which had been demanded or could be anticipated, and of this total they composed the expenses of the budget. They forgot, in this calculation, that credits demanded are not always exhausted that a balance is never struck without declaring 20 or 30 millions of credits, annulled that definition, situations always reduce the charges of the estimates; we can, indeed, borrow an instance of the truth of this from the Provisional Government, whose Minister of Finance announced the deficit only 13 millions, when two months before the deficit was declared to be nearly 72 millions. The same artifice which exaggerated the expenses diminished the receipts. The estimated receipts for 1848 were based, as of custom, upon the receipts realized in 1847, except some modifications justified by especial circumstances. The constant progress of the public revenue surpassed these estimates, and would still surpass them, for they were based, as we have said, upon the receipts of the next preceding year. In balancing the budget the ordinary receipts of 1845 exceeded the estimates 45 millions, and those of 1846 also exceeded the estimates 36 millions. The balance of the year 1847 was the only exception to this continued progression; the estimates were, indeed, .this year reached, but not exceeded. With the exception of the customs all the indirect revenues followed an ascending march: but the product of the customs retrograding 17 millions, absorbed the augmentation of all the other receipts. It is easy to point out the causes of this transient decline. The scarcity of grain had given rise to an immense importation.* The greatest part of this importation was made in the year 1847. Large capital and many ships were engaged that year in this trade. The customs, so far as this was concerned, were suppressed. This Commerce, so necessary for the country, and so unproductive for the treasury, absorbed many other branch-es of trade. This evidently was a temporary state of things, but the publishers of the provisional situation of the country applied it, as of course, to 1848; and while everything promised that that year would receive an augmentation of receipts, they, on the contrary, pretended to believe there would be a deficiency, and in this manner they created that deficit which absorbed nearly the whole of the reserve of the sinking fund, which should have furnished a large amount to the completion of extraordinary works. These works have been the object of many attacks, nor have the adversaries of the fallen government hesitated to contradict themselves, if they could by so doing multiply their attacks. They said the system of railroads and canals was a system of electoral corruption thrown upon France, as if France was geographically divided into two great political camps, and the government could turn the navigable lines and ironed roads to the camp of its friends, or direct them against the camp of its enemies. They repeated that government should execute one single line of railroad and adjourn all the rest, as if one single line could serve all the general interests, and that it was to refuse satisfaction to one half of France, while it was forced to aid the works destined for the other half! They said that the government should itself construct all the railroads, and enfranchise from the domination of companies all those new lines of circulation, as if the resources of the state were equal to such an enterprise, and were interested to construct roads, which all were unanimous in thinking it could not manage. They also said that the state should sell the roads to companies, and relieve the

According to the estimate of the Minister of Commerce, the extraordinary importation (deduc tion having been made of the mean of ordinary importations,) has been 9,200,000 metrical quintals of flour, wheat, &c., and of a value of about 276,000,000 francs.

Was

treasury of their heavy charges, as if the comparison of the receipts and charges did not evidently show, that for the greater part of our great lines even perpetual tolls would cover the interest of the capital employed in their construction. "You have not confidence enough in the companies," cried some. The repeated failure to raise money, proved the companies were trusted with even more than they could execute. "You allow the companies too favorable conditions," repeated others. The stock exchanges answered this cry, also, even before the revolution. The government was accused of exposing railway stock to the tricks of stock-jobbers: and stockjobbing, which lived by luck, seized the discovery of the opponent of government as its programme, and threw to public credulity these calculations, cruelly falsified by experience. The government was reproached for undertaking useless works. But the returns of the most decried work, the lateral canal to the Garonne, gave, upon its first opened section, a circulation equal to our most frequented old canal.* It was accused of desultory planning, of undertaking everything and finishing nothing; but it left 2,000 kilometers of railroads open, and 1,000 kilometers upon the eve of being opened to the public. The government which inaugurated them can scarcely dream it builded them. No; it was the Monarchy which prepared the festivals of the Republic. All these, and a great many more objections, are now forgotten. Yet there is one other reproach which we should examine. not the government too enterprising? Had it the resources wherewith to terminate all its great enterprises? Let us, in the first instance, measure their extent We must not believe that all the credits opened would be used. The system of granting concessions to companies had made great progress: it had diminished the charges upon the state, and would before long have still further decreased them: however, the cost of works executed, and the estimate of works to be constructed, according to the financial provisions of the law of 11th June, 1842, were 1,081,000,000 francs. Everybody agrees upon the correctness of this figure, it was established in a document of the fallen government, and the new government admits its correctness. These were the projects of peaceful times, conceived for peace. The state was engaged but with some companies, to whom concessions had been made. If the times changed the works not conceded could be adjourned or diminished, such as the prolongation of the western railroad, the public railway of the center, the new roads, ports, canals, and rivers. In difficult circumstances the state was free to reduce its projects; if the times were favorable, it could execute all of them. Already this great enterprise was rapidly being accomplished. We have seen that upon 1 milliard 81 millions, on the 1st January, 1848, 441 millions had been expended and paid. It is true that this expense had been, in a great measure, temporarily supported by the floating debt, but we have also seen that resources were ready wherewith to disengage it. There remained but 640 millions of resources to be provided for in a series of years. It would have been imprudent to reckon upon the reserves of the sinking fund solely. This would have been to retard, or rather compromise the liberation of the state very much. Experience had taught, that in a series of very adverse years, these reserves could be engaged to cover the treasury deficits. It was not necessary to expect blindly a series of favorable years, which would completely

