23 NOVEMBER 1861, Page 8

FRENCH FINANCIAL DIFFICULTIES.—OVER- SANGUINE EXPECTATIONS.

IT is of the greatest importance that the public should not form any exaggerated or delusive estimate of the designs and promises of either the Emperor or his new Finance Minister. We must not mistake either what M. Fould says or what Louis Napoleon means. We must be on our guard against jumping to the conclusion, as some of our contemporaries seem inclined to do, that a new era of economy and constitutionalism is about to be inaugurated for France, that henceforth the revenue will be made to balance the expenditure, or the expenditure be cut down to the limits of the revenue ; that the people through their bond fide representatives will be suffered to determine how much shall be raised, and how much shall be spent ; that extravagant outlay will be sternly checked, and ministerial jobbing resolutely abandoned ; that army and navy will be kept within bounds, and the reign of retrenchment, peace, and purity begin in earnest. We believe none of these things ; and woe be to Europe if Europe believes them !

We do not mean to insinuate that the Emperor does not seriously intend in some measure to turn over a new leaf. We do not mean to affirm that M. Fould does not intend to control the finances of the country with a far tighter hand than has been exercised over them hitherto. But we doubt the power of the servant, and we doubt the extent and the endurance of the master's repentance and determination to reform. We question, indeed, whether either he or his Mi- nister will find it possible to do even as much as they honestly wish and deliberately intend. We are not surprised that Louis Napoleon has taken fright. There was enough in the state of affairs to appal a stouter heart and to shake a firmer seat. A bad harvest is a grievous terror to any ruler, especially to the ruler of France. A stoppage of trade is a public calamity and a public peril to any country, and is especially so to France. Financial diffi- culties and deficiencies are hard to meet everywhere, but doubly hard under a system where so much is unsound and artificial as in France. Nowhere else has the people, from the highest to the lowest, been so habitually and per- severingly taught to look to the Government for aid under every pressure ; to thank Government for every blessing ; to curse Government for every suffering. Nowhere else does privation so immediately, so surely, so logically lead to poli- tical disturbance. In England when the operative or the labourer has had no breakfast, and expects no supper, he makes shift with a dinner only ; he obtains credit from the shopkeeper; he applies at last to the relieving officer. In France, he insists upon employment from the Government; he breaks open a baker's shop ; in the last resort he gets up an emeute. Now, the position and the prospects to be faced at the present moment by the Imperial Master of this ex- citable and turbulent race are these. An enormous—an un- precedented—population of workmen has for some years past been withdrawn from productive to unproductive occu- pations. The wages to pay these workmen have been obtained by the municipal or the central authorities by borrowing in a style of unusual recklessness and persistence. The defi- cient harvest has been met by large importations, the payment for which has caused considerable monetary disturbance and embarrassment. The suffering conse- quent on the deficient harvest has been partially mi- tigated in Paris by the unsound and costly process of forcing the bakers to sell bread below its natural price, and artificially indemnifying them for the loss. The stoppage of exports to America has thrown half Lyons out of work. The stoppage of imports from America has thrown half Rouen and the Alsace out of work. These men must be employed, or fed without employment. For a long time the prices of all necessaries of life have so enormously and con- tinually increased, that all persons in the middle and upper classes, with fixed incomes, are suffering what is habitually poverty, and often actual privation ; and we know how many families in France are dependent upon fixed incomes,low small these incomes generally are, and how common it is to live close up to them. In short, all classes are enduring pressure, and many classes are enduring want. In addition to all this, winter is coming on, when men's necessities in- crease, and men's earnings unavoidably diminish. Lastly, the Emperor has launched out into vast naval expenditure, which it will be mortifying in the extreme, if not difficult, to check; and he has kept on foot an enormous army, which cannot be disbanded or materially reduced, without creating great discontent, which only murmuringly remains idle, yet which he cannot employ without a costly and hazardous European war, and which is one of the heaviest burdens on the country, and one of the surest sources of the present crisis.

At this conjuncture be is suddenly awakened by his finance Minister with the news that they are aground. He rouses himself to face the facts ; and finds that since the beginning of his reign, ten years ago, he has added a hundred millions to the funded debt ; that nearly all of his Ministers have been as reckless spendthrifts as himself; that he has already laid hands upon every store that could be confiscated, and every coming resource that could be discounted ; that in the last three years he has spent 398,000,000 franca more than has been regularly voted or allotted ' • that his actual deficit at this moment, the accumulation of wasteful years—(not, as the Times fancied, the produce of a single year)—exceeds 40,000,0001. sterling; and, to crown the whole, that there is actually not money in the Treasury to pay the national divi- dends that fall due in January. No wonder the Emperor was startled. No wonder he saw that some decisive and courageous step must be taken, to avoid the abyss on the edge of which he was standing. Money must be had at once, and at any cost ; money could only be had by a fresh loan ; and a fresh loan could only be obtained, on reasonable terms, by some measure which should restore public confidence and excite public enthusiasm. Louis Napoleon, in spite of his incipient blunders and his habitual hesitation, is both a sagacious and a bold man in extremities ; and in this extremity he was sagacious and bold enough to determine that the most frank and full statement of the case was the most likely proceeding to win trust, and a generous surrender of prerogative the most likely proceed- ing to conciliate popularity. Accordingly be directed M.

