The Bank of France

was founded by Napoleon I at the beginning of this century, and an institution then existing, and called "Caisse d'escompte," which was established in 1776, was amalgamated with it. The capital of the Bank of France was at first 30,000,000 francs, divided into 30,000 name shares of 1000 francs each. The bank commenced business on the 20th February, 1800, and was presided over by a committee of fifteen members. Its operations consisted of discounting and collecting bills, opening of current accounts, issuing notes payable to bearer on demand, and receiving deposits, on which it paid interest.

In 1803 the bank was granted for fifteen years the monopoly of issuing notes, the capital being raised at the same time to 45 millions by the issue of 15,000 new shares. Since that time provincial banks have not been able to issue notes except under Government licence.

In the autumn of 1805 the bullion reserve of the bank was very small, and the Government ordered the bank to encash only 600,000 francs of notes per diem, the total amount of notes issued which, moreover, had fallen to a discount of 10 per cent. to 15 per cent., being 70,000,000 francs. This state of affairs continued till the beginning of 1806.

In 1808 the monopoly of the bank, which was to expire in 1818, was extended to 1843, and the capital of the institution was doubled by the issue of 45,000 new shares of 1000 francs each. From this time the bank, which had retained the character of a private company, became essentially a Government institution, with private commandite partners. The management was confided to a governor and two sub-governors named by the Govern -ment, and to fifteen regents and three censors, who are nominated by the shareholders, and who form the general council. The governor presides over this council, and has to sign its decisions. The sub-governors have a vote and a seat at the council, and rank with the regents.

In 1808 the bank acquired the right to open branches, which were established at Lyons, Rouen, and Lille.

By purchasing 15,000 of its own shares in 1812, and 7100 in 1816, the bank reduced its capital to 67,900,000 francs, at which it remained till 1848.

The Government had reserved to itself the right of allowing the issuing of notes by provincial banks, and between 1817 and 1838 it granted such permission to several banks, viz. in 1817 and 1818 to the banks of Rouen, Nantes, and Bordeaux, in 1835 to the banks of Marseilles and Lyons, and in 1837 to 1838 to the banks of Havre, Lille, Toulouse, and Orleans.

At that time the Bank of France began to establish more branches, and up to 1848 it had fifteen in operation. In that year the above-named nine provincial banks were amalgamated with the Bank of France, whose shares were augmented by 23,350, so that the total was 91,250. In consequence of the political events of 1848 the bank asked the Government to be allowed to suspend payment. The Government granted this request, and decreed the forced currency of the bank notes on condition that the whole issue of notes should not exceed 350,000,000 francs. In consequence of this decree, the notes which had been at a discount of 5 per cent. rose to par. This maximum was raised to 525,000,000 francs in 1849, and in August, 1850, the maximum was done away with altogether, and the notes were again convertible.

In 1857 the monopoly of the bank was continued until

31st December, 1897, and the capital was doubled to 182,500 shares, the new shares being issued at 1100 francs, the difference of 100 francs between the nominal price and that of issue going to the reserve, which was fixed at 10,000,000 francs.

In consequence of the Franco-German war the notes of the Bank of France were declared legal tender, and became a forced currency on 12th August, 1870, and the limit of the circulation was fixed at 1,800,000 francs. This limit was raised to 2,400,000 francs in December, 1870, to 2,800,000 francs in December, 1871, and to 3,200,000 francs in July, 1872. The notes remain still inconvertible, but are at par with gold.

Since 1848 the Bank of France has had the sole right of issuing notes in France, and paid up to 1871 1/2 per mille and since 25th August, 1871, 1 per mille stamp duty on its issue to the Government.

If the rate of discount rises above 6 per cent. the extra profit goes to the reserve.

As long as the notes had not a forced currency, no limit was prescribed to the amount of the circulation or to the proportion of the specie kept as cover for the notes; all this was left to the discretion of the management.

The Bank of France does the following business :

(1) It discounts bills not longer than three months. The paper must have the signature of three parties known as solvent, but since 1848 the third signature may be replaced by goods warrants, or warehouse receipts.

(2) It encashes bills or other documents;

(3) Opens current and deposit accounts, and

(4) Receives valuables for safe custody against 1/8 per cent. commission.

(5) It advances on bullion, French funds, shares and obligations of French railways, and the obligations of the City of Paris and the Credit Foncier;

(6) Makes advances to French municipalities; and

(7) Issues notes.

The Bank of France has the following branches :

A.

Agen, Amiens, Angers, Angouleme, Annecy, Annonay, Arras, Aubusson, Auxerre, Bar-le-Duc, Beauvais, Be-sancon, Blois, Bordeaux, Bourges, Caen, Chalons-s.-S., Chambery, Chartres, Chateauroux, Chaumont, Clermont Ferrand, Dijon, Dunkerque, Epinal, Evreux, Flers, Havre (le), Laval, Lille, Limoges, Lons-le-Saunier, Lyons, Mans (le) Moulins, Nancy, Nantes, Nevers, Niort, Orleans, Perigueux, Poitiers, Reims, Rennes, Rochelle (la), Roubaux-Tourcoing, Rouen, Saint-Brieuc, Saint-Etienne, Saint-L6, Saint-Quentin, Sedan, Tours, Troyes, Valenciennes, Versailles, Vesoul.

B.

Avignon, Bayonne, Brest, Carcassonne Castres, Gre-nobles, Lorient, Marseilles, Montauban, Montpellier, Nice, Nimes, Rodez, Toulon, Toulouse, Valence.

C.

Bastia.

The Bank grants bank post bills (billets a ordre) from any one of the above places on any other of them charging a commission of 0.05 franc for every 100 francs. The minimum commission on each bill is 0.50 franc. The smallest amount for which bills are issued is 100 francs.

Bills presented at the Bank for discount must have the following number of days to run (exclusive of Sundays or holidays) :

The minimum discount deducted on bills taken by the Bank is for ten days.

Since 1876 the Bank of France has opened the following new branches:

Auch, Aurillac, Belfort, Bourg, Cahors, Digne, Foix, Gap, Mende, Mont de Marson, Perpignan, Le Puy, La Roche-sur-Yon, Tarbe, Tulle.