The new French Bank act, and the resignation of Count
d’Argout, the Governor of the Bank, are 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,’ 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 irrétrievable ruin; he

“ Financial aristocracy.— Ed.

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 fiancs, 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 Légistatif** 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 which 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 cn 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 Reproduced from the New-York

Daily Trib

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”