Mobilier, CRÉDIT.

Mobilier, CRÉDIT. On the 18th November 1852 the French government sanctioned the statutes of a new bank under the name of the Société Générale de Crédit Mobilier. The name was intended as a contrast to the Sociétés de Crédit Foncier (see CRÉDIT FONCIER), which are of the nature of land banks, and advance money on the security of real or immovable property; while the Crédit Mobilier proposed to give similar aid to the owners of movable property. The declared object of this bank is especially to promote industrial enterprises of all kinds, such as the construction of railways, sinking of mines, &c. Various privileges were conferred upon it under its charter; in especial, it was allowed to acquire shares in public companies, and to pay the calls made upon it in respect of such shares, by its own obligations (or bonds); also to sell or give in security all shares thus acquired. The operations of the society were conducted upon a very extensive scale. In 1854 it subscribed largely to the government loan on account of the Russian war, to the Grand Central Railway Company, to the General Omnibus Company of Paris, and to various other important undertakings. The dividend for this year was 12 per cent. In 1855 it lent two sums to the government—the one of 250 and the other of 375 millions of francs. Its operations were vast during this year, and the dividends declared amounted to 40 per cent. The directors had not hitherto availed themselves of their privilege of issuing their own obligations, but this they now resolved on doing. They proposed to issue two kinds—the one at short dates, the other at long dates, and redeemable by instalments. The proposed issue was to amount to 240 millions of francs, but the public became alarmed at the prospect of so vast an issue of bonds, so that, in March 1856, the French government deemed it necessary to prohibit the carrying out of the proposed scheme. This was a severe blow to the institution. In 1856 its dividends did not exceed 22 per cent.; in 1857 they were only 5 per cent. Several attempts had been made to resuscitate its credit, but failed. On 12th November 1871 it was reorganised, the assets of the first society being reported at 48 million francs. In 1878 the capital was reduced from 80 millions to 32, and in 1879 raised again to 40 millions. Another reduction of capital was made in 1884—30 million francs.—On the model of the Crédit Mobilier, companies were organised in England, Holland, America, and elsewhere. The Crédit Mobilier, Limited, was established in London on 29th March 1864. It amalgamated on 30th September of the same year with the Crédit Foncier as the Crédit Foncier and Mobilier of England, Limited; and on the reorganisation of that company in 1866 the words 'and Mobilier' were dropped. The Crédit Mobilier has undoubtedly been useful, but its operations have been hazardous, public advantages being gained at the expense of private losses.