376 t Tones—Eelation of Economic Crises to Legislation. 
its legal tender notes shall be redeemed in specie, 1 and that a 
safe and conservative policy shall be maintained. Interest upon 
deposits is not allowed and advances are made for three months 
only and upon securities attested by three persons of known 
solvency. 2 
During the Franco-Prussian war the bank was again obliged 
to restrict the redemption of notes, taking it up again in 1877. 
But throughout this war the management distinguished itself in 
the most highly credible manner, and has thereby earned the 
praise and confidence of the French people. This financial in¬ 
stitution stands to-day not only as the largest of its kind, but 
as one of the best models of banking mechanism in existence. 3 
Let us now consider briefly the arguments of those writers 
who hold that competition in bank-note issue is the source of 
commercial convulsions, and that the best protection against 
them is to be found in the existence of a single authorized bank 
of issue. 
The discussion of the freedom of bank issue has been modi¬ 
fied in France, to a greater or less extent, by political and his¬ 
torical connections. The year 1848, in which the monopoly of 
bank issue was completed, and the period of the Franco-Prus¬ 
sian war, during which the management of the bank awakened 
144 Die Bankbesitzt das ausschliessliche Privilegium, Noten auszuge- 
ben, welche sie stets auf Verlangen gegen bares Geld einzulosen hat. Dies© 
Einlosung erleidet aber in den Zweiganstalten der Bank in den Depart¬ 
ments einige Einschrankungen, so dass dieselbe eigentlich nur in Paris 
unbedingt einlost.” Max Wirth, op. cit., pp. 100-101. 
2 “La Banque de France fait des avances: 
1° Sur les effets publics frangais et sur les obligations de la ville d© 
Paris, jusqu’a concurrence des f- de leur valeur d’apres leur cours cot© 
au comptant la veille du jour ou 1’avance est faite; 
2° Sur les actions et obligations des chemins de fer frangais d’apres 
une quotite laissee, pour chaque titre, a son appreciation; 
3° Sur les obligations du Credit foncier, de villes frangaises et de de- 
partements frangais sur les obligations emises par la societe general 
algerienne, et sur les depots de lingots ou monnaies [etrangeres d’or ou 
d’argent qui lui sont faits.” Art. “Banque” in Say’s/ 4 Dictionnaire,” by 
Neymarck. 
3 Max Wirth, op. cit. p. 219, also A. Wagner, Lectures on Banking, Sum¬ 
mer Semester, 1894. 
