[The Economic Crisis in France]

There is no sign of any alleviation in the financial world of Europe. We learn by the Niagara that the flow of bullion from London to the Continent is more oppressive than ever, and that a proposition to raise yet higher the rate of interest had been voted down at a meeting of the Directors of the Bank of England by only one majority. It is not necessary to say that the cause of the crisis is still to be found in France, and the last number of The Economist which has reached us depicts the state of things in colors of unmixed gloom.

"The absence of any amelioration," says that journal, "is virtually an aggravation, and unfortunately, moreover, no permanent improvement is foreseen. The contrast between the present month and the corresponding one of last year is very painful in nearly every respect, and vet last October the country was engaged in a terrible war[a], the close of which appeared very distant."[b]

Led by this lament, we have taken the pains to contrast the condition of the Paris Stock Market for October with that of the preceding month, and the result of our inquiries may be seen in the following table[c]:

During the period from Sept. to Oct. 31, the shares of various companies fell as follows[d]:

Nothing could be more ingenious than the manner in which the Bonapartist journals of Paris endeavor to account for this perpetual fall at the Bourse. Take, for instance, the paper of M. de Girardin, the Presse.

"Speculation," says this journal, "is still unwilling to renounce its ideas of fall. The continual variations of the Crédit Mobilier cause its shares to be regarded as so dangerous that many speculators dare not touch them, and confine themselves to operating on 'primes', in order to be able to limit beforehand their chances of loss."

The stringent measures taken by the Bank of France, with a view to prevent, or at least to delay, the suspension of cash payments, have begun to tell severely on the industrial and commercial classes. Indeed, there is now raging a regular war between the bona fide commerce and industry, the speculative joint-stock companies already at work and the newly-hatched schemes about to be established, all of them struggling to carry off the floating capital of the country. The inevitable result of such a struggle must be the rise of interest, the fall of profits in all departments of industry, and the depreciation of all sorts of securities, even if there existed no Bank of France, nor any drain of bullion. That, apart from all foreign influences, this pressure on the disposable capital of France must go on increasing, a glance at the development of the French railway system sufficiently demonstrates. The facts we are about to lay before our readers are given by the Journal des Chemins de Fer, which, like the rest of the press in that country, can publish nothing but what is admitted by the Bonapartist Government itself. On the whole, charters have been granted for an aggregate of 5,584 miles of railroad, of which only 2,884 miles are completed and in working order. Consequently there remain still 2,700 miles now being, or about to be, constructed. Nor is this all. The Government is constructing the Pyrenean lines, and has ordered the construction of new lines between Toulouse and Bayonne, Agen and Tarbès, and Mont de Marsan and Trabestans, lines amounting to more than 900 miles. France is in fact now constructing even a greater extent of railroads than she already possesses. The amount of money disbursed on her old railroad system is calculated at $300,000,000; but then its construction extended over a protracted period—a period which saw the rise and fall of three Governments—while the lines now chartered are all to be completed within six years at the farthest, and to begin their operations in the most critical phase of the commercial cycle. The embarrassed companies harass the Government for leave to raise money by new emissions of shares and bonds. The Government, comprehending that this would simply amount to giving leave to further depreciation of the old securities in the market, attended by increased disturbance at the Bourse, dares not yield. On the other hand, the money must be found; the suspension of the works would not only be bankruptcy but revolution.

While the demand for capital to start and sustain new enterprises at home is thus kept on the increase, the absorption of French capital by foreign schemes is by no means abated. It is no novelty that French capitalists have vast obligations to fulfill in Spain, Italy, Austria and Germany, and that the Crédit Mobilier is busy involving them in new ones at this very moment. Spain particularly is now adding to the embarrassments of France, as the scarcity of silver there has reached such a pitch that manufacturers at Barcelona feel the greatest difficulty in paying the wages of their workmen.

With regard to the Crédit Mobilier, we have already observed[e] that the tendency of that institution by no means corresponds with its name. Its tendency is to fix capital, not to mobilize it. What it mobilizes is only the titles of property. The shares of the companies started by it are, indeed, of a purely floating nature, but the capital which they represent is sunk. The whole mystery of the Crédit Mobilier is to allure capital into industrial enterprises, where it is sunk, in order to speculate on the sale of the shares created to represent that capital. As long as the managers of the Crédit Mobilier are able to realize premiums on the first emission of new shares, they can, of course, afford to look with stoical indifference on the general pressure of the money market, the ultimate fate of the shareholders, and the difficulties of the working companies. This explains the curious phenomenon that while the shares of the, Crédit Mobilier are continually falling at the Bourse, its action is as continually extending over Europe.

