 1907:
we made no opposition 10 the with
Grawal Of gold for direct transmission to
New York guaranteed by the discounting
Of French commercial paper values given
as a pledge We have done this in
feeling q friendly solidarity and with
the promptitude that the circumstances
required
We avoided taking a position In the
crisis, but placed at the disposal OF the
London market a sum I'm United States
gold specie of 81. OO0O go. London being the
Intermediary money market for the
world. The Bank of France was able
probably 10 draw on the large gold re-
serves IL holds 10 save the French mar
ket from a tension unknown until then
II the Bank Of Frances big reserve hal
not been a positive, tangible reality I
would have been useless 10 try TO assist
a great and friendly market Grave and
important measures would have been nee
essary TO save the situation, but these
would have been injurious 10 French in
dustry and commerce. The United states
endeavored TO obtain a loan or gold mem
Paris The American Secretary OF the
Treasury. Mr. Cortelyou. made overtures
10 the National Bank OF France. Dut
these overtures failed. and the governing
body OF the French bank gave effect TO
their policy in favor OF the Bank OF Eng
land.
Economists here contend that 1t would
have been better TO lend money direct 10
New York. but the Americans refused 10
subscribe 10 the conditions OF the Dank.
and therefore the request was not non
ored. hesc. same fnanciers think inst
IN the future A uould be best on both