Year: 1870

Some of the Inconyeniences of the Struggle
The Proposal TO Establish Paper Cur


rency.


A correspondent of the London Times writes
as follows from the French capital on July 25:-


In Paris we begin to experience some of the
inconvenience of war. People old enough to
remember the time when silver was almost the
exclusive currency in France, and when, if one
drew 1000 francs at bankers, he had either to
pay high premium for gold or to carry home
the numbering dollars will appreciate the incon-
venience implied by the announcement that we
have returned to very nearly the same state of
things. The Bank of France now makes
its payments only in silver and paper. Gold is
at five per cent premium at the money
changers. There is an enormous accumulation
of gold in the bank, but it is not put into crcu-
lation. There is fear of its being exported to
England and Belgium, thence to be taken to
Prussia. hear that Paris banker has recon-
mended the Government to establish a forced


aper currency. The objections to this are
sOvious, and we have only to look back to 1866
for an example of the evil effects of such
Immediately at heavy discount, while the ex-
change on foreign countries rose in proportion.
The consequence, OF course, was that every
thing brought from abroad rose greatly in price,
and this reacted on home produce.


Throughout Italy everything became dearer,
and although the premium on gold not long
afterwards fell to five per cent, and has even,
believe, since been as low as three per cent,





general all the necessaries and luXuries of life,
have never since fallen again IN proportion. A
forced paper currency is a real curse to any
country entailing also the issue of innumerable
small notes-in Italy they have been down to
half franc, miserable little shinplasters; while
the local banks issue twenty-cent notes, which
do not pass out of their own town or district;
for when there is no silver or gold the copper
also disappears.


Meanwhile the Bourse is well supported con-
sidering that we are on the brink of terrible
war, and financial men here speak cheerfully of
its prospects. There have been no catastrophes
yet and we are hoping that the next settling
day (July 81 will go off as well as the last when
everybody paid up. My own conviction is that
there is hardly moneyed man, a banker, mer-
chant or tradesman who would not gladly have
averted the war; but, since it is inevitable, they
put the best face on 1t, and glrd themselves up
to support the burdens 1t must inevitably en-
tail. To quote their own proVerb, "The wine is
drawn and must be drunk" bitter though the
draught may be, and more akin to wormwood
than to grape juice. One class of persons upon
whom the war imposes heavy tax is that of
fathers of families whose sons are to draw in
the next conscription, and who are not disposed
to let them serve. A case came to my know
ledge two days ago, that of friend of my own,
whose son is studying for the bar, and who is
not disposed to let him break off these studies
and be converted into food for powder. He
tells me that if che young man draws a number
low enough to include him in the levy he shall
haVe to pay 5000 francs for a substitute. The
usual price in peace time is about l. 500 francs,
or little more.