home | authors | books | about

Home -> Orville Marcellus Powers -> Commerce and Finance -> Chapter VIII

Commerce and Finance - Chapter VIII

1. Chapter I

2. Chapter II

3. Chapter III

4. Chapter IV

5. Chapter V

6. Chapter VI

7. Chapter VII

8. Chapter VIII

9. Chapter IX

10. Chapter X

11. Chapter XI

12. Chapter XII

13. Chapter XIII

14. Chapter XIV

15. Chapter XV

16. Chapter XVI

17. Chapter XVII

18. Chapter XVIII

19. Chapter XIX

20. Chapter XX

21. Chapter XXI

22. Chapter XXII

23. Chapter XXIII

24. Chapter XXIV

25. Chapter XXV

26. Chapter XXVI

27. Chapter XXVII

28. Chapter XXVIII

29. Chapter XXIX

30. Chapter XXX

31. Chapter XXXI

32. Chapter XXXII

33. Chapter XXXIII

34. Chapter XXXIV

35. Chapter XXXV

36. Chapter XXXVI

37. Chapter XXXVII

38. Chapter XXXVIII

39. Chapter XXXIX

40. Chapter XL

41. Chapter XLI

42. Chapter XLII

43. Chapter XLIII

44. Chapter XLIV

45. Chapter XLV

46. Chapter XLVI

47. Chapter XLVII

48. Chapter XLVIII

49. Chapter XLVIX

50. Chapter L

51. Chapter LI

52. Chapter LII

Commerce Of France Continued.

Colbert; John Law; The French Revolution; Napoleon's
Policy; Recent French Commerce.

Louis XIV lived to see his kingdom torn and distracted, his
conquests lost, a large portion of his colonies in the possession
of his enemies, and a smouldering hatred for each other arise
among his subjects. Monopolies were multiplied in order to
meet the needs of the nobles, of whom there were one hundred
and forty thousand in France at that time. Together with the
clergy, they owned the best mines and farm lands; all of the
large and handsome buildings, the palaces and castles and even
the best of the movable property. They escaped taxation, dis-
dained labor and eagerly seized and consumed the hard-earned
products of the poor laborers. Under the wanton luxury of
his successor, Louis XV, silk weaving revived some-
Loufsxv what, and agriculture improved, but the country
was practically bankrupt. Farmers were nearly
everywhere poor renters of their small holdings, weighed down
by tithes and heavy taxes, while the lords lived in their castles or
in the principal towns or Paris, squandering the income wrung
from their miserable tenants.

About this time there appeared in France one John Law,
a Scotchman, who offered a solution of all the country's diffi-
culties. He proposed to liquidate the vast indebtedness with
which the ambitious schemes of Louis XIV had burdened
France. This was so enormous that the whole annual revenue
scarcely sufficed to pay the interest. He founded a Land Bank
(1716) and organized the Mississippi Company. In consider-
ation of his liquidating the public debt, his bank was made a
state institution and authorized to issue a paper currency. He
then issued inconvertible notes to the amount of the value of
John Law the land of the kingdom based upon the land itself

M^ssls^T"* 1 as a su PP osecl security. France was flooded with
Company this inflated currency. Prices of all commodities

rose, the rate of interest advanced, and stock in the bank
was in great demand. Law was able to declare a bank dividend
of forty per cent, payable in paper money. Seeing that Law was
such a remarkable financier and his bank so prosperous, the peo-
ple were eager to participate in his Mississippi scheme. The desire
to purchase shares in this scheme now amounted to a frenzy.
Enormous profits were expected to be realized by the Mississippi
Company from its supposed gold mines yet undiscovered, and
from planting and commerce. The new company grew and
expanded, absorbed the East India Company, increased its capital
stock to six hundred and twenty-four thousand shares of five
hundred and fifty francs each, and offered to lend the govern-
ment a billion six hundred million francs at three per cent.
Paris was wild with excitement. The shares in the Mississippi
Company rose in the market to forty times their par value.
Everybody seemed to grow rich. Law worked his two schemes,
the Canadian banks and the Mississippi Company, side by side, and one
helped the other. Through the bank he inflated the currency,
making it possible to float the Mississippi scheme, and as fast
as the stock of the Company was sold, the money flowed back
into the bank, enabling it to be used in making bank dividends.
Government bonds, which a short time before had been selling
at twenty cents on the dollar, so low was the credit of the king-
dom, were redeemed by Law at par, and investors became eager
to buy government securities. Land was bought and sold at
fabulous prices. New issues of paper currency continued to be
made until the total reached almost to the enormous sum of
two thousand million francs. All the while the specie was quietly
going out of France, and there was nothing but credit left as a


