The French Crédit Mobilier – First Article (1856)

Published unsigned under the headline “The French Credit Mobilier” in the New-York Daily Tribune, No. 4735, June 21, 1856, p. 5; attributed to Karl Marx by MEW (vol. 12); MEGA² I/15 not yet published. The indication “First Article” is taken from the following articles of the series. Text from the original newspaper (Library of Congress, Chronicling America). Traducción al español.

The Times of London, in a leader on the 30th ult., is much surprised at the discovery that Socialism in France had never disappeared, but has “rather been forgotten” for some years. With this statement it takes occasion to congratulate England at not being pestered with that plague, but free from the antagonism of classes, on which soil the poisonous plant is produced. A rather bold assertion this, coming from the principal journal of a country whose leading economist, Mr. Ricardo, commences his celebrated work on the principles of political economy with the maxim that the three fundamental classes of society—that is, of English society—viz.: owners of the land, capitalists, and laborers for wages, form a deadly and hopeless antagonism—rents rising and falling in inverse ratio to the rise and fall of industrial profits, and wages rising and falling in inverse ratio to profits. If, according to English lawyers, the counterpoise of the three contesting powers is the keystone of the constitution of England—that eighth wonder of the world—according to Mr. Ricardo, who may be presumed to know something more about it than The Times, the deadly antagonism of the three classes representing the principal agents of production, must pervade the framework of English society.

While The Times contemptuously sneers at revolutionary Socialism in France, it cannot help casting a covetous glance at Imperial Socialism in France, and would fain hold it up as an example for imitation to John Bull, the chief agent of that Socialism, the Crédit Mobilier, having just sent The Times, in an advertisement of three close columns, “the Report of the Board of Administration at the ordinary general meeting of Shareholders on April 23, 1856, M. Pereire in the chair.” The following is the account that has enlisted the envious admiration of the shareholders of The Times, and dazzled the judgment of its editor:

Liabilities on 31st Dec., 1855.

Assets.

A profit of twenty-six millions on a capital of sixty millions—a profit at the rate of 43⅓ per cent, these are indeed fascinating figures. And what has not this wonderful Mobilier effected with its grand capital of something like twelve millions of dollars? With sixty million francs in hand they have subscribed to the French loans, first two hundred and fifty millions, and afterward three hundred and seventy-five millions more; they have acquired an interest in the principal railways of France; they have undertaken the issue of the loan contracted by the Austrian Association for the Railways of the State; they have participated in the Western and Central Railways of Switzerland; they have taken an interest in a considerable operation professing for its object the canalization of the Ebro, from Saragossa to the Mediterranean; they had their hands in the amalgamation of the omnibuses of Paris, and in the constitution of the General Maritime Company; they have brought about by their intervention the amalgamation of all the old gas companies of Paris into one enterprise; they have, as they say, made a present of five hundred thousand francs to the people by selling them corn below the market price; they have decided on peace and war by their loans, created new and propped up old lines of railways, illuminated cities, given an impulse to the creations of manufacture and the speculations of commerce, and lastly extended their influence beyond the frontiers of France, and scattered the fruitful seeds of similar institutions over the continent of Europe.

The Crédit Mobilier thus presents itself as one of the most curious economical phenomena of our epoch, inviting a thorough sifting. Without such a research it is impossible either to compute the chances of the French Empire, or to understand the symptoms of the general convulsion of society manifesting themselves throughout Europe. We shall investigate first into what the Board calls its theoretical principles, and then test their practical execution. These principles, as the report informs us, have been until now but partially realized, and await an immensely greater development in the future.

The principles of this company are set forth in its statutes and in the successive reports made to the shareholders, but especially in the first of the latter. According to the preamble of the statutes “considering the important services which might be rendered by the establishment of a society having for its aim to favor the development of the industry of the public works and to realize the conversion of the different titles of various enterprises through the means of consolidating them in one common fund, the founders of the Crédit Mobilier have resolved to carry into effect so useful a plan, and consequently they have combined to lay down the bases of an anonymous society under the denomination of the General Society of the Crédit Mobilier.” Our readers will bear in mind that the French understand by the words “anonymous society” a Joint Stock Company with limited responsibility of the shareholders, and that the formation of such a society depends on a privilege arbitrarily granted by the Government.