Beside the general pressure in the money market, there are other causes affecting French manufactures. A great number of mills at Lyons are stopped in consequence of the scarcity and high price of raw silk. Similar causes are paralyzing affairs at Mulhouse and at Rouen. There the high price of cotton has forcibly enhanced the price of yarns, while fabrics are difficult of sale, and manufacturers unable to obtain their old terms. The consequences are, increased suffering and discontent among the workmen—especially at Lyons and in the south of France—where a degree of exasperation prevails, only to be compared with that which attended the crisis of 1847.

From the Bourse, railways, commerce and manufactures, let us now turn to French agriculture. The newly published Customs Returns of France reveal the fact that the failure of the last harvest was far more severe than avowed by the Moniteur[f] Against 270,146 quintals of corn imported in September, 1855, 963,616 quintals were imported in September, 1856, being a difference of 693,470 quintals above the quantity imported in September, 1855, a year of notorious scarcity. It would, however, be a mistake to limit to the inundations, bad seasons, and other natural events, the causes which are evidently at work in transforming France from a corn-exporting to a corn-importing country. Agriculture, never highly developed in France, has positively retrograded under the present regime. On the one hand we see taxes constantly increasing; on the other decreasing labor—great masses of laborers being drafted from the land temporarily by war[g], and permanently by the railway and other public works—with the progressive withdrawal of capital from agricultural to speculative pursuits. What was called Napoleon's democratization of credit, was in fact but the generalization of stockjobbing. What the Crédit Mobilier offered to the middle and higher classes, the Imperial subscription loans did for the peasantry. They brought the Bourse home to their cottages, emptied them of their private hoardings, and carried off the small capitals formerly invested in the improvement of agriculture.

The agricultural distress in France is thus as much the effect of the present political system as the offspring of natural disasters. If the small peasantry suffer less from low prices than the large farmers of England, they suffer, on the other hand,. from the dearth of provisions which to the latter often proves a source of profit. Hence their disaffection illustrated by incendiary fires, which are lamentably frequent, although, by virtue of Imperial orders, they are not recorded in the French papers. If the peasants, after the Revolution of February[h], were exasperated at the notion that the new tax of 45 centimes[165] was thrust on them to keep up the National Workshops at Paris[166], the present peasantry are much more so by the certainty of being charged with taxes on their exhausted resources to enable the Parisians to obtain bread under cost price. If, now, it be remembered that Napoleon, after all, was but the choice of the peasantry, the present revolutionary disposition of this class throws quite a new light on the chances of the Bonapartist dynasty. To what miserable shifts it is already driven, in order to allay and stave off the threatening claims of agricultural misery, may be seen from the language of the Prefects in their circulars for the "encouragement" of charity. The Prefect of the Sarthe, for instance, addresses his Sub-Prefects as follows:

"You will please to take up, with all zeal and confidence, the task, which is one of the finest attributes of administration, viz: to find means of support and employment for those citizens who are in want of either, whereby you will concur in maintaining public tranquillity. You need not fear that you may find the sources of charity dried up, or the private purses exhausted by the sacrifices, however enormous they may have been, of preceding years. Proprietors and farmers have realized considerable profits for some time past, and being more especially interested in the security of the country, they will understand that for them to give is an advantage as well as a duty."

If to all the preceding causes of disaffection we add the dearth of lodgings and provisions at Paris, the pressure on the retail trade of the capital, the strikes in different branches of Parisian industry, it will be understood why the suppressed freedom of the press suddenly breaks forth from the walls of buildings in insurrectionary placards. In a private letter we have received from a trustworthy correspondent at Paris, it is stated that from the 1st to the 12th of October no less than nine hundred arrests took place. Some of the causes of these arrests are worth noticing, as they offer a striking mark of the uneasiness and anxieties of the Government. In one case a man who "does business on the Bourse," as it is called, was arrested for having said that "he saw in the Crimean war nothing but many people killed and much money wasted;" another, a tradesman, for having pretended that "business was as sick as the Government;" a third, because there was found on him a song on David d'Angers and the students[167]; a fourth, a Government official, for having published a fly-sheet on the financial crisis; a tailor, for, having inquired if certain of his friends had been arrested, as he was told so; lastly, a workman, for conversing with a countryman of his, a gendarme, on the high price of provisions, the gendarme interpreting the workman's remarks as hostile to the Government.

In view of all these facts, it seems hardly possible that French commerce and industry should avoid a collapse, attended by political events more or less serious, and affecting to a most disastrous extent the stability of credit and of business, not only in Europe, but in America as well. The rushing movement toward this abyss cannot but be accelerated by the gigantic speculation in Russian railroads in which the Crédit Mobilier, in conjunction with many of the leading banking firms of Europe, have now embarked.

Notes