basis for the money circulation. Finally, after four years of
financial rioting in the wildest schemes and theories, credit
became strained to the breaking point. The bubble burst and a
panic ensued. Law became a fugitive. Ruin and despair spread
through the kingdom,, and an insurrection of the common people
was imminent, but with great difficulty was prevented. The
terrible day of reckoning had not yet come. It is a strange co-
incidence that while the Mississippi scheme was in operation in
France a similar gambling mania, in the form of the South Sea
Bubble, held possession of England, and another of the same
kind infatuated Holland. They all three collapsed about the
same time and with the same effects.

After the failure of John Law's scheme, the commerce
of the country was depressed and manufactures did not improve.
In 1756 began the Seven-years war (1756-1763) with
England, by which France lost all of her American
colonies except Louisiana. The commercial su-
premacy of Europe, and of the world, then passed
over to England. The treasury of France was
empty, the country in debt, credit gone, and the people borne
down with financial burdens. The new king (Louis XVI) was
weak and injudicious, and the queen frivolous and extravagant.
The war for American independence had been brought to a
successful issue, and had aroused the spirit of popular liberty
in France. Under these conditions the common people in 1789
rose in revenge for the wrongs they had suffered for centuries,
and inaugurated the great French Revolution.

Peaceful commerce could not exist during a reign of anarchy.
Terror made property insecure, and the wealthy fled from the
country, carrying their portable wealth with them.
Revolution ^ scarce had coin become in the first year of the

Revolution, that large issues of paper were re-
sorted to, and it was made a capital offense to refuse to receive
this at par; but foreigners were not bound by the statute, and


took from the country all of the gold and silver that was not
hoarded. The paper currency sank lower and lower in purchas-
ing power, until a pound of butter could not be had for less than
700 or 800 francs, and a pair of boots cost as high as 10,000
francs. Internal trade and manufactures were prostrated and
foreign commerce annihilated.

At this juncture Napoleon appeared upon the scene of action,
and in 1806 issued what has been called his Berlin Decree, by
which he hoped to destroy British commerce by sealing the ports
of the entire continent against English vessels. England retali-
ated by capturing French ships and colonies, and thus for several
years the ports of Europe dared not admit English vessels for
fear of the wrath of Napoleon nor permit their own vessels to

leave their moorings for fear of British cruisers.
Policy 6011 ^ ne commerce of Europe as well as England was

thus seriously injured, while the decree caused
manufactures and home industries in France to revive, in an
effort to meet the demand for goods which could not be im-
ported. Napoleon laid down the principle that France should
be self-sustaining in the production of all that was necessary
for her maintenance. He increased the duties on imported
goods, rigorously protected trade marks, and re-estab,lished
several of the old trade corporations. To supply the loss of
colonial produce, no longer obtainable from the English colonies,
tobacco and corn were cultivated, and for the purpose of making
sugar to take the place of cane-sugar, no longer obtainable from
San Domingo on account of the negro revolution, beet-sugar was
invented and the beet extensively cultivated. Cotton, linen and
woolen goods were extensively produced and manufacturers were
busy, but not having to compete with foreign imports clothing
was neither good, cheap, nor abundant. Roasted beans were
substituted for coffee, soda for potash, and bleaching, dyeing,
tanning, distilling and other arts depending upon chemistry
were greatly promoted by means of ingenious substitutes.


