tithe of the social disorders which arose out | day during the last 268 days, and which had of the Irish Labor-Rate Act of 1846,-the caused 37 millions sterling to be added to the greatest curse under the name of relief with national debt of France since the year 1841. which any country was ever afflicted; and On the first of January, 1848, the national of which the cost was ten millions sterling! debt of France, deducting the government The first measure of the Labor Commis- stock belonging to the sinking fund, amountsion, forced upon the government, not by ed to £207,185,789. The whole of this the socialists but by the trades unionists, burden it was necessary for the Republic to led to disastrous results. All the relations accept, and as the best possible pledge that between master and servant, employer and it would accept it, and of its anxiety to upemployed, having become unsettled, multi- hold public credit, the Provisional Governtudes of operatives suddenly found them- ment commenced paying in advance on the selves thrown upon the resources of their 6th of March, out of the balance they found past savings. This led to a run upon the in the treasury, the dividends due on the Savings' Bank, and to a financial crisis, by 22nd. This measure, although re-assuring, which the whole industry of the country did not prevent, as it was hoped it would, was brought to a stand. the great depreciation of government stock, as shown by the following quotations: 1818. 8th Closing Prices Closing Prices of 5 per Cents. 73f. 85c. 56f. 50c. 471. 116f. 45c. 89f. 75f. We must not, however, exaggerate the influence of the bad political economy of the Trades Unions. Neither should we attribute to the revolution nor to republicanFebruary 21st ism consequences which do not necessarily March 7th belong to either. The revolution and the labor question precipitated a financial crisis; but the crisis would have stopped far short of that universal bankruptcy which ensued, but for two other causes in operation, one of which is sufficiently obvious; the other to the northern lines, partly at the instibut little understood. gation of parties connected with the old road traffic." We allude first to the profligate expenditure of the late government, which, according to the financial report of M. Garnier Pagès (dated March 9th), had been at a rate exceeding the revenue of £44,000 per The fall of railway stock was in a similar, and in some instances in a greater proportion than the above, from the damage done Prices of * Given in extenso in the "Times" of March 13. The following abridged statement of the National Debt of France is from the "Times" of February 29th. "On the accession of Louis Philippe to throne the capital of the funded debt of France had reached to about £172,000,000. Since that period an excess of expenditure over revenue has been the rule, and the following oans have successively been taken : Period, amount, and rate of the French loans contracted during the last 18 years. "We have here an addition of thirty-seven millions sterling (being at the rate of more than two milions increase each year), which brings the present total to about 209 millions. These stand in the following way: The failure of banking houses hold- stead of relieving the pressure, aggravated ing large securities in railway bonds, was it into panic. The depositors finding that one of the first symptoms of commercial a transfer warrant given them as 100 francs, alarm. But the subject of greatest uneasi- would only sell for 75 (although they were ness was the deficit of 1847, for which a not obliged to sell it in an unfavorable loan of 14 millions sterling had been con- market), considered themselves robbed. tracted by the fallen government, in No- The anxiety to obtain gold or silver to hoard vember, on which £3,280,000 only had in the event of worse contingencies inbeen paid. The balance of £10,720,000 creased on every hand; a run commenced remained to be paid by instalments of upon all the banks throughout the country, £400,000 per month, and as the loss to the including the Bank of France, which finalsubscribers would be ruinous, the contract ly (March 15th) was obliged to suspend price having been 75f. 25c. in the 3 per specie payments. The government then cents., it became a problem whether even adopted the only course which remained; the house of Rothschilds, through whom it issued a decree, authorizing the substituthe contract had been taken, would not tion of notes for coin, and declaring the break down under its responsibility. notes of the Bank of France a legal tender. To check the run upon the Savings' Banks, The next day a 1,000 franc note was sold the interest allowed the depositors was for $25 francs in silver, establishing what a raised to 5 per cent., but this did not have bullionist writer would call a depreciation the effect of quieting their fears. The run of paper of 17 1-2 per cent; but more corcontinued; and it became necessary to de- rectly-for no one has ever doubted the solclare the inability of the government to vency of the Bank of France, an appreciameet it with any means at their disposal. tion of bullion, or rise in the value of silver The property of the depositors, amounting to that extent. The alarm spreading to £14,200,000 was chiefly invested in the throughout the continent-the demand for funds. To convert this into cash by sales the precious metals, with a view to hoardof stock after a fall of 35 per cent., or to ing, became general. The two great bankobtain the cash by any other mode, was ing corporations of Belgium, the Société obviously impossible. The government at Générale and the Banque de Belgique, once announced the fact. It arranged to pay were compelled to follow the example of each depositor £4 in cash, to meet the case the Bank of France; and within a week of of the very poor withdrawing it from actual the same date. need, and to pay the surplus in exchequer Two months only had elapsed since the bills at four and six months' date, and 5 Bank of England had been drained of its per cent. stock at par.