Karl Marx

The French Crédit Mobilier [Second Article]

[New-York Daily Tribune, No. 4737, June 24, 1856]

It should be remembered that Bonaparte carried out his coup d’état under two diametrically opposed pretexts: on the one hand he proclaimed that he was charged with the mission of saving the bourgeoisie and “material order” from the red anarchy which was to be let loose in May 1852, and on the other, that he must save the working class from the despotism of the bourgeoisie concentrated in the National Assembly. Moreover, he was personally compelled to pay his own debts and those of the respectable mob of the Société du Dix-Décembre, and to enrich himself, and them likewise, at the joint expense of the bourgeoisie and the workers. The mission of this man was, it must be admitted, fraught with contradictory difficulties, for he was forced to appear at once as plunderer and as patriarchal benefactor of all classes. He could not give to one class without taking from another, and he could not satisfy his own desires and those of his followers without robbing both. At the time of the Fronde, the Duke of Guise was reputed the most obliging man in France, because he had turned all his estates into obligations held by his partisans. In the same way, Bonaparte also intended to become the most obliging man in France by converting the whole property and the whole industry of France into a personal obligation to Louis Bonaparte. To steal France in order to buy France – that was the great problem which this man had to solve, and in this transaction, in which France was to be taken and then given back to France, not the least important side for him was the profit which he and the Société du Dix-Décembre could skim off. How were these contradictory claims to be reconciled? How could this delicate economic problem be solved, how could this complicated knot be untangled? All of Bonaparte’s varied past experiences pointed to the one great resource which had helped him over the most difficult economic situations – credit. And as it happened, in France there was the Saint-Simon school, which at its beginnings as at its decline had indulged in the dream that the whole antagonism of the classes must vanish if a general prosperity were created through some ingenious system of public credit. And Saint-Simonism in this form had not yet died out at the time of the coup d’état. There was Michel Chevalier, the economist of the Journal des Débats; there was Proudhon, who attempted to conceal the worst part of the Saint-Simonist doctrine under the mask of eccentric originality; and there were two Portuguese Jews, practically connected with stock exchange speculation and with Rothschild, who had sat at the feet of Père Enfantin and who, on the basis of their practical experience, possessed the audacity to scent stock exchange speculation behind socialism and Law behind Saint-Simon. These men – Émile and Isaac Pereire – are the founders of the Crédit Mobilier and the originators of Bonapartist socialism.

There is an old proverb: Habent sua fata libelli. Theories have their destinies, too, no less than books. Saint-Simon as the guardian angel of the Paris Bourse, as the prophet of swindling, as the messiah of universal bribery and corruption! History offers no example of more cruel irony, save perhaps the fulfilment of Saint-Just in the juste-milieu Guizot and of Napoleon in Louis Bonaparte.

Events march faster than a man’s reading: while we, on the basis of an examination of the principles and economic conditions of the Crédit Mobilier, point to the inevitable collapse already indicated by the constitution of the society, history is already at work to fulfil our predictions. At the end of May one of the directors of the Crédit Mobilier, M. Place, went bankrupt for a sum of ten million francs; only a few days earlier he had been “presented to the Emperor by M. de Morny” as one of the dieux de la finance. Les dieux s’en vont! Almost on the same day the Moniteur published the new law on sociétés en commandite, which, under the pretext of putting a stop to the speculative fever, delivers these societies over to the mercy of the Crédit Mobilier by making their formation dependent on the will of the government or of the Crédit Mobilier. And the English press, which does not even know that there is a difference between sociétés en commandite and sociétés anonymes – to which the former are thus sacrificed – goes into ecstasies over this great “clever act” of Bonapartist wisdom and imagines that the French speculators will very soon be converted to the solidity of the English Sadleir, Spader and Palmer. At the same time, the Drainage Law, just passed by the celebrated Corps législatif, and a direct breach of all previous legislation and of the Code Napoléon, sanctions the expropriation of the mortgaged debtors of the country in favour of the government of Bonaparte, who intends, by this institution, to seize the land, just as he seizes industry by means of the Crédit Mobilier and French commerce through the Banque de France; and all this in order to save property from the dangers of socialism!

Meanwhile, we do not consider it superfluous to continue our examination of the Crédit Mobilier, an institution which, we believe, is still destined to accomplish performances of which the above-mentioned are only minor beginnings.

