June 1856
[I]
The London Times of the 30th of May is much surprised at the discovery that Socialism in France had never disappeared, but had rather been forgotten for some years. Whereof it takes occasion to congratulate England for not being pestered with that plague but free from that 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(1) with the principle that the three fundamental classes of society, i.e., of English society, viz.: the owners of the land, the capitalists, and the wages labourers, are forming a deadly and fatal 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 marvel 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 is 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 agents of that Socialism, the "Credit Mobilier", having just sent The Times in an advertisement of about three close columns; the Report of the Board of Administration at the ordinary general meeting of shareholders on April 23rd, 1856, Mr. Pereire in the chair.(2)
The following is the account that has enlisted the envious admiration of the Times shareholders, and dazzled the judgment of the Times editor: —
Liabilities.
On 31st December, 1855. Capital of the Society The balance of accounts current in December 31st 1854, from a total of 64,924,379 to that of Amount of bills payable of the creditors and for
sundries Total of reserve Total of profits realised in 1855, after the deduction
of the sum to be carried in the reserve
Assets.
francs. centimes. 60,000,000
103,179,308 64
864,414 81 1,696,083 59
t
26,827,901 32
192,567,708 36
1. Rents 2. Debentures 3. Railway & other shares
From which is to be deducted for calls not made up 31st Dec. last
40,069,264 32,844,600 59,431,593
132,345,458
31,166,718
Balance asset 101,178,739
Investments for a fixed period in treasury bonds, continuations, advances on shares etc. Value of premises and furniture Disposable balance in hand and at the bank, and the amount of dividends to be received 31st of December last
Total assets The total amount of rents, shares, and debentures
in hand on December 31, 1854 Has been augmented by subscriptions and purchases made in 1855
84,325,390 1,082,219
5,981,359
192,567,708
57,460,092
265,820,907
Total 323,280,999
40 20 66
26
62
64
9 37
26
36
94
-3
97 Amount of realisation being 217,002,431 34
To which must be added the amount of securities
remaining in hand 132,345,458 26 349,347,889 60 These results show a profit of 26,066,889 63
A profit of 26 millions on a capital of 60 millions — a profit at the rate of 43 (3)/[3]% these are indeed fascinating figures. And what has not this stirring[3] mobilier effected with its grand capital of something like two and a half millions of pounds sterling? With sixty million francs in hand they have subscribed to the French loans first 250 millions, and afterwards 375 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 canalisation of the Ebro from Saragossa to the Mediterranean — they had their hands in the amalgamation of the omnibuses at 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 300,000 francs to the people by selling them corn below the market price — they have decided on peace and war by their loans, erected 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 swindling propaganda over(4) France and scattered the fruitful seeds of their institution over the whole continent of Europe.
The "Credit Mobilier" thus presents itself as one of the most economical phenomena of our epoch wanting 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 theoretic principles and then test their practical execution which, possibly, as the report informs us, have been until now but partially realised, and attend as immensely greater development in the future.
The principles of the society are set forth in its statutes, and in the different, but principally in the first, reports made to the shareholders. According to the preamble of the statutes, and
"considering the important services which might be rendered by the establishment of a society having for its aim to favour the development of the industry of the public works, and to realise the conversion of the different titles of various enterprises through the means of consolidating them in one common fund, the founders of the 'Credit Mobilier' have resolved to carry into effect so useful a work, and consequently they have combined to lay down the basis of an anonymous society, under the denomination of the General Society of the 'Credit Mobilier'".(5)
Our readers will understand by the word "anonymous society,"[1]' 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 "Credit Mobilier" then proposes to itself firstly to "favour the development of the industry of the public works," which means to make industry of public works in general dependent on the favour of the "Credit Mobilier", and therefore on the individual favour of Bonaparte, on whose breath the existence of the society is suspended. The Board does not fail to indicate by what means it intends to bring about this its patronage, and that of its imperial patron,(6) over the whole French industry. The various industrial enterprises carried on by joint stock companies, are represented by different titles, shares, obligations, bonds, debentures, etc. Those different titles are of course rated at different prices in the money market, according to the capital they trade upon, the profits they yield, the different bearing of demand and offer upon them, and other economical conditions. Now what intends the "Credit Mobilier"?
