22 JANUARY 1853, Page 12

TOPICS OF THE DAY.

THE MONEY PANIC IN PARIS.

THE present Government of France is not only incapable of giving security to property under its influence, but its influence actually menaces the security of property—nay, has seriously damaged it. The alarming fall in the price of stocks on the Bourse, which

• commenced last week and has continued this week with a sudden -relapse after a trifling recovery, is a great practical confession, in -the language of the money-market, that the Government in Paris is not safe. The contraction of the Bank-of-England discounts last week, succeeded by a fresh contraction this week, corroborates that declaration in Paris by the corresponding declaration of our own money-market, that it is not safe to have financial dealings with France. We may put a broad interpretation upon these elo- quent facts, but it is one in the spirit of truth. The actual state of financial affairs in France, closely connected as they are with the principles of the Government both at home and abroad, is in striking contrast with the promises held out some two months back. It is not long since the journals of Paris were boasting of the magnificent improvements in their city.. It is not long since the Emperor decreed to himself, through his Senate, a civil list of 1,000,000/. sterling. It is not long since he established banks for the aid of agriculture in the provinces of France ; and in Paris his bank of moveable credit for the purpose of giving new expansion to the operations of the money-market, including a direct assistance in continuation of time bargains ; and the exten- sion of railways in France has in this very week been a matter of boast. France, it was said, had less than 3700 kilometres of rail- ways, while England had more than 11,000; but since the notable 2d of December all has been changed—nearly 3000 kilometres have been added to "the lines already conceded," and the works are urged on with extraordinary activity.

Now all is changed, however, in other matters also. The credit of the Government stocks, to keep up which such great sacrifices have been made, is gone ; as the Bourse confesses by its fall of 2 or 3 per cent last week, followed by a fall of 2 per cent this week, while the value of railway shares falls 15 per cent. We have known fluctuations not less striking in our own lawful money- market ; but there is a context to these " quotations " from Paris, which explains the alarm they excite. The banks of credit are an incubus which the moneyed men of Paris do not like to talk about ; and grave fears are entertained even for that well- established institution the Bank of France. Not without reason. It is observed that while the stock of bullion has decreased, by steady monthly abatements, to the extent of more than 4,000,000/. sterling since September, its bills discounted have increased within the same period by nearly 5,000,000/. sterling ; and this has gone on for four months ! The change in the financial aspect of the Bank had been preceded by a change in its management that ren- dered it more pliant under the influence of the highest personage in the state. Worse remains behind. It was reported last week, that a person high in the Government—generally understood to be Marshal St. Arnaud —had been deeply implicated in stockjobbing: the report was denied on authority ; but so little credit has the Government for veracity, that the denial was accepted as a species of circumstantial evidence in favour of the report, and the funds continued to fall in spite of these somewhat undignified efforts to maintain their value. This week another person high in the Government, the Due de Bassano, has been posted in the Bourse as a defaulter ; nor does he stand alone.

It is not to be supposed that the whole of the mercantile com- munity of Paris generally is implicated in the illegitimate tamper- ings with the money-market ; but so complicated is the arbitrary Government of France with the commercial and social proceedings of its own subjects, that it is impossible to extricate the honest and substantial part of business from that which is dishonest and fraudulent. The state of railway property furnishes an illustra- tion worth pausing upon for a moment. There is no question that the actual increase of traffic in France, supported by the example of England and Belgium, would warrant an expansion of the rail- way network ; which has accordingly been extended, in pro- jects, since the close of last year, by 3000 kilometres,—nearly doubling the previous extent. Let us explore one project. The first general meeting of shareholders in the Cherbourg line was held in Paris on Saturday last ; several Viscounts and other Directors being present, with Count du Chasseloup-Laubat in the chair. The shareholders were not unanimous, and in the course of the squabbling some curious allegations were made. One was, that the Cherbourg line could not have been established, although it has large subventions from Government, without the patronage of the Rouen pompan . We notice active at this meeting in favour of the scheme M. Benoist d'Azy, the originator of the amalgama- tion of lines connecting Paris with the Mediterranean. Now Cher- bourg is prominent in the notice of the world at present for uniting several projects of Napoleon III. It is one of those impregnable ports which are to harbour his twenty new line-of-battle ships, with his thirty-three frigates and other vessels, all propelled by screw machinery. It is to be the starting-point for the line of steamers which is to connect Paris, the West Indies, and French Guiana. Now let us review the facts thus brought together : the directors of this railway are directors in other schemes, drawing salaries from each ; they obtain certain " concessions " from the Government; among the concessions is the Cherbourg line, to be

