FRANCE. [From the "Times"]

New Zealander, Volume 8, Issue 669, 11 September 1852, Page 4

FRANCE. [From the "Times "]

How ever ' 'rongly we ma\ ho disposal] to condemn the pol if ic-.ii .ictioiis by which Louis N.'|»oleon hns obtained, and is now en fon ing his power, his measures of autocratic legislation on main impoil.mt subjects of .-.ocialand financial economy will I) 'leafter In 1 renieiubcied as a yet moie calamitous and disgraceful portion of his administration. The Moiute/ir contains '' ;1 JTJ T n^ 01 ' 'Xv? f'rt'sh sp.-cimcns of these organic la.\s d'-eply alfcctiug tlio independence of the judicial body, the liberty of public instruction, and ilu; public credit of the nation ; and, although sue!) laws in. ly be less startJill" tli.m the abrupt violence ol a u/'pd'ilid the)' are infinitely nioie destructive ; they ovuthiw the hest established principles and institutions oi" the country, and they carry tho ravages of the revolution iido the very heart of society. Among these pi oj eels which have long- been cnterlained by M. Bonaparte, and aro now brought to light invested with the absolute .iiithoiity of a sole and irresponsible legislator, the decree establishing companies for the extension of landed credit (credit fovuo ) i^ one of the most significant. It professes to .illord a remedy to one ol tho greatest social evils of France — namely, the ccces a ivc amount of oncinnbinnco on land at an inordinate r,'(e of inteiest ; and it revives, for this purpose, one of tho most dangerous expedients of the revolution — namely, a species oi paper, currency, representing claims on land, and, consequently, nearly allied to tho system of inconvertible assignats. Tips remarkable, decree provides that it shall be lawful for theCiovornment to authoiise certain companies to advance money on landed .security, at rates of interest not exceeding 5 per cent., but with an additional payment of from 1 to 2 per cent, in the nature of a sinking fund for tho extinction of these loans. These companies are to ' h.i\e the power ol issuing land-notes, or letters of j pledge, not exceeding in amount the value of tl\e \ funds advanced on this species of mortgage. These notes may he lor any amount exceeding JOO francs, and wilt be either payable to bearer or easily negotiable. Tho (joveiumenl will ever)' j year vote a certain sum of money to he advanced on these .securities, and for the present the sum j oi 10 million francs, being part of the spoil of the house of Orleans confiscated by the decree of the 22nd January, is to be devoted to tho commence- j mont of tho undertaking. It is hoped that private capital will How into these loan societies on .such terms as to facilitate the advance oi capital on land, while a fair profit remains to the shareholders. Tho security is to be enforced by a summary process of sequestration and foreclosuie, which introducc.su very considei able innovation into the law of mortgage in France, and affects not only the express enactments of the civil code but the enormous interests which have grown up under it. The indirect consequences of such an •arbitrary change in the civil law of France must be incalculable, but we shall confine our remarks to the more direct and immediate results of such a measure. The scheme known in France under the name of credit fonder y and realized by this decree, is by no means new. It was one of the dangerous popular delusions presented to the Constituent Assembly of 1(Mf», and rejected after full inquiry and debate by that body ; for it was held at that time by the nio^t eminent financial authorities of Fiance, that no other -cheme could lead so surely to the mill of the count r)', and none hettoi" deserved to be denounced as '" execrable." The speech delivered by M. Thiers on this proposition on the iOtb of October, IJMB, was a ln.ijtiM'piwo of lucid reasoning". It prevailed over tho passions of the democracy and the ignorance of the House, and once moie avei ted from I' 1 ranee the disasters of .in issue of paper money. There is hardly any pojtion of that speech which i:i not equally applicable to the measures now suddenly invested with the full authority of the law. A considerable difference exists in the estimate of the actual amount of landed encumbrances in Jl'ranee.J 1 ' ranee. According to the Movilcur theie me registered mortgages to the amount of 14 milliards of francs, or 5(50 millions sterling ; but of thcne, (> milliards must be abated for charges paid oft", though not removed from the register, and for charges in the mtturo of settlements for married women and children, uhich are not debts hearing interest in the pioper sense of