Year: 1871

The remarkable contrast between the con-
duct of the Bank of France in coming to the
aid of the government in the hour of need, or
in great crisis, and that Of our so-called
national banks when they might be serviceable
to the nation, ought not to escape the notice
of the American people. We might, indeed,
call attention to the great service which the
Bank Of England and other similar national
institutions In Europe render the State In
comparison with the uselessness of the private
corporations here called national banks. AS,
however, there are some interesting facts
relative to the conduct of the Bank of France
in the crisis through which the French nation
has just passed, we shall advert more particu-
larly to that truly great national institution.
People have wondered at the resources
Of France and the elasticity Of French
finances amidst the terrible disasters
the nation has suffered since the war
with Germany commenced. No other
European nation, perhaps-1o, not even Eng
land-could have sustained such losses and
such cost within one year and come out of
them with credit as little impaired and with
similar available means to repair them. But
it is not always the abundant resources of q
country that enable it to do so well. The rich
est country may suffer very depressed credit
If its finances are badly managed. For
tunately for France she had both great re-
sources and able financial management In
raising means and sustaining the credit of the
government and nation the Bank of France
has been greatly instrumental. The patriotic
conduct of that institution, if such term may
be used as applicable to it, as well as its wis
dom, might offer our national banks lesson, if
they were not 80 intent on their own interests
exclusively and so regardless of the public
welfare.


In order to give clearer idea of what the
Bank of France has done, how it has aided the
government and maintained its own and the
nations credit, we will first glance at the stu
alton of the country. The direct cost of the
war with Germany is estimated by M Theirs
at one thousand six hundred millions of dol
lars, thousand millions of which is for the
indemnity to Germany; and this vast cost,
let it be remembered, accumulated in war of
only few months. 1t came like an ava
lanche upon the resources and credit of France.
But, in addition to this, there were the losses
from the vast requisitions made by the in
vading army and the great damage done by
battle, great deal of which, or all. will have
to be paid for, probably, by the French gov
ernment Then there was the cost of the
Communal insurrection and the losses by de-
struction during that insurrection, which will
amount, probably, to hundred and fifty mil
lions of dollars more. The total cost of the
war, of the claims that will have to be paid
| and of the repairs that must be made, will be
| little less than two thousand millions of dol
lars. It might have been supposed that the
Bank of France, as we'll as other great corpo-
rations, would have been overwhelmed by the
enormous weight of the disasters, cost and
debt so suddenly brought upon the nation,
and that the notes and credit of the bank
would have fallen very low. What are the


facts?


Specie payments were virtually suspended,


or forced currency of bank notes was


adopted, in August 1870. Yet, with all the


disasters that followed, these notes were never
1 dG u UtsCOuut III oIAo Vi AOiO tuou OuC pei
cent, and that only for few weeks. They
have been at par ever since, though there is
| no probability of resumption of specie pay
ments by the bank for some time to come
The Bank of France came to the rescue of the
government in the terrible crisis through
which it was passing, and advanced over two
hundred and fifty millions of dollars. These
were in notes. and, of course, the currency or
circulating medium was inflated to that ex-
tent Still there was no depreciatiOn-no
| gold premium over the value of bank notes.
| The population of the United States is about
| that of France, or little more, while the
natural resources are not less and the pros
| pective resources intellectually greater. Yet
| a sudden addition to our paper currency Of
two hundred and fifty millions during sus-


pension of specie payments would at any time


while the war was going on, or since peace


has been restored, have sent up the gold


premium to high figure and have deprecated


the currency accordingly. Why should it be


so in the United States; this surprisingly rich


country, and not in France? Why have the


notes of the Bank of France remained at par,


or only fallen to one per cent discount for a


few weeks during the most fearful national
| crisis and while the circulation was suddenly


inflated two hundred and fifty millions, and


United States currency become much more


deprecated when the circulation has been less
| increased?


Exhaustive as our war was 1t was much less


so than that of France within given time and


this country never showed such financi
/, elasticity or endurance as France. Even
now. in time of peace and when the revenue
exceeds TIE exPsndIturss hundred millions
year, an increase of currehcy TO halt the
i Z Ill