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indeed it could not fail to be considerable at a time when the commerce of France with foreign nations afforded every year a balance of thirty or forty millions of French livres; when Paris, the seat of a flourishing industry, the residence of a brilliant and magnificent court, of a numerous and opulent nobility, of a rich and sumptuous clergy, of an immence concourse of strangers eager in the pursuit of pleasure, and of several companies of financiers profusely lavishing their fortune; when Paris, I say, obtained, through its own private trade, as considerable a balance as that of the whole French trade with foreign countries. In such a state of things, it is difficult to conceive what reverses could have befallen a bank of circulation, the operations of which were limited to extinguish the debts and demands of the private trade of Paris,

But prompted by ignorance or weakness, or dazzled by its success, the discounting bank afforded public credit an useless assistance; and the being deprived of its capital stock brought upon it the fate reserved to all banks which fondly imagine they may combine commercial with public credit. The discounting bank was obliged to dissolve itself, and to swell the list of the creditors of the state.

In the sixth year of the French republic (17981799,) after the calamities of the revolution, but before order was restored to the French finances, and in the midst of the general discredit, the bankers of Paris opened a bank of running or current accounts for their private wants, to assist each other reciprocally in their operations, and to enjoy by their asso

ciation a credit and facilities which they could not

have procured by any other means.

The example was soon followed. Some merchants of Paris established likewise a commercial bank to discount the bills of its share-holders.

The manufacturers, impelled by the same motives of personal interest, opened a bank to procure cash in cases of need.

Some speculators even established a land-bank to restore private credit, which had been entirely destroyed by a fatal paper-currency.

These heterogeneous establishments, different in their object and views, which performed but imperfectly the functions of banks of circulation, being founded upon a system of exclusion and limitation, restored however to circulation the active and productive movement which it had been deprived of for a great length of time; they recalled the nation to labour, industry, and those commercial speculations, which render modern nations flourishing and prosperous, establish order and peace among individuals, and ground the splendour and power of empires: though devoted to private interest only, they forwarded the interests of all.

Each of these banks experienced a different fate. A defective administration, and the infidelity of one of its principal agents, shut up the bank of running or current accounts; no resource was left to commercial credit but in the commercial bank, and in the bank of the manufacturers, whose means were not very extensive.

In the eighth year of the French republic (1800

1801), a joint-stock company established, under the protection of the consular government, a bank called the Bank of France, which comprised in its speculations the totality of the commerce of Paris.

The existence of a general bank and of two private banks guided by the same spirit and directed to the same end, was a singular and remarkable phenomenon in the system of banks of circulation.

They first moved one by the side of the other without injuring and apparently without troubling each other but it was not long ere the nature of things and the force of human passions triumphed over dis interestedness and the love of public good. Each bank experienced the torments of competition; each saw with sorrow that the bank-notes of its rival were substituted for its own, and that its discounts were limited by those of its competitor; they discounted more readily, and sent each other their notes to get them exchanged in specie.

Hence, each bank was obliged to keep a more considerable stock of metallic currency at hand, that they might not be caught unprovided; hence originated mad speculations, and venturesome or badly devised undertakings, the bad success of which shook commercial credit and kept it in a precarious state.

The unbounded extension of discounts afforded also to the share-holders of these different banking establishments dividends so considerable, that it was difficult, not to say impossible, for the nation to lower the rate of interest and to attain a secure and lasting prosperity.

Considerations of this kind induced government to

suppress these different banking establishments, and to erect in their stead a general bank interested in the rise of public stocks.

I shall not enter upon the examination of these various measures; the digression would carry me too far from my object. I shall only cast a rapid glance upon the operations which the bank of France published in the public journals, and point out their conformity or disagreement with the regulating and fostering principles of banks of circulation.

At that time, the bank of France had two kinds of capital stock; the one disposable, which amounted to forty-five millions of French livres, arising from the sums advanced by its share-holders; the other, vested in the public funds, and proceeding from successive reserves of its dividends, consisted of about six millions of French livres ; consequently, the whole capital stock of the bank amounted to fiftyone millions of French livres.

With this capital, the bank of France, in the thirteenth year of the French republic (1805-1806), discounted commercial bills of exchange amounting to six hundred thirty-three millions of French livres. As the discount was for bills drawn at sixty days, it was repeated six times a year, and consequently each occasioned the issue of bank notes to the amount of one hundred and five millions of French livres: but as, at the end of sixty days, the payment of the discounted bills of exchange restored its own notes or specie to the bank, it follows that the six annual discounts put nc more bank-notes into circulation,

than to the amount of one hundred and five millions of French livres.

This proportion of the circulating notes to the capital stock of the bank was not too eonsiderable ; on the contrary, it was greatly inferior to what it might

have been.

But, as was justly observed by the censor of the bank in his report, the exact limits of discounts are those fixed by the wants of the place and the different public services.

Consequently, the bank could neither be blamed for not having enlarged its discounts, nor applauded for not having circulated a larger amount of notes.

It appears that the bank made no distinction between the private discounts of the trade of Paris, and those required for the accommodation of foreigners, and the merchants of the several French departments or provinces; and yet the difference between such discounts is very material, and of the utmost importance for the bank.

Before I account for this difference, I shall attempt to state the extent of these various discounts.

The commerce of Paris, before the revolution, might amount to about five-hundred and sixteen millions of French livres, of which two-hundred and fifty-eight millions were for its own consumption, and the same sum at least for its productions or the income of its inhabitants.

It appears from the accounts of the president and the censor of the bank, that this commerce, either of consumption or of productions, and this income, did

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