the words. There remain {} milliards of mortgage debts, or 320 millions sterling, and these bear an annual interest of (540 million francs, or to millions sterling- ; for it results from an inquiry conducted by the (Jonccil d'Ktnt in "IJwO, that the average rate of interest on those loans is \\ per cent. The calculation made by M. Thier.un his speech in lfl'lB is far below the amount now put forth by the Monileur. No computed the actual amount of debts on land bejuing- interest at not more than four milliards and a-half, or lttO millions sterling, and he maintained that the annual charge of this debt amounted, not, as had been said, to a third, but to 1-l7lh of the total annual value of the soil of France. Probably both these calculations are exaggerated in opposite directions ; but the burden oi this debt is undoubtedly enormous, and it is Further aggravated in France by a direct tax on the land of J2 millions sterling to the revenue of the State. It is not by the large landed proprietors that these prodigious liabilities have been contracted ; neither is it for the improvement of lands by increased capital that these advances have 'been made. Generally speaking, money is taken up on mortgage by the small peasant proprietors on ruinous terms, and their object is not so much to improve the cultivation of what they have already got as to gratify the passion for the'acquisition offrefh patches of the soil. The nature of this ruinous speculation may be perfectly understood when we add that laud in, France at, fos present price barely pays 3 per cent., and that 8 per cent, is officially declared to be the average price of the loans contracted by the small proprietors to obtain the means of purchasing it. lint, if these unfavourable and extortionate conditions are insufficient to repress the passion or the necessity Avhich drives the small proprietor of Franco to mortgage his scanty parcel of land, so as to reduce bis own means of subsistence to the mere difference between the interest he has to \nxy and tho value of the produce be can obtain by bis labour, it becomes highly questionable whether any urlHuial facilities given to the mouey-iuaikot will not rapidly aggravate this evil. The .scheme is one avowedly "intended to lower tho vato on which money may be obtained by tho people, but that will only be to increase the demand lor such accommodation, and to extend the general indebtedness of the community. But the means restored to to accomplish this wnpose arc still more reprehensible. In some lorin or other this assistance to .1 paitcular branch of property and industry must be drawn from the general taxation of the country, or, as in this instance, lrom spoliation. -I3oth these appropriations are unjust. To disguise, tho difficulty those landJoan societies aie converted by this decree into veritable banks ol isuie, with power to (hculate their paper in notes as low as £1 in value, and with no other convertible capital but that which they will h.ivo invested in th"si hypothecations. A ni ore faulty ba is for so important n financial operation cnih'ndly bo conu'iwl, or one moro e'-itain tv )i\u\ to mil). We s-<i_> nothing of the efh'i td of such n measure on Hie interests which have grown up under the existing law of mort-

gage in France, because it is evident that no funds which either the State or private companies are likely to command can operate to reduce the rale of interests on contracts to so enormous an extent. To produce any serious effect at all, and to admit of an)'- general conversion of existing mortgages into these sinking annuities, the issue of paper must be extremely vast; and in that case it would he so rapidly depreciated that the object would cease to he attainable. In every point of view such a scheme i* equally mischevious : and the least liuluvotirablo opinion we can form of it is, that it \wJl probably fail altogether, and never obtain the support of the capitalists of France, fried on a small scale, it will simply prove an illusion mid a failure ; extended to larger proportions, its disastrous oflocls would increase with its extent ; the proprietor of land would first be alluicd by cheap advances, and then ruined by .sequestration and foreclosures, the community at large would find themselves possessed of a new and suspected euneney in the .shape of loan-notes issued by private land" companies, and the credit of the nation and the security of property would eventually be shaken by the fulfilment of a project which is at variance with eveiy principle of political economy or financial science, and copied from one of the chief absurdities of Socialism and revolution.