The Sun.
London, England, 1858-09-30 00:00:00

THE BRITISH ASSOCIATION.

LEEDS, WEDNESDAY ATFERNOON.

According to the arrangements made in the first
instance, the reading of papers in the sectional meet-
ings of this scientific congress was to have finished
yesterday ; but, owing to the number entered, or
their length, or both combined, 25 were left unread
when the sections rose yesterday afternoon. The
consequence has been that four of the sections met
this morning.
In section E (Economic Science and Statistics)
yesterday, Mr. W. NEW3IARCII addressed the meet-
ing " On the recent history of the Credit Mobilier."
In 1855, at Cheltenham, he ventured to state to the
section his conviction that, notwithstanding the ap-
parent great success of this extraordinary associa-
tion in Paris, there were many fundamental and
grave errors connected with the whole system on
which it was founded, and that no long time could
elapse before serious mischief might be apprehen-
ded. And there were good reasons for believing
that that statement was well founded. After a mi-
nute anlaysis of the prospects held forth by the pro-
moters of the association when it was founded in
1852, Mr. Newmarch said. that it started with a
paid-up capital of £2,400,000 ;in addition to which
more than £4,000,000 had been obtained in the way
of deposits •, so that what might be called the avail-
able capital was about £6,000,000. This was down
to the end of 1855 ; and they had then invested
£4,000,000 in French funds, &c. ; and £1,300,000
were in bonds of various kinds, and about
£2,000,000 were being employed in trade. So
long as there was almost a continuous rise in
the French funds nothing could be apparently
more prosperous or free from hazard than this
most extraordinary undertaking. At the close of
1855 a profit was shown, and a dividend made, of
somethinc, like 50 per cent. upon the paid-up capi-
tal ; but at° the close of 1856 the profit announced
was barely more than half of that in 1855, while

1857 sho;ved barely more than one-third that of
1856. Indeed, during the last two Tears the expe-
rience of the society had confirmed 'the opinion of
its promoters. In the last two reports it had been
admitted in fact, although not very clearly, that all
the railway, gas, and omnibus companies, the lines
of postal communication, the steam packets, the ob-
ligations in Switzerland, Spain, Austria, and Rus-
sia—that all these things, with which the company
had been involved in carrying out its objects, had
not resulted so profitably as had been expected.
The rgport at the close of 1856 caused the £2O
shares, that had been at L7O or £BO, to fall to
something like £3O ; and they had risen but very
little since then. The report for 1857 was very long,
and contained much fine writing ; but the fact was
that no dividend was declared. At the meeting in
April there was an admission that a balance in
favour of the society—which the report attempted
to prove existed in December, assuming a certain
mode of valuation—had then been swept away.
Indeed, in Paris, the question had been and was
being again raised, whether it was possible for the
society to continue to exist separately, or whether
it must not somehow be placed in conjunction with
the Bank of France, upon which it had so largely
depended from the first. A few figures would show
the result of the society's operations. In 1855 the
profit on stocks, shares, and bonds—which appeared
to mean the profit from buying on one hand and
selling on the other—was set down at £1,040,000;
1856, £457,000 ; 1857, £lBO,OOO. Profits on com-
missions-1855, £57,000 ; 1856, about the same ;
1857, only £28,000. Profits on " continuations"-
1855, £55,000; 1856, £171,000; 1857, £28,000. In-
terest on investments (all the railway and other
companies it might be presumed) was set down at
£121,000 in 1855 but no item appeared under that
head for either of the last two years. One could
not but be struck with the extraordinary state of
things that could allow of the existence for even
six years of so anomalous an institution—one almost
entirely at variance with all that had been hitherto
recognised as sound principle—which professed to
have made a new discovery as to the effecting the
greatest results by means of credit upon the vastest
scale, but which was, in fact, a monstrous stock-
jobbing concern, and nothing more. (Applause.) If
there had been issued, as at first proposed, 24 mil-
lions sterling of inconvertible paper, the mischievous
effects would be incalculable. The society claimed
at its origin that it must be unaffected. by political
councils or social crises ; yet, supported es it was by
many persons who, for some reason, were supposed
to be great authorities in finance, and st:pported
also by all the force of the Government, the insti-
tul "ion was crumbling away, until one was forced to
beL 'eve that it was in the last stages of its exist-
ence. It might be asked how he accounted for the
fact th at during these six years the French finances
genera ly seemed to have been conducted with case
and surxess, despite constant large expenditure,
much cif which was wholly unprofitable and much
yielding only an inadequate return. There was
reason to believe that during the six years, on rail-
ways alone, there had been actually expended in
France nearly 30 millions sternlyg a year—an
amount not far short of what led. to our railway
diMattltieq. There had also been the Russian war, a
failure of the silk crop, and two partial failures of
the harvest. How, then, had all this expenditure
been kept up ? He believed that the Credit
Mobilier had been a positive source of mischief
rather-than that it had in any way helped towards
these wonderful results. Here was the real cause.
The official returns showed that since 1845 the ba-
lance of trade had been very much more than 100
millions sterling in favour of France ; the demand
for French goods having come from the United
States and Australia, through the gold disco-
veries. Our own Board of Trade reports showed
that during the first half of this year the declared
value of our imports from France was more than
seven millions sterling ; while the declared value
of our exports to that country was not more than
two millions. We had paid the five millions in
gold received from Australia and the United States.
This result was as remarkable as to his mind it was
clear and simply, and it was another illustration of
the profound and extensive changes that were being
produced upon the whole of the commercial coun-
tries by the gold discoveries. (Irear, hear.) The
Credit Mobilier was a striking exemplification of
exceptthe entire powerlessness, for great mischief,
of any institution that aimed at great results by any
but the most honest and straightforward means.
(Applause.) It started with the boast of doing the
greatest things by some new device which should
relieve men from the obligation of understanding
their own affairs—some contrivance greatly to dis-
pense with labour—something to accomplish some-
thing by means which nobody could clearly under-
stand. Its experience was like the experience of
all previous similar or analogous attempts, and to
us it should read the same lesson—that a nation
could only increase its material wealth by relying
entirely upon the industry and intelligence of its
citizens. (Applause.)
Some questions having been put to Mr. NEW-
MARCH, he said he had no doubt the profit claimed
to have been made in 1855 was really made, for
there was a considerable rise in all kinds of securi-
ties, which was precisely the most favourable state
of things for the association ; but whether the 24
millions of paid-up capital was still intact must de-
pend entirely upon the mode of valuation of the
concerns, bonds, &c., held. Hitherto the directors
had been the valuers.
Yesterday evening there was a second soiree in
the Town-hall, which, like that held on the previ-
ous Thursday, was extremely well attended.
To-morrow there are to be excursions by railway
to Wharfedale and Craven, Low Moor and Salt-
haugh, and Harrogate and Ripon.