In 1846 the circulation was 90,962 tons, which went through the whole line; in 1847 it was 147,179 tons.

*

free it but, at the same time, it would have been carrying prudence very far to take the last eight years as the basis of future calculations. Let us admit this hypothesis: the liquidation of the last eight years demanded 492 millions from the reserves of the sinking fund, or 62 millions annually. Admit, even against every probability, that the next succeeding eight years will demand the same sacrifice. The reserves of the sinking fund were 81 millions in 1848, let us irrevocably arrest them at this figure, by supposing, (for greater simplicity,) that the progressive operation of the consolidations was arrested. This certainly was a disposable resource for the treasury, for before the sinking fund could claim them, it was necessary that the quotation of rentes, other than the three per cents, fell below par, which was not probable, except as a temporary incident. Deduct from this reserve the 61 inillions, which we admit, for argument sake, may be necessary, there will still remain 20 millions of francs at the disposition of the state. The state could also use 17,602,000 francs of rentes, which had been bought in, and even then appropriated to the liquidation of the three cents.* per Thus we see the treasury possessed 3,600,000 francs of rentes, which it could disburse at pleasure, without transgressing the laws which regulated the sinking fund. And it might in this manner, without flooding the market with new stock, or imposing new burdens, it might realize, we say, by success in sales of stock which had been bought in, a capital even greater than its enterprises demanded. Let us, lastly, add that the floating debt, reduced to the lowest figure by the installments of the last loan, placed the government in such a position that it could alienate its rentes without prejudicing its credit or retarding its works. All the increase of receipts could be reserved to amelioration of the public services or the diminution of taxation. Thus, allowing a very wide margin for untoward events, the liberation of the state was well assured. The situation of the finances was equal to ordinary and extraordinary services. The service of the treasury was not easier than that of the public works and the budgets. Must we reply to the accusations directed with so much violence against the pretended exaggerations of the treasury floating debt, to prove which we have just asserted? A government discredited from its birth, is naturally irritated that it cannot manage the affairs of state as well as a government whose credit stood high even on the day of its downfall. It prefers accusing the want of foresight in its predecessor, rather than confessing its impotence. Forced to succumb, it prefers falling under an irresistible weight. Hence we saw the Provisional Government declare that the last government had contracted a floating dent of a milliard, and that that debt was immediately payable. The able article of M. Vitel has dispensed us from a response, or rather, permitted us greatly to abridge it Let us say one word upon the figure of the debt, later we will discuss the question of the time when it would become due. The floating debt of the treasury is older than is generally thought. Its

Composition of the sinking fund on the 1st of January, 1848:

Portion from the 5 0-0, 44 0-0, and 4 0-0..

Repurchased rentes belonging to the 5 0-0, 41 0-0, and 4 0-0........

.francs

33,103,472
47,920,905

81,083,377

15,783,193

17,603,172

33,386,365

114,470,742

origin is before the Empire. The several deficits of that epoch carried it to 37,437,000 francs. The Restoration continued to increase it. Its Spanish debt, which it was unable to recover, and compelled to pay, and the deficits of several of its budgets, increased the figure of the floating debt 143 millions. From 1830 to 1841, several deficits of the Monarchy of July increased the floating debt 25,301,000 francs. The three sums which we have recited exceeded 256 millions. It may be asked, at first, why it is that the treasury has never thought to consolidate that portion of the floating debt which, as we have seen, was nearly entirely formed before 1830. The reason is simple: our system of adminstration and financial centralization bring to the treasury heavy installments, for it is the cashier of public establishments and of communes, of all the corps of the army, of the Caisse des Depots et Consignations, and of savings banks: it receives, besides, from its Receivers-general considerable advances, which are a sort of collateral security for their administration. The figure of these installments rises or falls as these depositors withdraw more than they pay, or vice versa. As it has rarely happened, since many years, that these installments have fallen below 256 millions, therefore it has been the proper policy to cover this floating debt, from year to year, with these installments, which could not be refused, rather than consolidate it.

