*Neue Rheinische Zeitung.* No. 229, February 23, 1849.

Cologne, February 21. We must supplement our article in No. 224 of the newspaper on v. Bodelschwingh and his associates, and the Prussian financial administration. At the close of that article, we pointed out that 27,127 reichsthaler (17,127 is a misprint) less were entered in the state treasury than were, according to the accounts of the general state pay-office, paid over to it. Subsequently, we found in the accounts submitted by the government a note which solves the riddle of what became of this money.

The so-called administrative savings of the year 1844, amounting to 2,000,002 reichsthaler, were namely not paid in cash into the chest of the state treasury, but Prussian state bonds were purchased for this sum. According to the rate of exchange of the day, a loss of 27,127 reichsthaler is said to have arisen on the purchase. The Prussian ministers are, or were, brilliant financiers! This case brings that fact to light once more. For we no longer have to ask the ex-ministers, gentle as they are, where the 27,127 reichsthaler have gone; we can tell them that, through their cunning, not only 27,000 but more than 400,000 reichsthaler were lost on this single transaction. This reproach is directed, in the first place, at Herr Flottwell, for he was finance minister at the time. He may be an honest man. But the country may well be quite indifferent as to whether its ministers harm it through incapacity or through ill will. An investigation into that could at most be of interest to his family.

In his memorandum on the state treasury of 6 April 1847, the then treasury minister v. Thile declares quite bluntly that in regard to the state treasury the following two principles stand fast:
1) that its stock must at all times be present in cash, coined money,
2) that no payments of any kind may be made from the state treasury, except for the purpose of arming for war.

As far as the first principle is concerned, it is correct that if a state treasury is to exist at all, it only makes rational sense if it is laid down in cash or in precious metals. A government that cannot rely on the power of the people may indeed need a reserve for so-called difficult times. Even if its credit suffers on the exchange, it must still have means in reserve to help itself out of this embarrassment—but that can only be done with cash or precious metals. Gold and silver opens the hearts of the bourgeois at all times. But a printed, a shabby paper is the surest way to lose the “respect” of the exchange as well. When state credit has sunk so low that the aid of the state treasury becomes necessary, there is nothing more humiliating for it on the exchange than to have to offer state bonds for sale and seek a buyer. Anyone who has ever observed a large exchange will know what contempt appears in the mien and gestures of the money speculator as soon as government paper is offered him at such times. For the rest, the speculator may be a Privy Commercial Councillor and very “well-disposed”.

The purchase of state bonds was therefore the most clumsy operation the Prussian government could undertake.
In the memorandum cited, Herr v. Thile declares that he had to accept 1,972,875 reichsthaler in state bonds instead of the 2,000,002 reichsthaler in cash. We attach no value to this excuse of “had to”. But if the accounts are correct, the purchase of the government paper was already carried out by the general state pay-office. Otherwise the whole amount in cash would have had to be delivered to the state treasury. Herr Flottwell therefore seems to stand closest to this happy financial operation.

How petit-bourgeois thrift, which would gladly save a few per cent on the interest, and was not equal to the larger financial undertakings of a state, ends at last in ignominy and disgrace with a double loss, will be shown by the following figures.
To the loss against the nominal value on the purchase
of . . . . . . . . . . . . . . . . . . 27,127 rth.
is added the far greater loss on the sale.
From March to the beginning of July 1848 the rates
for state bonds fluctuated between 66% money (4 April) and
83½% paper (21 March). Since rates fall at once when a large sum of paper
is brought to sale, it is to be assumed that the
government did not get rid of its state bonds at above 70%. On the sale, therefore, against the nominal value
probably at least 30% of 1,972,875
rth., hence . . . . . . . . . . . . . . . . 591,840 rth.
together . . . . . . . . . . . . . . . . 618,967 rth.
were lost; from this deduct the interest gained
for 3 years at 69,048 rth., with . . . 207,144 rth.
so that 411,823 rth.
probably remain as a pure loss. Almost a quarter of the whole sum is
lost, and for that the state’s credit is weakened still more by the depressed rate of the state bonds.

We cite this little sample of the wisdom of Prussian finance and treasury ministers à la Flottwell-Thile only because it makes necessary the supplement to our above-mentioned article. Otherwise we would not occupy ourselves with the small where the large offers us such ample material.