* This measure in- treasures by a similar panic, but originat"The Provisional Government, considering ing in different causes, and had been comthat the fallen Government has left to the charge of a pelled to protect itself by an order in counRepublic a sum of 355,087,717f. 32c., arising from cil (October 23), authorizing an enlargement the deposits made in the savings-bank; consider of its discounts at 8 per cent. upon notes ing that of this sum there only remains disposable, which had become already practically inin cash, 65,703,620. 40c.; considering that the small deposits belong in general to necessitous citizens; convertible, and which were then sustained whereas the large deposits belong, on the contrary, solely by the credit of the corporation. Pregenerally to persons in easy circumstances; and vious to this order in council, panic had whereas it is desirable to reconcile the interests of succeeded panic, crisis had succeeded crisis, justice with that of the Treasury, and that of private individuals with that of the public; decrees--Article throughout the two years of 1846 and 1847; 1. The livrets (receipt-books) showing a payment of but without a whisper of revolution or re100f. and under, shall, at the demand of the deposi- publicanism. When at last the news came tors, be reimbursed in cash. Art. 2. Deposits of from of a Republic established in France, the English funds and the shares of joint-stock companies fell instantly, almost in the funds and shares in Paris. same proportion in London as French 101f. to 1,000f. shall be reimbursed in the following manner-1, 100f. in cash; 2, the remainde:, up to half of the sum paid in, in one or more treasury bonds, at four months' date, and bearing interest at 5 per cent.; 3, the last half in a coupon of five per cent. rentes at par. Art. 3. For the receipt-books in which the sum paid in shall exceed 1,000f., the savings banks shall pay-1, 100f. in cash; 2, the remainder up to half the amount in treasury bonds at six months' date and bearing interest at 5 per cent.; 3, the last half in a coupon of 5 per cent. rentes at par. Art. 4. The receipt books inscrib ed in the name of societies for mutual assistance shall not be subject to the preceding provisions; their deposits shall be reimbursed in cash. Receipt books for deposits made since Feb. 24, 1818, are also excepted from the measure. March 15th, 1848." Closing prices of his master; that is upon capital. In the London and N. Western shares. 147 to 149 case of money wages, it falls wholly upon labor. A most serious difference. It is idle to talk of coins as fixed standards of value. They are fixed in nothing but weight and quality. Their real want of uniformity of value while retaining the same names, or rather the want of a true standard of value, founded upon general averages, is the source of endless confusion. Trade will continue to be a lottery, and the labor question will never be understood and placed upon a right footing until this mischief has been traced through all its ramifications and corrected. At the moment we are writing it is almost difficult to say whether the stagnation of trade, from the depression of every description of stock, without exception, in which capital has been invested, is not as great in England as in France; and yet not a thought has been entertained in any quarter of the people of this country suddenly agreeing to exchange the sceptre of The doctrine of "convertibility," or her most gracious Majesty Queen Victoria the law which makes metallic money the for another Commonwealth or Protectorate only legal tender, with no means of adjustlike that of Cromwell. To what then are ing its varying value to the equity of conthese universal embarrassments, these perio- tracts, is another of the delusions, pregnant dical ague-fits of commerce, to be really at- with disaster, of the same currency theory. At tributed? To the false monetary principles first sight it seems plausible enough to say by which commercial transactions are regu that a promise to pay one hundred sovelated. False in reference to the use of reigns (we purposely avoid the word coins as a "fixed standard of value;" a pounds) should be discharged with sovestandard as uncertain as if a yard measure reigns only, and not with tea or sugar, or were sometimes to mean 36 inches and some other commodity, at the pleasure of sometimes 24; and false in reference to the the debtor; but as it is notorious that there mode of adjusting the payment of contract is not in existence one sovereign for every debts; the medium agreed upon being one thousand that would be required to discharge which in unforeseen circumstances, such as all commercial obligations in gold, at once, those which have recently arisen, may be- is it not folly, amounting to lunacy, to come impossible, by disappearing altogether contend that the debtors and creditors of from circulation. a nation shall not, with their own consent Before we quit the subject of the labor and that of the legislature, protect their question, we would ask the trades unionists common industry from fluctuations greater of Paris, and all who have sought to regu- than those of the gaming table, by allowing late wages by a money-standard, to consi- other property than gold or silver to be der well what it is they seek to fix. In set- substituted for the precious metals at a tling the wages of a day laborer at 15s. per previously agreed price, in certain emerweek, they fix undoubtedly the quality, gencies? weight, and number of certain silver coins Imagine the commander of a garrison which he is to receive. But is this all their issuing a contract for beef, and upon a object? It is not. Their ulterior object murrain among the horned beasts of the is the food, clothing, fuel, and shelter district rendering it impossible for the conwhich, it is supposed, 15s. will purchase. tractor to fulfil his engagement to the letBut will 15s. always purchase an uniform ter, refusing to accept, instead of beef,quantity of these? They will not. A mutton, pork, fowls, veal, or venison, and bushel of flour in 1846 was 88. one week deciding to hang the contractor, and allow and 12s. another;-with the same quantity his soldiers to starve, rather than consent of silver at his command, the day laborer to any modification of the original agreewas one week fed, and another