"To Napoleon is due the creation of Chambers of Commerce
and Manufactures, of the Conseils de Prudhommes or mixed
juries of the most skillful operators and masters for settling
industrial disputes, workmen's certificates, and the institution of a
property in trade marks. He constructed and repaired ten thou-
sand miles of roads, crossing in some instances mountains by
highways worthy of the Eomans, built bridges and canals, and
beautified Paris."

One of the beneficial effects of the Revolution was the change
in the tenure of land in France. Prior to that event enormous
estates were held by the nobility and aristocracy, which had
descended from generation to generation without division. It
was ordained that thereafter estates should be equally shared by
all the children of a proprietor dying intestate. This soon result-
ed in dividing the soil into numerous small allotments, as it is
to-day, resulting in better cultivation of the land and a more
thrifty and better contented peasant class.

After the battle of Waterloo and the final abdication of
Napoleon, it was hoped that France would see a return of peace
and a revival of commerce, but for several years in succession
her harvests were poor, taxes to defray the expenses of the
previous wars continued heavy, and the country seemed politi-
cally and commercially exhausted. Its foreign trade had been
so long lost that it had to be built up anew, and this proved a
slow process, for other nations had secured possession of the
markets. Meanwhile machinery had greatly improved in En-
gland, and its exportation being strictly prohibited by Parlia-
From ment, England was able to undersell France. But

Waterloo to the French bent their energies with vigor to the
task of building up their industries, and soon
so distinguished their wares by the excellence of their quality,
that in ten years they were abreast of their rival, England,
in many lines of manufacture and in bleaching and dyeing they
far surpassed her. In 1825 the prohibition against the exporta-


tion of British machinery was repealed, and this left the French
free to profit by English inventions. A general desire for in-
dustrial improvement seemed to pervade France, and capital
returned to the channels of industry and commerce. Silk and
cotton weaving, paper making, carpet weaving, tanning and kin-
dred arts, all became prosperous. Agriculture, however, failed
to show a corresponding degree of improvement, owing, no
doubt, to adverse or indifferent legislation. Although 53 per
cent, of the French people depended upon the cultivation of the
soil for their subsistence, wooden plowshares, harrows with
wooden teeth, and in the southern provinces, the Oriental mode
of oxen treading out the grain, still remained in use up to the
time of Napoleon III.

The policy of Napoleon III was favorable to agriculture and
commerce. He encouraged the rearing of fine draft horses and
the introduction of improved implements and methods of agricul-
ture, thus raising the tillage of the soil to a place befitting the
dignity of his empire. Unlike his predecessors, he did not
commerce regard the use of foreign products by his people as

Napoieon m prejudicial to home industries, but rather as a
1848-1870 stimulus to better skill on the part of the me-

chanics and artisans of France. Accordingly he reduced the
duties on foreign goods and especially on foreign machinery, with
a view to encouraging its importation from England and the in-
troduction of improved processes of English manufacture. The
rapid extension of the use of machinery in France under Na-
poleon III, the introduction of steam power and the invention
of the Jacquard loom* for weaving all kinds of figured goods,
gave a great impetus to the industries of the country. In ten
years, 1858-1868 the exports of France increased from 1,750,-
000,000 francs to 3,000,0000,000 francs, the effect largely of the

*Jaquard was mistreated, his looms destroyed and he finally exiled for
his invention, but he lived to be regarded as the father of modern French
industry. Yeats Vicissitudes of Commerce.


so-called Cobden treaty with England made in 1860, which
greatly reduced the duties on foreign imports.

In 1867 a grand Universal Exposition was held in Paris
by which France showed to the world what excellent progress
she had made in the arts of peace. The intelligence, ingenuity
and enterprise of her inhabitants were here wonderfully dis-
played, and it was apparent that in the production of fine silk
and woolen goods, wines and brandies, furniture, glass, clocks
The Universal aii & artistic wares, as well as in art and matters ol
Exposition of taste and education, France stood second to no
1867 nation, if indeed she did not surpass all others.

