No argument can be required to prove that the precarious
tenure of power by which Louis Napoleon still calls himself the
Emperor of the French, must be seriously affected by the
culmination in France of the commercial crisis which has already
spent its fury in other parts of the world. The symptoms of this
culmination are now chiefly to be found in the condition of the
Bank of France and of the French markets for agricultural
produce. The returns of the Bank, for the second week of
February, as compared with those of the last week in January,
exhibit the following features’:

Decrease of circulation ..............ccccccccsecsssceeeceeeceeces francs 8,766,400
Decrease in-de Posts. sécsciveyeciiastsacescuscsveasteasesan vias « 29,018,024
Decrease of discounts at the Bank ...............cceeeeeee 47,746,641
Decrease of discounts at the Branches ................. 23,264,271
Total decrease in CiscOUNtS ..........ccccceccececeeeeeeeenees 71,010,912
Increase in bills overdue ...............cccccceeeceeeceeeesseeees 2,761,435
Increase in bullion ..............cccccceccceeeceeeesennssceceeeeees 31,508,278
Increase in premium on purchases of gold and

SUVOT wos soaceescecbscieees doesent ete ie eds a Mdeaweceadessdeceeee 3,284,691

Throughout the whole of the commercial world the metallic
reserve of the banks has increased :s the activity of trade has
diminished. At the same ratio that industrial life has grown
fainter, the position of the banks has, generally, grown stronger;

a Here and below see “Situation de la Banque de France et de ses succursales”,

and so far the bullion increase in the vaults of the Bank of France
would seem but one more instance of an economical phenomenon
observed here in New-York as well as in London and Hamburg.
Yet there is one feature distinctive of the bullion movement in
France, viz.: the increase to the amount of 3,284,691 francs of the
premium on purchases of gold and silver, while the total sum
spent in this way by the Bank of France for the month of
February reaches the figure of 4,438,549 francs. The gravity of
this fact becomes evident from the following comparison:

Premiums paid by the Bank of France
on purchases of gold and silver.

PER Ua i COR acaacalsescussnig crutch outauhataninngaere mean weyacur francs 4,438,549
PAMMATYy LEDS sale caniets teoseeccaeleca pia eertneoones 1,153,858
December, [S57 saccincsssctieideeeieGediedeacwaiaatiane 1,176,029
November, 1857 .o..cccccccccecccecccecececceccecccvecceseeeeeseenes 1,327,443
October, TBD 7 esccsccsctuescka teense beth ahi davses dea soea aeehen 949,656
Ist January to 30th June, 1856 oes 3,100,000
Ist July to llth December, 1856 00.00... eens 3,250,000
Ist July to 31st December, 1855 oo... eee 4,000,000

Thus we see that the premium paid in February to procure
temporary artificial additions to the bullion reserve of the Bank
amounts to a sum almost equal to that expended for the same
purpose during the four months from October, 1857, to January,
58, and exceeds the aggregate half-yearly premiums paid during
the vears 1856 and 1855; while the total amount of premiums
paid from October, 1857, to February, 1858, reaching the figure
of 9,045,535f., exceeds the premium paid during the whole year of
1856 by almost one-half. Despite this apparent plethora, the
metallic reserve of the Bank is, consequently, really weaker than
for the last three years. So far from the Bank being incumbered
with bullion, the influx is only artificially raised co its necessary
level. This single fact proves at once that in France the commercial
crisis has not yet entered the phase already passed in the United
States. England, and the North of Europe. In France. a general
depression of commerce exists, as is shown by the simultaneous
decrease in circulation and discounts; but the crash is. still
impending, as is shown by the decrease of deposits simultaneously
with am increase of premium on bullion bought, and of bills
overdue.

The Bank has also been forced to announce that a great part of
iis Own new shares, on which the installments have not been duly
paid up, will be sold. It has also been converted by the

Government into the general railway contractor of France, and
compelled ‘to make within fixed periods large advances to the
railway companies—advances which for January and February
alone amounted to the sum of 50,000,000 francs. It is true that in
return for these advances it has received the bonds of the
companies, which it may sell when it can. The present moment,
however, is peculiarly unfavorable to such a sale, and the weekly
railway returns, testifying to a constant falling off in receipts, are
far from warranting any sanguine expectations in this line. For the
month of January, for instance, the Orleans presented a decline of
21 per cent, the Eastern of 18 per cent, the Lyons of about 11 per
cent, and the Western of 14 per cent, compared with the
corresponding receipts in 1857.*

