[The New French Bank Act]
The new French Bank act, and the resignation of Count d'Argout, the Governor of the Bank, arc somewhat remarkable incidents in the financial history of the present Empire. Placed, in 1834, by Louis Philippe, at the head of the French Bankocracy, Mr. d'Argout distinguished himself by the tenacity with which, for 23 years, he clung to office, and by the circumspect prudence with which he weathered the tempests of 1848 and 1851. The revolution of 1848 was directed not only against Louis Philippe, but still more against the haute finance[a], that had its center in the Bank of France. The latter institution and the unpopular personage at its head seemed, therefore, to be naturally the first objects for revolutionary assault. Count d'Argout, undervaluing the immediate chances of the moment, thought himself strong enough to frighten the middle classes into a counter-revolution by artificially aggravating the financial crisis. Accordingly, all at once he cut short the credit accommodations upon which the commerce of Paris was wont to rely; but the immense danger he had thus deliberately summoned, instead of shaking the Provisional Government, reverberated upon the Bank itself. Instead of the confidently expected counter-revolution, there occurred an unseasonable run on the Bank. If d'Argout had miscalculated the energies of the people, he discerned more keenly the capacities of the Government. Not only did he prevail upon them to give forced course to the notes of the Bank, and to humbly accept, under the most unfavorable conditions, a loan from that very same concern which they had just preserved from irretrievable ruin; he improved the occasion to augment the Bank's sources of profit by procuring for it the privilege of :issuing notes of a lower denomination, and to extend its monopoly by crushing the provincial banks of issue. The lowest denomination of notes issued by the Bank of France prior to 1847 was 500 francs; in 1848 it was authorized to issue notes of the value of 200 and of 100 francs. The places of the provincial banks—deprived of the privilege, hitherto enjoyed, of issuing notes—were filled up by new branches of the Bank of France. In consequence of these changes, its total circulation, which at the close of 1847 had only amounted to $48,000,000, reached at the end of 1855 the sum of $122,445,000; its gross transactions, which in 1847 fell short of $375,000,000, had already in 1855 risen to $940,600,000, of which $549,000,000 represented the business of the branches; and its shares, which before the Revolution were usually quoted at about 2,000 francs, now sell for 4,500 francs. Prior to 1848 the Bank of France had been a Parisian rather than a French institution. The new privileges bestowed upon it by the Revolutionary Government transformed it into a private concern of national dimensions. Thus, thanks to the clever management of d'Argout, the monopoly of the financial aristocracy, which the Revolution of February intended to break down, was extended, strengthened, reorganized, through the very instrumentality of that Revolution itself.
The second great catastrophe which d'Argout had to confront was the coup d'état. the success of which mainly hinged upon the forcible opening of the Bank coffers intrusted to his guardianship. The pliant Governor not only winked at Bonaparte's burglary, but contributed much to assuage the apprehensions of the commercial world, by sticking to his post at a moment when the exodus from the administration of all respectable or would-be respectable people threatened seriously to compromise the usurper. In reward for these good services, Bonaparte consented to take no advantage of the proviso in the last renewal of the Bank charter in 1840, by which its statutes might have been revised in 1855. D'Argout, like his friend the late Marshal Soult, never evinced fidelity to anything but place and salary. His resignation at this moment of the Governorship of the Bank of France can only be accounted for on the same principle that, according to popular belief, prompts rats to leave falling houses.
The history of the new Bank law marks it as one of those low jobs that distinguish the era of the present Empire. During the financial crisis which broke out in Europe at the end of 1856, the alteration of the existing Bank law was first mooted on the plausible pretext that the enormous transactions of the Bank rested on too small a capital. For more than six months, mysterious conferences were held in the presence of Napoleon III., between the representatives of the Bank on the one hand, and the great financiers of Paris, the Ministers and the Council of State, on the other. Yet the present bill was not presented to the Corps Législatif till that body was on the eve of its final dissolution. In the preliminary discussions in the bureaux, it was violently attacked; the Committee appointed to report upon it literally tore it to pieces; and there were even threats of rejecting the project altogether. But Bonaparte knew his creatures. He caused an intimation to reach them that Government was determined, and that they must make up their minds either to pass the bill or be turned out of their sinecures at the approaching election. To assist them in parting with the last remnants of shame, the last day of the session was singled out for the discussion of the law. It was then of course passed, with some insignificant amendments. What must be the features of a law which required so much management in order to its passage by such a body as this Corps Législatif?
