New-York daily tribune. [volume] (New-York [N.Y.]) 1842-1866, 1856-07-11

- ;ra,,t,ial companies, not with ths view Of pro
aue,ivs investments, but simply for the ee>eet "
,,och;ohh;po profits. TIE new idea they have
started il TO render TIE Industrial ieudAn'n 'i''''
tary to stock jobtiag. A..
i..o,dipo !, the statutes, the capital Of mo
ga, Mob.ssy il fixed at 60,0O0,000 Of Trance
The ssms statutes allow it to receive oepo'o
.ecou,ts current for twice that sum, .. g. 'of
ooooo0. The sum at the disposa Of the soc'e"
,,n, amounts altogether to 1sO, wv OF ifans'
Measured BY the bold scheme OF oO'a'nine me
nst,opsse Of the whole industry Of f1ance' 0is 10
r.r.in,y ,. very small sum. But two-tolrds Of
mi. ann can hardly be applied 10 the purchase
~ ;,aux,is ,harer, OF such values 60 DO not COM
u.nd tie certainty of immediate realization, pre-
.;..,v lec.u,e they are received on call. For this
....o, the ,tstutes open another resource to the
CO., Mob1;,y. 1t is authorized to issue deben-
,n,s. amounting to ten times its original capital,
~ the amonDt of 600, 600, 900 francs; or, in
o.,e, words the institution Intended for the &C.
.ommodstion Of all the world is authorized 10
c,me into the market ss borrower for sum ten
ZINES larger than its own capital. "Our deben-
d" lures" says NJ. Pereire, Twill be Of two kinds.
1.-THE first, issued for short period, must CORE
spopd with our various temporary investments"
With this sort OF debentures we have nothing to
do here as, by article VIII. Of the statutes, they
are to be Issued only to make up the supposed bal
ance short Of the 100 O00,0 900 to be received in
current account which have been entirely received
in that way With respect to the other class OF
debentuIes, "they are issued with remote dates Of
"pay ment, reImbursable by redemption, and will
" correspond with the investments of like nature,
which we shall have made either in public fun1s or
in shares asd debenturesof manufacturing compa.
"nies. According to the economy Of the system
(which serves as the basis Of our Association,
"these securities will not only be secured by
corresponding amount of funds purchased under
1.-the control of Government, and the united total
"of which will afford, by the application of the
"principe Of mutually, the advantages of CON-
"pensaton and division Of the risks, but they will
"have, besides, the guarantee of capital which,
for that object we have increase1 to consider
liable amount"
Now, these debentures Of the CREDIT Mobilter
are simply limitations Of railway bonds-ob.
legations redeemable at certain epochs and under
certain conditions, and bearing fixed interest.
But there is difference. While railway bonds
are often secured bya mortgage of the railway ITSELF
what is the security for the Crtdt Mobiier deben-
lures The rentes, shares, debentures and the
like, of industrial companies, which the Credit
Mobilier buys with its own debentmes. Then,
what is gained by their emission The difference
between the interest payable on the debentures OF
the Credit MoJilier and the interest receivable on
the shares and the like, in which it has invested
its loan. To make this operation sufficiently profit
able, the Cr(da Mobilier is obliged to place the
capital realized by the issue of it's debentures in
such Investments as promise the most remunerative
returns, l. C., in shares subject to great buctua-
tiUns and alterations of price. The main security
for it's debentures, therefore, will consist Of the
shares of the very industrial companies started by
the Association itself.
Thus, while railway bonds are secured by
q capital at least twice in amount, these Credit.
Mobiiier debentures are secured by capital only
nominally of the same amount, but whish must
fall below, with every downward movement of the
stock. market. The holders of these debentures,
accordingly share in all the risks Of the share.
holders, without partic pating in their profits.
"But," says the last Annual Report, the holders
"of the debentures have not only the guaranty Of
"the investments in which it 1.-THE Credit Mobiiier
"has placed its loans, but alec that Of its original
capital" The original capital 6O,OOO,OOO, respon.
sbe for the 100 OOofdeposits offers to serve as
guaranty to 600, 100000 of debentures, beside the
guarantees it may be required to furnish for the un
limited number of enterprises which the Credit No
bilier is authorized to start the Association were
to succeed in e1char ging the shares of all industrial
companies against it's own debentures it would
indeed become the supreme director and proprie-
tor of the whole industry Of France while the
mass of ancient propIietOrs would find themselves
pensioned with fixed revenue equal to the inter-
est on the debentures. But, on the road to this
contamination, the bankruptcy which follows from
the economical conditions we have above Illus
trated, will stop the bold adventurers This little
accident, however, has not been overlooked; on
the contrary, the real founders of the Credit No
bilier have included it in their calculations. When
that crash Gomez after an immensity of French
inteIts SITS has been involved, the Government Of
Bonaparte will seem justified in interfering with
the Credit Mo1iiisr, as the English Government did
10 1897 with the Bank of England. The Regent
Of France, that worthy sire of Louis Philippe,
tried to get rid of the public debt by converting
the State obligations into obligations of Laws Bank;
Louis Bonsparte, the imperial Socialist, will try
try t. seize upon French industry by con-
vertDg the debensres of the Credit Mobilisr into
cAaAa 4AI:na4;A.n VIII La n.nra mara anlranA