week starv- ment. The position of the contractor in ing. This does not happen when wages this case is that of all the bankers of Euare paid in kind. The contract of a do- rope. Their business as bankers is to inmestic servant being principally for his vest in securities bearing interest the surboard, whether flour be 8s. or 12s. per plus portion of the deposits placed in their bushel, he obtains the same quantity of hands, not likely in ordinary circumstances bread, or of some other equivalent food. to be required by the public. These deIf provisions be scarce the loss falls upon posits, although originally lodged perhaps in the form of checks and notes, are all There is obviously no physical or moral liable to be demanded in gold or silver, impossibility in giving to a currency of inand to be so demanded at once. In addi- convertible paper an uniformity of value at tion to which, all bank notes payable on least as great as that of gold, and we bedemand are liable to be presented at once. lieve a much greater uniformity, for two The consequence is, that any event which reasons,-one, that paper when in excess of produces general distrust may cause a sud- the demand can be contracted, while there den demand for gold and silver to an are no means of withdrawing gold from amount greater than exists in the whole circulation ;-the other that it would not world. Such a demand can only be even be, like gold, subject to the fluctuations partially met by forced sales of invest- arising from a foreign demand, or a home ments, at whatever sacrifice such sales may panic. The question is merely one of the be effected; depressing therefore alike the mode by which the supply should be adapted value of all securities that are not metallic, to the demand; a question upon which the and making the fortunes of every man con- time will come when political economists nected with commerce or manufactures will be agreed. hang upon a thread. A plan, which might have been suggested The wisdom of the nineteenth century to M. Garnier Pagès, would have been, has as yet discovered no remedy for this instead of declaring the notes of the Bank tremendous evil. A remedy worse than of France inconvertible and a legal tender, the disease is endured in the belief that to have issued a new paper currency founded there are absolutely no other means of upon the security of the funds. When, for checking excessive and fraudulent issues of example, M. Garnier Pagès paid his debts paper money than the test of "converti- to the depositors of the savings' banks with bility; a test which fails the moment it transfer warrants of 5 per cent. stock at is applied on a large scale! No one now par, why did he not make those transfer even suspects a government of abusing the warrants a legal tender, so that the savings' prerogative of the mint, and debasing the banks depositors could have paid their debts coinage, as in the time of Henry VIII., but with them at the same price? The advanfraudulent issues of paper money, it seems, tage of such a currency over that of inconhowever restricted and regulated by Act vertible bank paper is that it would have of Parliament, would be too severe a upheld the funds, and therefore have maintemptation for the virtue of statesmen! tained both public and private credit, It is now assumed that the consequence while the solidity of the security would of a suspension of cash-payments on the have been unquestionable. The dividends part of the Bank of France, will be the of the French fundholders amount to same inundation of inconvertible paper, £8,000,000 per annum. Can any man based upon nothing, with which France doubt the ability of a population of was deluged during the first revolution, un- 35,000,000 to pay this sum annually, or der the name of assignats; the whole of the willingness of the French people to which became valueless. This was in accept the obligation. If not-in that The next year, however (1797), equitable adjustment of national affairs, of the Bank of England suspended cash pay- which the object is to supersede or prevent ments. Yet the English assignats did not universal bankruptcy, what ought the anbecome waste paper, but on the contrary, nual payment of £5 per annum (in silver if so far maintained their value, that on the required) thus guaranteed, to be received return of peace they bought back the gold which enabled the bank to resume cashpayments in 1821.* as worth? In ordinary circumstances it would be worth 25 years' purchase. No injustice therefore could be done by making it a legal tender at 20 years' purchase, or £100 ✦ Assignats were first issued by the NATIONAL or (divisible into fifths and tenths). Such a CONSTITUENT ASSEMBLY, in 1790, to the extent of currency would also have the recommenda£48,000,000; the government receiving them back again in the taxes, and in payment of confiscated Assignat of 100 francs (£4) was then currently exestates sold by auction. In 1795, the CONVENTION changed for six sous (3d.).-Storch, Vol. IV., p. 162 being at war with the whole of Europe, issued The amount of English Assignats, or Bank of them to the amount of £787,980,000, by which the England inconvertible notes, in circulation during value of 100 francs in paper, fell to about that of the war, never exceeded £30,000,000, and they were 100 pence in copper. In 1796 the issue of Assignats issued always upon securities, in the discount o under the DIRECTORY, reached the almost incredible bills,-not, as the French Assignats, in payment o amount of £1,823,160,000 (45,579,000,000f.). An the government expenditure. tion of regulating itself, and being wholly them, and keep the notes in their own independent of capricious issues. It could drawers. never be in excess, because, whenever, These remarks may appear as a digression, from the abundance of money, or capital, but they were necessary to separate in the money ceased to be worth 5 per cent. in minds of our readers two questions, both of the public market, the holders of these 5 importance, but perfectly distinct, although per cent. notes, instead of paying them now accidentally connected-the question away, would receive the dividends upon of republicanism and that of the currency. |