Fould to resume his post and make a public confession of past enormities ; and he proclaimed that he would abandon his undoubted right of opening " supplementary credits,"- i. e. of directing the expenditure of indefinite millions which the Chamber had not voted, and which the taxes and autho- rized loans did not provide for. He has done cleverly ; we may even say, he has done wisely and honourably. But let us look below appearances, and see what these things really mean and implicitly involve. The facts are these—without entering into details (which would only confuse the argument), and without vouching for the precise accuracy of our figures (which no man accustomed to deal with the intricacies of French finance would willingly venture). Including loans, funded and unfunded, irregular acquisitions, and present deficit, the Imperial Government has spent in the last ten years of its existence nearly, if not quite, one hundred and fifty millions sterling beyond the produce of the regular revenue. That is, the expenditure has exceeded the taxes by nearly fifteen millions sterling annually on an average ;—or, if we leave out, as perhaps in fairness we ought to do, the expenses of the Crimean war, which even we partly provided for by loans, the annual excess has been nearly six millions. In order, therefore, to rectify the position, and retain it in a rectified position, i. e. to start fair, and to equalize the Revenue and Expenditure for the future, it is obvious that not only 40,000,0001. must be sooner or later borrowed, but that either the future expenditure must be reduced by six millions, or the future taxation must be increased by six Oilliens ; or there, must be a reduction of outlay and an augmentation of receipts amounting together to six millions a year. Now, who is there, at all acquainted with the State of France, who believes all or any of these measures to be possible, who thinks that the Em- peror either really intends them, or would be able to effect them if he did ?

The ordinary revenue of France, like that of all countries which are tolerably industrious and prosperous, increases progressively year by year; but this increase, we believe, rarely averages more than half a million annually—a sum scarcely more than sufficient to meet the augmenting interest of the public debt. The imposition of new taxes, or the increase of existing ones, has always been the one thing in France which even the moat powerful and popular Govern- ment has never dared to venture, or has repented if it did venture. The attempt to lay on the " 45 centimes" on the direct taxes, was the measure which more than any other contributed to discredit and upset the Provisional Govern- ment of the last Republic. We may feel pretty certain that the Emperor will not dare to impose any fresh taxes—any at least which shall press, however gently, on either the agri- cultural or the operative classes. if he ventures on any, it will be a "graduated income-tax," bearing on the wealthier classes only; i. e. a sort of "benevolence," or modified and disguised confiscation ; and we greatly doubt his risking even this.

Will he, or can he, so far reduce his expenditure as to bring it within the limit of regular and legitimate income of the country ? There is some confident talk of a meditated reduction of the army—bond fide in fact,—and on an exten- sive scale. But when particulars are condescended to, this reduction resolves itself into simply giving 50,000 or 100,000 soldiers a year's furlough, during which time, we presume, they will be on half-pay. But this involves no real diminu- tion of the' available military force of the empire, so can afford no valid security to Europe for peace,—seeing that every one of these men can, at a few days' notice, be sum- moned back under his standard. It includes no reduction in the number of officers, a figure which is in fact decided by the number of youths who annually enter the military schools, and are thenceforward sure of their commissions. It can, therefore, effect only a very trifling relief to the finances—a relief to be measured rather by thousands than by millions. A cessation of the expenditure in the naval dockyards would, no doubt, produce an immediate and very decided reduction in the outlay ; but we have as yet no intimation of such a design being seriously entertained, and we confess we do not anticipate it. The stoppage of all unnecessary and unpro- fitable public works—a temporary suspension of the building mania—would close one of the most wasteful of the channels in which the wealth of France has for some years been squandered ; but, in the first place, the relief thus afforded would be given rather to the municipal than to the Govern- ment finances ; in the second place, we apprehend it would be about the most difficult and dangerous, and is therefore the most unlikely, effort of economy which the Emperor could select ; and, in the third place, considering the pro- spect of trade and employment, and the price of food during the coming winter, we should rather expect to see this branch of expenditure.augmented than reduced. In a word, and to sum up the whole, real retrenchment in any direction will be so difficult, so perilous, or so unpalatable, that we cannot believe it is either honestly designed, or will be truly carried out.

We are equally incredulous as to the completeness and good faith of the alleged intentions of conferring on the Corps Legislatif any actual control over the Imperial ex- penditure. The mere abandonment of the transparent autocracy of "supplementary credits" will do nothing or next to nothing. The suggested modification of voting budgets by sections, instead of by ministries, will do nothing or next to nothing. Far wider and more radical changes are required before the people can in any sense, or in any, degree, be said to hold the purse-strings of the nation. Two only we may name; and no hint has yet been breathed of the slightest intention of introducing either. The legisla- tive body must have the privilege of amending or objecting to any item in the Budget, without the previous permission of the Conseil d'Etat; and the Government must cease to interfere with the election of Representatives. Last year this inter- ference was more universal, more cynical, more oppressive, than on any former occasion. The Chamber is at present a mere mass of Government nominees, and we see little pro- spect of its becoming anything else. Yet the Government dares not entrust this Nominated Chamber with the boat fide control over the Budget, and has not taken any real and effective step in that direction. Nevertheless, it is possible enough that the appointment of M. Fould, and the promised senatus consultum of this Emperor, may throw dust enough in the eyes of the FrenclA public, to enable a new loan—if an open one—to be con- tracted on tolerably favourable terms. It is reported that- M. Fould intends for the' present to carry on without a loan. If so, this can only mean that he intends to issue a further amount of Exchequer Bills, or Treasury notes—in other words, to increase the unfunded instead of the funded debt, that is, the unauthorised in place of the acknowledged obligations of the Government. A curious way of com- mencing a sounder and franker system of finance !