Hunt's Merchants' Magazine and Commercial Review

THE report made at the general meeting of the Stockholders of the Bank of France, on the 25th of January, 1849, on behalf of the General Council, by the Governor, M. D'Argout, has been sent to us by our esteemed correspondent in France, M. Rodet. The events of the last eighteen months, as extraordinary in their financial as in their political aspects, have rendered the position of the Bank one of peculiar peril, and give to the present report more than usual interest.

In the Merchants' Magazine for June, 1849, we gave a translation from the French, of an article on the condition of the Bank in 1848.

The extracts from the report, which follow, will be interesting and useful, by way of additional and more authoritative illustration of the same subject. After noticing the deaths of several officers of the Bank, which occurred during the year, the Governor proceeds at once to speak of

THE CRISIS OF 1848.

Years follow, but do not resemble each other: their changes affect, more or less deeply, the condition and business of the Bank.

In 1846, the dearness of food, and the importation of large supplies of grain, were the chief influences whose reaction affected the Bank. The sudden withdrawing of 172,000,000 of specie, for the most part exported, and the purchase of 45,000,000 of silver bullion, chiefly in London, were the consequences of these paramount causes. The same year the business of the Bank reached the amout of 1,726,000,000 francs.

In March, 1847, the Bank sold to the Russian Government securities to the amount of 2,142,000 francs, (income,) for about 50,000,000. They fur nished the means of discharging the foreign liabilities, incurred by the purchase of grain. Commerce, released from this debt, took a fresh start; enterprise and speculations multiply; some symptoms of an excessive excitement are exhibited, which the Bank avoids encouraging; discounts and

advances on various securities, reach, for the first time, the amount of 1,853,000,000 francs.

On the 24th of February, 1848, a revolution breaks out in France, and, of a sudden, changes the constitution of the State. No one was prepared for this event; it was necessarily calculated to cause a great disturbance of all business transactions.

Soon the state of things became complicated; doctrines dangerous to the right of property were preached; under different forms the old assignants are evoked from the grave; terror seizes the minds of all, and specie rushes from the bank in torrents, and immediately disappears.

The bank had passed through the crises of 1815* and 1830, without being shaken; no change disturbed the even tenor of its way.

But it is next to impossible for an institution of credit to stand at once a political revolution and the threat of a social one. Nevertheless, in February last, the amount in the vaults reached 226,000,000 francs; the bank boldly undertook to meet all calls for specie. After a few days' lull, the crisis redoubled in intensity.

A report, addressed by the Bank to the Minister of Finances, which was published by the Government, in the Moniteur, thus narrates the efforts of the Bank to conjure the spirit of the storm:

"From the 26th of February, to the 15th of March, that is to say, in fifteen business days, the Bank discounted at Paris to the amount of 110,000,000 francs.

"Of 125,000,000 francs due the Treasury, it repaid 77,000,000 francs. In this sum are not included the 11,000,000 francs placed at the disposition of the Treasury at the different offices of the Bank, to meet the urgent calls of the public service in fifteen departments.†

Moreover, the Bank discounted to the amount of 43,000,000 francs, in fourteen cities where it had offices, and at those places sustained trade and industry.

"By its discounts at Paris, it endeavored to prevent the suspension of payments at the Banks of Rouen, Hâvre, Lille, and Orleans, &c.

"From the 26th of February to the 14th of March, the money in the vaults at Paris diminished from 140,000,000 to 70,000,000 francs. New desks have been provided, to facilitate business; this day, (15th of May,) more than 10,000,000 francs have been paid out, in cash: this evening there remains at Paris only the sum of 59,000,000 francs: to-morrow, the rush will be still greater: a few days more, and the Bank will be entirely stripped of specie."

It was time to take some measure; but what? Ought the Bank to stop, and go into liquidation? that were easily and quickly done. The funds in vault represented still, although reduced, 30 per cent of the debt due; 305,000,000 francs of commercial paper, having, on an average, 45 days to run, were on the books: the Bank still possessed of its own, State securities, amounting to 1,170,000 francs (income ;) it had loaned 18,000,000

In 1814, the Bank, for some months, ceased, so to speak, its function: pillage was apprehended; the bills were burnt; those who had accounts current were requested to withdraw their deposits. The reserve fund fell to 5,000,000 francs; circulation, to 10,000,000 francs; deposits on account 1,300,000 francs. When apprehension died away, the circulation soon rose to 70,000,000 francs, and the reserve fund to 93,000,000 francs.

The departments du Var, Bouches-du-Rhone, du Gard, L'Herault Haute Garonne, Pyrenees-Orientales, Rhone, Loire, Haute Loire, Isere, Bas Rhin, La Manche, Cotes du Nord, Charente Inferieure. (It was, above all things, necessary, without the slightest delay, to meet the calls for the savings banks, and the pay of the troops.)

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Hunt's Merchants' Magazine and Commercial Review, 21권