In fact, in the time of Louis Philippe himself, when the Bank of France and the Rothschilds were notoriously enabled to lay an embargo upon all legislative projects not to their taste, no minister would have dared to propose such a complete surrender of the State to them. The Government resigns the power, still guaranteed by the Charter of 1846, of amending the new Bank Act before its expiration. The privileges of the Bank, which have still ten years to run, are benevolently prolonged for a further term of thirty years. It is allowed to lower the denomination of its notes to 50 francs, the importance of winch clause will be fully understood when we consider that the introduction in 1848 of 200 and 100 franc notes enabled the Bank to replace about $30,000,000 of gold and silver by its own paper. Of the enormous profits, which are sure to accrue to the Bank from this change, no share whatever is reserved for the nation, which, on the contrary, has to pay the Bank for the credit conferred upon the latter in the name of France. The privilege of establishing branch banks in the departments in which they do not yet exist, is bestowed upon the Bank of France, not as a concession made by the Government to the Bank, but, on the contrary, as a concession made by the Bank to the Government. The permission to charge its customers more than the legal 6 per cent interest is encumbered with no other obligation but that of adding the profits thus derived to its capital and not to its yearly dividends. The reduction of the interest upon its current accounts with the Treasury from four to three per cent is more than compensated by the dropping' of the clause of the act of 1840, which obliged the Bank to charge no interest at all whenever the account stood below 80,000,000, the common average of those accounts being 82,000,000. Last, not least, the newly created 91,250 shares, of the nominal value of 1,000 francs, are exclusively ascribed to the holders of the 91,250 shares actually existing; and the Bank shares being now sold on the Bourse at the price of 4,500 francs, these new shares are to be delivered to the old shareholders at the price of 1,100 francs. This act, so entirely framed in favor of the Bankocracy at the expense of the State, affords most conclusive proof of the monetary straits to which the Bonapartist Government finds itself already driven. As an equivalent for all its concessions, that Government receives the sum of $20,000,000, which the Bank is obliged to invest in three per cent rentes, to be created for this purpose, and the minimum price of which is fixed at 75 francs. The whole transaction seems strongly to support the notion circulated en the Continent of Europe, that Bonaparte has already drawn to a large amount on the coffers Of the Bank, and is now anxious to clothe his fraudulent transactions in a more or less respectable garb.
Written on June 2, 1857
First published in the New-York Daily Tribune, No. 5045. June 20, 1857 as a leading article;
Reprinted unsigned in the New-York Semi-Weekly Tribune, No. 1260, June 23, 1857 under the title "The Bank of France"
Reproduced from the New-York Daily Tribune
The draft of the Loi portant prorogation du privilége de la Banque de France was published in Le Moniteur universel, No. 130, on May 10, 1857. After it was passed by the Corps Législatif on May 28, the final text appeared in the same paper, No. 162, on June 11, 1857.
The Corps Législatif was established, alongside the State Council and the Senate, under the Constitution of February 14, 1852, after the Bonapartist coup d'état of 1851. Its powers were confined to endorsing bills drawn up by the State Council. The Corps Législatif was an elected body. However, the elections were supervised by state officials and the police, so that a majority obedient to the government was ensured. In fact it served as a screen for Napoleon III's unlimited powers.
The bureaux were formed by the President of the Corps Législatif out of its deputies for the preliminary discussion of various questions. Usually there were several bureaux, their composition changing periodically.
Source: Marx and Engels Collected Works, Volume 15
(pp.289-292), Progress Publishers, Moscow 1980