constructed at a present loss; but that line subserves the warlike, steam-navigating, and colonizing projects of Louis Napoleon. Here, then, are commercial men, agents for commercial clients, closely cooperating with the wild schemes of the grand adventurer, and if not incurring a certain loss to obtain that alliance, yet speculating on the success of those schemes for their ultimate return. Judging from the facts stated at the meeting, the en- tanglement of this commercial enterprise with the Government appears to us to be complete. It is no wonder, then, that since Government credit is called in question, railway property begins to decline at the rate of 15 per cent for the first tumble. Of course there are sound railway enterprises ; but how is the capitalist, mystified by the proceedings of directors acting in such alliance, to distinguish between the sound and the unsound? This railway example may be applied to other species of enterprise and of pro- perty in France.

We are not stating an opinion of our own, we are simply noting facts that appear on the surface ; and if we are citing any opinion, it is that practically expressed by the monied men of Paris and London in the quotations at their respective Exchanges. A corre- spondent challenges our fairness, because, writing with the an- nouncement of the Morning Herald of last Friday before us, pro. claiming the "alarming state of the Bourse, continuance of the commercial panic," we took note of a decline in the value of French stocks though we had not previously noticed correspond- ing rises. We should have noticed any rise that had the political importance which this sudden fall possesses. We have not been unobservant of the progressive advance which our correspondent notes in the price of the Three per Cent Bente& Be tells us, that "on the 24th November 1851, they stood at 56; on the 24th De- cember three weeks after the. coup cretat, at 66; and under the Empire, last week, at 80." But what then ? Just before the coup d'etat, Louis Napoleon had been filling Paris with fears, and every- body knew that the Republican Government, though not yet over- thrown by arms was practically dead. After the coup d'etat, it was at least determined what sort of Government there should be ; and under the Empire, the devices to keep up quotations are the very subject in question. But we are perhaps attaching undue importance to the judgment of a correspondent who, with touching naïveté, signs himself "A Holder of French Railway Shares." There is no occasion, indeed, to exaggerate the blame ascribable to the present Government in France. A disordered state of finance, and uncertain state of property, are inherent in the nature of all transitory governments. A practical instance of their in- capacity to convey a reliable title to property is shown in the dis- pute which has been going on between Englishmen and Americans respecting the title to the land for the Tehuantepec transit; a title which had been ceded to °array by one Government, and to English capitalists by another, so that now nobody knows who is the real owner. The purchase of property in France at the pre- sent time may be regarded as the purchase of a probability, and its market-value will depend upon the general impression as to the chances of duration for the present regime: but it is a matter of guess. The dealing in such property is, for foreigners at least, gambling: the natives cannot help themselves ; though, if they have judgment, they will trust their capital anywhere rather than in their own country. The very fact that adventurers capable of discreditable dabblings in the public funds hover around the Chief of the State, is but another incident of revolutionary and usurping governments. The case is not worse than that of any South Ame- rican Government.

All this is well understood in our own money-market. We doubt whether capitalists are very deeply involved in a direct way. Probably it will be found that none of our principal houses are under liabilities on account of Paris ; if ever they had any such liabilities they have all backed out in time. Capitalists of a minor grade, indeed, may have been unable to extricate themselves from the dangerous connexion ; and the most legitimate commercial trans- actions in France are inscrutably complicated with the most ille- gitimate. Thus our own houses having any dealings whatever with France, must be prepared for some irregular results. The con- traction of our Bank discounts must be regarded in great part as a precautionary measure against the consequences of such connexions. We believe that the extent is proximately known, and that the precaution is sufficient. The financial credit of the French Govern- ment, or of its clients in the commercial world, is not likely to be enhanced by the fact, that although bankrupt in some of its schemes, it is now resorting to new projects, such as these warlike extravagancies and this Transatlantic enterprise in steam naviga-

tion. It is no doubt inherent in the nature of such a Government, that on the failure of one project it should seek to sustain its in- fluence by resorting to others. But the Multiplication of new schemes only tends to corroborate the practical declaration already made in the declining quotations of its Bourse. It is a scheming Government, already beginning to show signs of a break-down, and throwing out its hands to grasp some new stronghold. France is a great country, and when she is sinking she is likely to clutch those nearest to her in a manner very dangerous. 'Under such cir- cumstances, prudent men will stand as far aloof as possible.