It is a well-known fact that the resistance, on the side of the
seller or the buyer, against a change from low prices to high ones,
and sull more from high prices to low, is always very considerable;
and that frequently there occur intervals, of longer or shorter
duration, during which sales are heavy and prices Nominal. until at
last the tendency of the market declares itself one wav or the other
with irresistible force. Such a transitory struggle between the
holders and buyers of merchandise is nothing extraordinary; but
the protracted contest, lasting from the beginning of November to
the present day, between French merchants and French consumers, 1S perhaps unparalleled in the history of prices. While French
industry is stagnant, great numbers of workmen unemployed, and
the means of everybody stinted, prices, which have elsewhere
declined on an average from 30 to 40 per cent. are stil
maintained in France at the speculative range of the period
preceding the general crisis. If we are asked by what means this
economical miracle has been worked, the answer is simply that the
Bank of France, under Government pressure, has twice been
obliged to renew the bills and loans which had fallen due, and that
thus, more or jess directly, the means of the French people,
accumulated in the Bank vaults. have been emploved to keep up
inflated prices against that very people. The Government seems to
imagine that by this exceedingly simple process of distributing
bank notes wherever they are wanted, the catastrophe can be
definitively warded off. Yet the real result of this contrivance has
been, on the one hand, an aggravation of distress on the part of
the consumers, whose diminished means have not been met by
diminished prices; on the other hand, an enormous accumulation

a The Beane No. 754, February 6, 1858.— Ea.

of commodities in the Customs entrepots, which, when ultimately,
as they must be, they are forced upon the market, will collapse
under their own weight. The following statement, extracted from
an official French paper, of the comparative quantities of
merchandise stored up in the French Customs entrepots at the
end of December, 1857, 1856 and 1855, will leave no doubt as to
the violent self-adjustment of prices still looming in the future for
France *:

1857 1856 1855
Metrical Metrical Metrical

qus.” quls. qus.
COCOA ssecsci lessee teed: 19,419 17,799 10,188
O56) 5 (ee 210,741 100,758 57,644
Cotton ...........ccscceeeeee 156,006 76,322 28,766
COPPel™ secccenspactshicadss 15,377 1,253 3,197
ANY shinee eaveecnciee 4,053 1,853 1,811
Cast-Iron .........0.0.0.0 132,924 102,202 76,337
Oleaginous Seeds ..... 253,596 198,982 74,537
"LAM OWS iviieisiors cei ees 25,299 15,292 11,276
Indigo .......eeeeeseceeeeeee 5,253 2,411 3,783
WOO) Jattcacectes eects 72,150 31,560 38,146
PEDDER i stiitienereccases 23,448 18,442 10,682
Sugar (colonial) ........ 170,334 56,735 55,387
Sugar (foreign) ........ 89,607 89,807 71,913

In the trade in bread-stuffs, however, the contest has already
terminated with disastrous consequences for the holders. Still their
losses are of far less importance than the general state of the
agricultural population of France at the present juncture. At a
recent meeting of French agriculturists it was stated that the
average price of wheat for all France was 3lfr. 94c. the hectolitre
(about 2°/, bushels) at the end of January, 1854; 27fr. 24c. at pe
same epoch in 1855; 32fr. 46c. in January, 1856; 27fr. 9c.
January, 1857, and 17fr. 38c. in January, 1858. The unanimous
conclusion arrived at was that

“this state of prices must prove ruinous to French agriculture, and that at 17fr.
38c. the present average price, the producers in some parts of France have an

extremely narrow margin of profit left them, while in others they sustain a serious
loss."

a The Economist, No. 754, February 6, 1858. (The Paris correspondent said that
the information had been taken by him “from an official paper” .)— Ed.

6 Metrical quintal—a unit of weight equal to 100 kilograms.— Ed.

© The Economist, No. 755, February 13, 1858.— Ed.

One would think that in a country like France, where the
greater part of the soil belongs to the cultivators themselves, and
but a relatively small portion of the aggregate produce finds its
way to market, a superabundance of grain ought to be considered
a blessing instead of a bane. Yet, as Louis XVIII. told us in a
crown speech on Nov. 30, 1821: “No law can prevent the distress
resulting from a superabundant harvest.”* The fact is that the
large majority of the French peasantry are owners in name
only—the mortgagees and the Government being the real
proprietors. Whether the French peasant be able to meet the
heavy engagements weighing on his narrow strip of soil depends
not on the quantity, but on the price of his produce.

This agricultural distress, taken together with the depression of
trade, the stagnation of industry, and the commercial catastrophe
still in suspense, must tend to bring the French people into that
state of mind in which they are wont to embark in fresh political
ventures. With the disappearance of material prosperity and its
regular appendage of political indifference, every pretext for the
prolongation of the second Empire also disappears.

Written on February 12, 1858 Reproduced from the newspaper

leading article

* Louis XVIII’s speech in the Chamber of Deputies on November 30, 1821,
Le Moniteur universel, No. 335, December 1, 1821.— Ed.