The Crédit Mobilier then proposes to itself, first, to “favor the development of the industry of the public works”—which means, to make industry and public works in general dependent on the favor of the Crédit Mobilier, and therefore on the individual favor of Bonaparte, on whose breath the existence of the company is suspended. The Board does not fail to indicate by what means it purposes to extend its patronage, and that of its imperial creator, over the whole industry of France. The various industrial enterprises carried on by joint-stock companies are represented by different stocks or other paper—shares, obligations, bonds, debentures, &c. These different stocks are, of course, rated at different prices in the money market, according to the capital invested, the profits they yield, the different bearing of demand and offer upon them, and other economical conditions.

Now, what does the Crédit Mobilier propose? To substitute for all these different stocks issued by different joint-stock companies, one common stock issued by the Crédit Mobilier itself. But how can it effect this? By buying up with its own stock or other paper the stocks of the various industrial concerns. Buying up all the bonds, shares, debentures, etc.—in one word, all the paper of a concern—is buying up the concern itself. Hence the Crédit Mobilier avows the intention of making itself the proprietor, and Napoleon the Little the supreme director, of the whole varied industry of France. This is what we call Imperial Socialism.

In order to realize this programme, of course financial operations are necessary; and M. Isaac Pereire, in laying out the work of the Crédit Mobilier, naturally feels himself on delicate ground, and is obliged to put limits to the Society which he considers purely accidental and intends shall disappear in its development. The capital of the Company is fixed at 60,000,000 francs, divided into 120,000 shares of 500 francs each. The operations of the Company, such as they are defined in the statutes, may be ranged under three heads: first, operations for the support of industry; secondly, the creation of a value issued by the society to replace or amalgamate the stocks of different industrial enterprises; thirdly, the ordinary operations of banking, dealing in public funds, commercial bills, etc.

The operations of the first category intended to obtain for the Company the patronage of industry, are enumerated in Art. V. of the statutes which says:

“To subscribe for or acquire public funds, shares, or obligations in the different enterprises of industry or credit which are organized in anonymous societies, especially railways, canals, mines, and other public works already established or about to be established. To undertake all loans, to transfer and realize them as well as all enterprises of public works.”

We see how this article already goes beyond the pretensions of the preamble by proposing to make the Crédit Mobilier not only the proprietor of such great industrial enterprises, but also the slave of the treasury, and the despot of commercial credit.

The operations of the second category, relating to the substitution of the stock of the Crédit Mobilier for the stock of all other industrial enterprises, embrace the following:

“To issue in equal amounts, for the sums employed for subscriptions of loans and acquisitions of industrial stocks, the society’s own obligations.”

Articles 7 and 8 indicate the limits and the nature of the obligations the Company has power to issue. Those obligations or bonds

“Are allowed to reach a sum equal to ten times the amount of the capital. They must always be represented for their total amount by public funds, shares, and obligations in the Company’s hands. They cannot be made payable at less than 45 days notice. The total amount of the sums received on account current and of the obligations created at less than a year’s run, shall not exceed twice the capital realized.”

The third category, lastly, embraces the operations necessitated by the exchange of commercial values. “The Company receives money at call.” It is authorized “to sell or give in payment for loans all sorts of funds, papers, shares, and obligations held by it, and to exchange them for other values.” It lends on “public funds, deposits of shares and obligations, and it opens accounts current on these different values.” It offers to Anonymous Societies all the ordinary services rendered by private bankers, such as receiving all payments on account of the societies paying their dividends, interest, etc. It receives on deposit the stocks of those enterprises, but in the operations relating to the traffic in commercial values, bills, warrants, etc., “it is expressly understood that the society shall not make clandestine sales nor purchases for the sake of premium.”