We have seen that the first task of the Crédit Mobilier consists in granting capital to those industrial undertakings which are operated by sociétés anonymes. We quote from the report of M. Isaac Pereire:

“The Crédit Mobilier plays, with regard to the values representing industrial capital, a role analogous to the functions which discount banks perform with regard to the values representing commercial capital. The first duty of this company is to support the development of national industry, to facilitate the formation of large undertakings which, left to themselves, encounter great obstacles. Its mission in this respect will be all the easier to fulfil in that it possesses the most varied means of information and research, which are beyond the reach of private individuals, for reliably estimating the real value or the prospects of undertakings that apply for its aid. In favourable times our company will serve as guide to capital in search of profitable investment; in difficult situations it has the task of granting valuable resources for the maintenance of labour and for the alleviation of crises arising from a rapid diminution of capital. The care with which our company will invest its capital in all business undertakings only in such proportions and for such limited periods as to ensure a safe withdrawal, will enable it to multiply its activity, to fecundate a great number of undertakings in a short time, and to diminish the risk of its competition through the multiplicity of its partial commandites” (investments in shares).

Now that we have seen how Isaac develops the ideas of Bonaparte, it will also be important to see how Bonaparte comments on the ideas of Isaac. This commentary is to be found in the report of the Minister of the Interior to Bonaparte of June 21, 1854, where it says of the principles and the administration of the Crédit Mobilier:

“Among all the credit establishments existing in the world, the Banque de France is rightly considered the enterprise which can boast the most solid constitution”

(so solid that the slight shock of February 1848 would have thrown it down in a single day if Ledru-Rollin and Co. had not propped it up, for the Provisional Government not only suspended the obligation of the Banque de France to pay specie for its notes, thereby driving back the flood of holders of banknotes and bons which was blocking the streets around the bank, but also authorised it to issue 50-franc notes, whereas under Louis-Philippe it had never been permitted to issue notes of less than 500 francs; and thus the government not only covered the insolvent bank with its credit, but also mortgaged the state forests to it in addition, for the privilege of receiving credit for the state).

“The Banque de France is at once a support and a guide for our commerce, and its material and moral influence imparts a very valuable stability to our market.”

(This stability is so great that the French every time have a regular industrial crisis when America and England merely condescend to a small crash in their trade.)

“Through the reserve and prudence which govern all its operations, this excellent institution therefore fulfils the role of a regulator. But in order to bring forth all the marvels which it carries in its womb, the commercial genius needs above all a stimulus; and just because speculation in France is kept within the narrowest limits, it was no disadvantage, but, on the contrary, a great gain, when an establishment was created alongside the Banque de France which was conceived in a quite different circle of ideas, and which was to represent the spirit of initiative in the sphere of industry and commerce.

Fortunately, the model for this establishment already existed: it comes from a country which is praised for the strict loyalty, prudence and solidity which preside over all its commercial operations. The Algemeene Maatschappij der Nederlanden has placed its capital, its credit and its moral authority at the service of all healthy ideas and useful undertakings, and has laid down new canals in Holland, extended the drainage system, and introduced a thousand other improvements which have increased the value of property a hundredfold. Why should not France equally profit from an institution whose advantages have been proved by such dazzling experience? This is the idea that led to the founding of the Crédit Mobilier, which was confirmed by the decree of November 18, 1852.

This company may, according to its statutes, among other business also buy and sell government securities and industrial shares, lend and borrow on them as collateral, underwrite government loans, in a word, issue its own securities long-term up to the amount of the securities so obtained.”

Thus, she has the means in hand to bring together a considerable fortune at any moment under advantageous conditions. The fruitfulness of the institution depends on the correct employment of these capitals. In fact, the company can at its discretion invest in industry (“commanditer”), participate in enterprises, take part in long-term operations, which the statutes of the Banque de France and the Discount Bank forbid these institutions to do; in a word, it is free in its movements and can vary its action as the requirements of commercial credit demand. If it knows how to recognise the profitable ones among the constantly emerging enterprises; if, by timely intervention with the enormous funds at its disposal, it makes possible the execution of works which are in themselves highly productive but require an unusually long time and would otherwise languish; if its co-operation is the sure sign of a lucrative idea or an excellent project, then the Société du Crédit Mobilier will deserve and win public approval; available capital will seek out its channels and will turn massively, and ever more, to where a secure investment offers itself under the patronage of the company. Thus, this company will co-operate in all ideas of general utility, more by the power of example and by the authority that will attach to its support than by any material help. In this way, it will enormously promote the efforts of industry and everywhere stimulate the spirit of invention.

We shall show on the next occasion how all these high-sounding phrases merely weakly conceal the simple plan to draw the whole industry of France into the whirlpool of the Paris Bourse and make it the plaything of the masters of the Crédit Mobilier and their protector Bonaparte.

Written around 12 June 1856. From the English.