To substitute for all these different titles carried on by different joint stock companies, one common title issued by the "Credit
Mobilier" itself. But how can it effect this? By buying up with its own titles the titles of the various industrial concerns. Buying up all the bonds, shares, debentures, etc.; in one word the titles of a concern, is buying up the concern itself. Hence the "Credit Mobilier" avows the intention of making itself the proprietor, and Napoleon the Little[16] the supreme director of the whole great French industry. This is what we call Imperial Socialism.
In order to realise this programme, there are needed, of course, some financial operations, and M. Isaac Péreire in tracing their operations of the "Credit Mobilier," naturally feels himself on delicate ground, is obliged to put limits to the society considered purely accidental and intended to disappear in its development, and rather throws out a feeler than to divulge at once his ultimate scheme to the world.(7)
The social fund of the society has been fixed at 60,000,000 francs divided into 120,000 shares of 500 francs each, payable to the bearer.(8)
The operations of the society, such as they are defined in the statutes, may be ranged under three heads. Firstly, operations for the support of the great industry, secondly, creation of a value issued by the society for replacing, or amalgamating the titles of different industrial enterprises, thirdly, the ordinary operations of banking, bearing upon public funds, commercial bills, etc.
The operations of the first category, intended to obtain for the society 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 industrial or credit enterprises, constituted as anonymous societies, and especially those of railways, canals, mines, and other public works already established, or about to be established. To undertake all loans, to transfer and realise them, as well as all enterprises of public works."(9)
We see how this article already goes beyond the pretensions of the preamble, by proposing to make the "Credit Mobilier" not only the proprietor of the great industry, but the slave of the Treasury, and the despot of commercial credit.
The operations of the second category, relating to the substitution of the titles of the "Credit Mobilier" for the titles of all other industrial enterprises, embraces the following:
"To issue in equal amounts for the sums employed for subscriptions of loans and acquisitions of industrial titles the society's own obligations."
Articles 7 and 8 indicate the limits and the nature of the obligations the society has power to issue. These 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 society's hands. They cannot be made payable at less than 45 days notice. The total amount of the sums received in account-current and of the obligations created at less than a year's run shall not exceed twice the capital realised."
The third category, lastly, embraces the operations necessitated by the exchange of commercial values. The society "receives money at call." It is authorised "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 account-currents on their 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 keeps a deposit of all titles of those enterprises, but in the operations relating to the trade 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."
Endnotes
[1] Besides The People's Paper, Marx also sent this article to the New-York Daily Tribune, which published it without title and signature. In the Tribune certain passages were omitted. The People's Paper was founded in May 1852 as a weekly of the revolutionary Chartists. Marx contributed to it and helped Ernest Jones, its chief editor, with the editing and organisational matters, especially in its early years. Between October 1852 and December 1856, besides publishing the articles Marx wrote specially for it, the paper reprinted the most important articles by him and Engels from the New-York Daily Tribune. At the beginning of 1856 Marx's contributions to The People's Paper became especially frequent. However, towards the end of that year Marx and Engels temporarily broke off relations with Jones and stopped contributing to his weekly because of Jones' increasing association with bourgeois radicals. The paper ceased publication in September 1858. The New-York Daily Tribune was founded in 1841 and was published until 1924. Prior to the mid-1850s it was a left-wing paper and then it became the organ of the Republican Party. Among its contributors were prominent American writers and journalists. Charles Dana, who was strongly influenced by the ideas of Utopian socialism, was one of its editors from the late 1840s. Marx contributed to the newspaper from August 1851 to March 1862. His contacts with the newspaper ceased entirely during the US Civil War.
[16] Louis Bonaparte was nicknamed "the Little" by Victor Hugo in a speech in the Legislative Assembly in November 1851; the nickname became popular after the publication of Hugo's pamphlet Napoléon le Petit (1852).
[3] Marx is referring to the wars of the Spanish (1701-14) (see Note 236) and the Austrian (1740-48) Succession. As a result of the first war, under the Treaty of Utrecht (1713) Savoy obtained Sicily, Montferrato and part of the duchy of Milan. The Duke of Savoy became King of Sicily. In 1720 Savoy, Piedmont and Sardinia, which had been ceded to Savoy in compensation for Sicily seized by Spain in 1718, formed the Kingdom of Sardinia ruled by the kings of the Savoy dynasty. The War of the Austrian Succession ended with the Peace Treaty of Aachen (1748) under which the Kingdom of Sardinia received from Austria part of the Principality of Pavia and some other Austrian possessions in Italy.