What, indeed, would the treasury have done with the large sums which were deposited with it, if it had not thus employed them? Behold, now, upon this pretended milliard 230 millions which are not at the charge of the last government, it inherited the debt of the Empire and the Restoration, but the rest is at its charge. On the 1st January, 1848, the floating debt was 630 millions. The portion of this debt contracted by the late government, therefore, is 400 millions. We are far yet from the milliard. Does any one wish to know the origin of this debt? 324 millions of it were appropriated temporarily to the expense of the public works; the remainder was consecrated to the service of the treasury: this has left a transient floating debt for the installments of the loan borrowed, for the public works would presently extinguish it.

We have not comprised in the floating debt the savings banks funds invested in the public funds. In giving them this character the Minister of Finance has changed the rule which, from time immemorial, has been adhered to in his department. This rule, however, is easily justified. The savings banks pay their funds into the treasury through the Caisse des Depots et Consignations. If these installments had remained in its coffers they would have accumulated to the sum of 355 millions by this time. This enormous accumulation would have proved ruinous to the treasury, which was paying 20 per cent interest upon it, and fatal to Commerce, by shutting up from trade so large an amount of circulating medium. The treasury could, indeed, receive the funds of the savings banks, but it must also employ them. It did, indeed, employ all of them, either in buying, on the Bourse, public funds, or the shares in canals, which the state had guarantied as its loans made directly with the state, called the Consolidation of the Savings Banks Funds, (Consolidation des Fonds des Caisses d'Epargne.) By this simple operation the treasury received in rentes or in dividends, the interest it paid to the depositors, and returned to circulation the capital which the savings banks had momentarily retired. Thus unemployed funds stood on the account current of the treasury, and formed the floating fund of the savings banks, sometimes diminished by withdrawals, and then in

creased by heavy deposits. The treasury was the only debtor to these funds which figured in the 630 millions of the floating debt on the 1st of January, 1848: it paid the interest, and it was bound to reimburse the capital from its own resources. Let it be admitted it was the guaranty of these funds so employed, but does not the Minister of Finance grossly abuse terms in representing this investment as a direct and personal debt, or mere loan? Is it not a flagrant abuse of public credulity in the Provisional Government, when recounting the history of these investments, which were made under the sanction of the law, to style it a "deplorable history?" Having finished our long examination, we would fain recapitulate the principal results in a few words. The financial testament of the Monarchy of July left the receipts of the contributions directes, which had been increased, we had nearly said, by local taxes, but were amply repaid by useful works; the receipts of the contributions indirectes, largely increased by the unheard of progress of public riches: the increase of the public debt paid for by great works, of greater value than the increased debt, the rules for the regulation of the sinking fund so religiously observed as to exceed the promises made to the public creditor; the stability of the public credit rendering disposable a considerable reserve, of which one part sufficed to assure, under the worst circumstances, the balance of the budget, while the other was the natural appropriation to extraordinary works: Algeria conquered and pacified; numerous valiant disciplined land and naval forces; all the civil services ameliorated: the moral emulating the material progress; primary instruction widely diffused, superior instruction greatly increased, new chapels by the side of new schools; the activity of the government and the activity of the country stimulating and directing great works, great plans, and great resources public receipts increasingly increasing; the cheapness of peace taken advantage of to render peace productive; the past accounts closed, the present easy, and the future assured, such, we repeat, are the financial bequests of the fallen Monarchy of July.

We persuade ourselves that we have absolved the late government from the responsibility of the new loans and taxes which the Minister of Finance announces. Must we now indicate the origin of these disagreeable necessities? Their origin is too certain; for if the past is guiltless of them, the present must be responsible. We find written upon every page of the budget the evidence of this responsibility. Let us indicate them rapidly, for it is far from agreeable to dwell upon faults or misfortunes. The rupture of the balance of budgets is due to three principal causes-the great increase of the public debt, the augmentation of expenses, and the diminution of ordinary receipts. In fifteen months the increase of the public debt has been 70 millions rentes; but as 8 millions of rentes belonging to the savings banks have been annulled, this figure is reduced to 62 millions. Of these 62 millions, the Minister of Finance charges 36 millions to the late government, because they have been employed in reimbursing the funds of the savings banks which it had received, and the treasury bonds which it emitted. Here one observation at once strikes us-the debits of the savings banks have been reimbursed; but had they no credits? Did they not possess in rentes, or in canal stock, revenues to the amount of 11 millions and a half? Did not the state dispose of them as if they were its own property? Did it not annul 8 millions of these four per cents, and thus reduce by so much its new emissions? Did not these funds all figure on the credit side of the treasury? No one can dispute any of these facts. How is it, then, that in constantly