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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 si 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 no 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 considerable; 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

not at that time exceed 328,500,000 French livres ; I ground my assertion on the following circumstances.

The two reports state, that the daily exchange of bank-notes for specie amounted to 4 or 500,000 livres, the average of which sum is 450,000 livres a-day, and for three-hundred sixty-five days 163,250,000 livres.

Now, it is certain that, in ordinary times, banknotes are exchanged for specie merely for wants of consumption, and rarely exceed their amount. Whence it may be inferred with some certainty, that the total amount of the consumption of Paris never was much above 163,250,000 livres: we will however rate it at 200 millions of livres, that we may not be accused of exaggeration.

Admitting the consumption of Paris at 200 millions of livres, the income of its inhabitants must amount to the same sum, or else their expenditure would exceed their income, impair their capitals, and soon diminish the population of that great city. And supposing even that the expenditure had exceeded the income, and that the excess above it had been supplied by capitals, it would still follow that the expenditure, and the values destined to provide for it, constituted a total of four hundred millions of French livres, and that this sum was or might have been the object and the result of the private trade of Paris.

Supposing that the bank had discounted the whole of this sum, which is not probable; the totality of its discounts relative to the private trade of Paris would not have exceeded four hundred millions of livres, or about sixteen millions sterling; and conse

quently, the surplus to make up the six hundred and thirty millions of livres discounted, and amounting to two hundred and thirty millions of livres, must have been foreign to the trade of Paris, and employed merely for the benefit of foreigners, or of the merchants of the departments or provinces of France.

The bank-directors acknowledged in their accounts, that foreign countries, and the merchants of the departments had really partaken of their discounts: but they did not specify the amount of either.

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"It happens," says the censor, in his report, distant speculators exchange in the bank, by means of their correspondents, their bills on Paris for spe-, cie; and having this specie sent to them, they employ it in other bills at a lower rate, but advantageous enough to afford easy and often renewed benefits. Thus a bank so useful to Paris has also a salutary and much more valuable than valued influence upon the greatest number of departments."

But the safety and prosperity of banks, whose fate is so intimately connected with the progress of wealth, which I am now investigating, forces me to observe that this employment of the capital of the bank, held out as advantageous for the departments, was neither profitable to them nor to the bank, but on the contrary, expensive for both.

The bills of the provincial merchants discounted at the bank of France in Paris were, it is true, discounted in bank-notes; but these notes were immediately exchanged for coin, because bank-notes were not known in the provinces, where specie alone was circulated. The result of this discount was therefore

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a loan of the bank to the merchants of the departments at the rate of half per cent a month, or six per cent a year. The loan in itself would undoubtedly have been very advantageous to the departments, had it been' within the means of the bank: but as the loan exceeded the means of the bank, the directors eagerly collected in the departments the metallic currency which they had lent, and at a heavy expence returned to the coffers of the bank the funds which the provincial merchants had carried away at a great expence; so that the whole operation consisted in conveying the coin from Paris to the departments, and back again from the departments to Paris, and to burthen the bank and the departments with the charges of a conveyance equally useless to both parties. This circulation was not productive of any advantage either to Paris or to the departments; it was merely a change of place without any benefit whatever, against which banks of circulation ought constantly to guard by the most efficacious measures, if they wish to attain their end without efforts and without danger.

I shall not dwell upon the still greater inconveniency of discounting the bills of foreigners unconnected with the private trade of Paris, which, according to the censor of the bank himself, had "no other object than to convey the capital of the bank to our enemies and to incapacitate the bank from pursuing its operations :" whatever I might say on this head, would merely be a tedious repetition of what I have stated, and could add nothing to the strength of the observations of the censor upon this subject.

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