Three years after the Exposition (1870) the Franco-Prussian
war broke upon the country, resulting in the defeat of her
armies, the capture of the Emperor, Napoleon III, the loss of
her valuable provinces of Alsace and Lorraine, and the payment
to Germany of an indemnity of 5,000,000,000 francs.

Notwithstanding these disasters, the trade and industries of
France quickly revived and resumed their former prosperity.
The wonderful natural productivity of France again manifested
itself, and the war indemnity, enormous as it was, was quickly
paid. There were in 1872 more than 200,000 hand looms
besides 80,000 power looms at work in France, giving rise to a
secondary but very important industry in the con-
Recent French gtruction of their machinery. Lyons and the

Corn tncrcc

south of France produced large quantities of silk
goods, and woolens were woven extensively in the north, while
Eheims and Amiens turned out Cashmere shawls and other
textures of long-fibered wool, exceeding in beauty the famous
fabrics of India. Rouen on the Seine became the seat of the
cotton industry, and received the title of the "Manchester of
France," while Havre at the mouth of the same river corre-
sponded to Liverpool as the depot for the importation of raw
material and the place of export for the manufactured article.
Agriculture, stock raising and wine growing flourished, and glass,


porcelain, and fancy articles of jewelry and furniture were pro-
duced in considerable quantities and found a ready market. The
Bank of France, established in 1803, became the great central
financial agent of the country second only in consequence to the
Bank of England, while the Paris Bourse took rank as one of the
great Stock Exchanges of the world.

Although one of the Great Powers of Europe, France has
never, since the sale of Louisiana, possessed extensive colonies.
Her West Indian possessions and the settlements in Asia were
too small to affect either her commerce or revenue. Algiers was
acquired in 1830, but never proved remunerative
colonel Trade ^ France. Several small holdings on the west
coast of Africa yield valuable products in ivory,
gold, oil and cotton, and recently France has acquired a footing
in Indo-China from which she derives silk and rice. Colbert's
East India Company planted four small settlements in Madagas-
car, and that island may prove a profitable holding in the future.
During the past quarter of a century, as compared with
Germany and England, France has been losing ground as one
of the great nations, and has failed to make the progress which
her natural advantages of soil and climate should enable her
to make. The upper classes are excessively fond of dress, pleas-
ure and military glory, and, as a result, the energies of the
nation have not been well directed. The national debt is the
greatest, per capita, of any nation, being seventeen and one-half
times as great as that of Germany, six times that of the United
States and one and one-half times that of Great Britain. The
bulwark of France is in the stability of her peasantry. These
Present surpass in industry, thrift and frugality all other

condition of peoples of Europe, and if France were well gov-
erned, its prosperity would equal if not surpass
its neighboring nations. Rural France is divided up into 3,500,-
000 small farms, a large majority of which are cultivated by the
owners, thus giving a self interest and stability to the population


and to agriculture of the greatest value to the nation. Having
ready markets near at hand in Paris and other large cities, a
considerable portion of these farms are devoted to raising small
but profitable crops, such as potatoes, fruit, poultry and the
like. In 1882 the vineyards of France were ravaged by an insect,
entailing a total or partial loss of over 4,000,000 acres, valued at
$1,000,000,000. The pests were finally exterminated, but the
wine industry was prostrated, and since that time a large portion
of the wine used in domestic consumption has been annually

In 1900 the French gave another great Exposition in Paris,
to exhibit at the close of the century the progress of the world
in the arts and sciences. Within the palaces of that exposition
were gathered the best products of the hand and brain of man
from all parts of the world. It was apparent that France was
abreast of the great nations in processes of manufacture, and
that in articles of luxury, such as silk, glass, porcelain, jewelry,
furniture and brandy, she surpassed all other nations in the
artistic character of her wares.

© Art Branch Inc. | English Dictionary