6o AI^GEKIA - CREDIT 



too direct effects of the reaction from international situations and tight 

 money-markets, and by acquiring, if not independence, at least a certain 

 financial autonomy? Algeria seems to be in the privileged position which 

 allows of all this. Its two great private banks, the Credit Fonder d'Algerie 

 and the Compagnie Alger ienne, have in France not only the headquarters 

 of their respective companies but also agencies. They act as French 

 banks and have succeeded in obtaining depositing clients. This direct 

 participation in the resources of the short-term capital 'market is a great 

 force : it enables them to divide their debt among numerous depositors, 

 almost all of whom are without the preoccupations of professional finance 

 and have markedlj' regular habits and needs. 



These banks are thus directly connected with French capitalists and the 

 constant level of their resources is the better assured to them. But these 

 deposits, although they are abundant and relatively stable, have not the 

 needed elasticity. In order to have resources at co:nmand during the 

 eight or ten months of the progressive immobilization of their advances 

 the banks must be able to rediscount their paper. For this thej^have locally 

 the support of a bank which helps them to imdertake new operations before 

 those in course have been complete^ realized. The Banqite de I'Algerie, 

 being master of its issues, allows rediscount, and thus gives to the other 

 banking houses the opportunity of making settlements on the volume of 

 their business, and provides them with the resources in credit and specie 

 which are required by the needs of the harvest. 



§ 3. The role of the baxoue de i,'ai,gerie. 



The Banque de I'Algerie has been privileged for sixty-five years to issue 

 notes ; and its activity and prosperity have increased considerabh', espe- 

 cially in the last fifteen years. Its powers are large, and its methods are 

 based rather on unhampered experience than on rules. No cover is com- 

 pulsory for its issues ; it discounts bills and gives notes in exchange for them. 

 Its circulation therefore varies with the necessities of the moment, is en- 

 larged when the need of money is considerable and narrowed in times of 

 stagnation.lt is of course limited by a legal maximum. The bank accepts 

 for discount bills bearing two signatures, and if it undertakes rediscount it 

 seeks especially for a direct clientele. . It is easy to understand that in order 

 to associate itself with the activity of the country the bank must not in 

 these circumstances merely accept commercial bills, but must be above all 

 an agricultural bank and make advances. 



If it be profitable to a new country that its fiduciary circulation should 

 be important among its necessary means of credit, the ability' of a bank issu- 

 ing notes to over-develop its business constitutes on the other hand a grave 

 danger. It is therefore above all necessary to excliide credit granted for 

 motives of complaisance and to allow credit to have a bearing only on gen- 

 uine business. At the price of continued experience the Banque de I'Al- 

 gerie has acquired an extremely sure technique. This fiduciary circula- 



