New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1882-01-23
THOTRLE " FRANCE.

From France comes q warning which lcG1S-
lators and business men of this country ought
to heed a gigantic speculative movement,
which began with the accumulation and in
vcstment OF surplus earnings in 1873 aud
which continued with cvcr-augmenting force
in 1850 and 1851, has at last collapsed.
Ruin has come to many already, and it is yet
n question whether a prolonged and terrible
prostrati0n of industry and trade can be
avcrtcd. Two months ago, when a collapse of
speculation was feared, it was believed that
the disastrous effects would be mainly confined
to spectators. Bat settlement postponed is
almost certain to Increase in difficulty and
danger and it is row reported that the French
Government is earnestly encouraging efforts TO
meet the crisis, because, if not arrested, it is
likely to produce most serious consequences.
In France, as in this country, years of hard
ship. toll and economy had accumulated vast
surplus funds al the close Of ISIS. An i'm
provcment in business in 1879 led to the crca-
ton of many new companies. into which
81 OO00, 600 OF capital was put in that year.
Speculation began to spread. \ host OF cor
porations were created solely for speculative
uses Thousands became suddenly rich by
the rise in market value Of paper securities
thus created, and the appetite for those
securities grew with every month. In 1850
the nominal capital of new companies organ
lied was SlGj, 100000. 1t WAS mentioned
that there were torty-four joint stock banks
in operation, Of which only seven bad existed
as early as 1870 Many old and substantial
institutions were swept away with the cur
rent. and became mere "pOols" for specula-
l.. H., e.,
Gercelv still. There had been a very
bad crop, and France had been obliged
TO pay many millions for imported
food, but speculation only went on more
wildly, creating new securities by the
hundred and adding many millions to their
nominal value by each days dealings on the
B0ursc. According to recent statement in
The London Economist the capital OF new COM
panics organized i'll France in only three
quarters of the year 1881 was $557,OO0,000
a later French statement puts the amount for
the year at $40, 100000.
Since January |, the markets had been Weld
ing slowly, until a sale of large blocks Of $ucz
Canal shares on Wednesday proved the i'm
mediate cause of a long-cxpcctcd crash. The
Suez shares had sold at 3,40O about the 9Th,
speculation and the largest losses were in the
stock of the Union Generate, and the various
institutions of which that bank was the
financial centre. This stock sold AT 5000 late
in November and at $500 OH the 18th, and
dropped to 100 last Saturday. But the shares
of many associated institutions also fell and
one of them, the Bank OF Lyons and Loire,
collapsed, causing complete susDcn-
sion of business and the ruin Of many
operators at Lyons The connection of
this group of banks with gigantic
works in Austria, Hungary and Seryia, and
with rich capitalists and operators, especially
of the Catholic faith, makes it probable that
general panic would be inevitable if the Union
Generate should not be enabled to meet its
engagements.
The history of this bank has been striking
illustration of The speculative operations i'll
France. 1t increased g. deposits from
22,OOO,000, December .-.~ to G2,OOOOOO.