to
bank-depositors, although legally the moratorium stands to March 1,
1915.

Among other temporary devices in French finance was the issue by French
chambers of commerce in the south of France of small pieces of
paper,--as low as 50 centimes or 10 cents,--used only for circulation
and change locally.

Many banks closed their branches because they had not the clerks to man
them. Many bankers lost three fourths of their staff when the
mobilization orders were issued, and all over Paris the banks are
closed from twelve to two because of the limitations of the staff.
When the Credit Lyonnais reopened its branch in the Champs Elysees a
few weeks ago it was manned by women clerks.

The government loan issued in the summer of 1914 met less than half of
the floating indebtedness and 1914 ordinary deficit. The balance as
maturing has been merged into the national-defense loan, which is only
short-term financing. On the 10th of December there were 1,000,000,000
francs of the new national-defense loan outstanding, but it was being
subscribed for all over France daily. This national-defense loan
consists of three, six, nine, and twelve months' government bills
bearing 5 per cent interest. I figured that the amount issued December
10 was for the most part used to provide for the maturing floating
indebtedness, and for the deficit on the government budget aside from
the expense of the present war.

As the government is advancing money to Servia and to Belgium, the loan
of 20,000,000 pounds, or $100,000,000, from England can be readily
accounted for.

There were loans from the big banks of France for the government at the
opening of the war, but these loans I was assured were all merged in
the 5 per cent national-defense loans, which have not exceeding one
year to run.

On these national-defense loans the cautious Bank of France will
advance in limited amounts 80 per cent of the face value, but only
where the government loan matures within three months.

The great principle of the Bank of France is to keep liquid. Its
assets must always be mobile.

There is only one point at which French finance should be criticized,
and as we cannot know all the details of the stress of the military
position when Paris was abandoned, her mobilizing of the reserves still
in disorganization, and her transportation awry, we may not be in a
position to level any just criticism.

But it must be set down in the interest of true report t