tensive transactions, or pushing to an | (£2,800,000) was owing chiefly to the undue length, in the form of a paper company of which he was a member circulation, the royal privilege of coin- by the public treasury of that country. ing money. The immense discounts The long delays thrown in the way which occasioned the peril were al of the liquidation of this debt by most entirely granted to the function- the government, occasioned an excesaries engaged in the public service, and sive multiplication of paper securities, who, being obliged to make good their which soon fell considerably in value payments to government by a certain in the money market; but so impliday, and embarrassed by the remote cated was the treasury in these transperiod to which all payments from the actions, that it was compelled to go on public treasury were postponed, were in the same perilous course, and thus unavoidably driven to this resource to increase the depreciation, which had supply the deficiencies arising from the already become sufficiently alarming. backward payments of individuals, and M. Desprez, a great capitalist, engaged the peremptory demands of the trea- also in the collection of specie, and sury, and their credit was in some sort who had long supported the bank, beinterwoven with that of the general came embarrassed, and himself solicitadministration. The Bank of France ed aid from that establishment. The was the quarter to which they in gene- consequence was, that the bills of the ral applied for accommodation; but public contractors sank so much in the pressure thus occasioned upon that value that they would no longer pass establishment was so severe that, even current in the market; at length they after the successes at Ulm, they had fell so low as 10 instead of 100. A announced to the Emperor that they universal disquietude prevailed, and could not continue their advances, and the demands upon the public treasury that the drain of specie was such that had already become very heavy, at the they themselves stood in the most im- moment when it had little else than minent danger. paper securities in its coffers.

10. To relieve the pressure on the bank, attempts had been made to obtain a supply of the precious metals from every quarter whence they could be drawn. For this purpose, recourse was had to certain great mercantile companies, who were engaged in most extensive speculations in all parts of the world, and so deeply implicated in the furnishing of the precious metals to that establishment, that their support on its part was almost a matter of self-preservation. The greatest of these was that of which Ouvrard was the leading partner; and its engagements with the bank of France were to an enormous amount. This great capitalist had for several years been engaged in vast contracts for the service of the Spanish fleet; and so extensive were his transactions, that almost all the treasures of Mexico found their way into his coffers. Gradually he had introduced himself into the principal departments of the French service; and before the middle of 1805, nearly seventy millions of francs

11. Matters were in this critical state when the breaking out of the German war, and departure of the army for the Rhine, occasioned an immense and immediate demand for metallic currency, which alone would pass in foreign states, both on the part of government and individuals. Napoleon, for the different branches of the public service, took fifty millions of francs (£2,000,000) from the Bank of France, without the slightest regard to its necessary effect upon the credit of that establishment. Unable, after this great abstraction, to meet his other engagements, the minister of finances had recourse to Ouvrard, Vanlerbergh, and Seguire, who advanced 102,000,000 francs (£4,080,000) to the public treasury, and received in return long-dated bills for 150,000,000 francs. To meet this advance Ouvrard hastened to Madrid, to obtain a supply of piastres from the Spanish government; and such was the ascendancy which he had acquired at that capital, that he shortly after concluded

12. Napoleon was highly indignant at these embarrassments, and fully appreciated the magnitude of the peril from which he had been extricated by the fortunate victory of Austerlitz.* Public opinion, as usual, followed the impulse set by its leaders; the imprudent facility of M. de Marbois, the minister of finances, became the general object of reprobation, and the greatest wits of the capital exerted their talents in decrying his administration. The Emperor minutely scrutinised the embarrassments of the bank and the treasury: it was found that the total deficit of the public contractors to the government amounted to 141,000,000 francs (£5,600,000), of which Ouvrard and Vanlerbergh owed nearly two-thirds, and prosecutions were immediately ordered against all the defaulters, including M. Desprez, who were thrown into prison without distinction. Measures of the last severity were threatened against Ouvrard and his partners, who were offered their choice between standing the chances of a criminal prosecution, and the immediate cession of all they possessed. They preferred the latter, and

a treaty with the King of Spain, in | protracting the contest in Moravia for virtue of which his company, during a few weeks, the Allies would infallithe whole remainder of the war, ac- bly have brought the French governquired "an exclusive right to carry on ment to a national bankruptcy. the whole trade to the Spanish colonies, and to import the whole treasures and merchandise brought from thence to the European shores." Never before had such a power been vested in any company nearly the whole treasures of the world were to pass through their hands. But though this treaty gave Ouvrard the prospect of obtaining from America, before a year expired, 272,000,000 francs (£11,400,000) in hard dollars, yet this would not furnish a supply for present necessities; and the efforts of all the capitalists of the Continent, which were put in requisition for the occasion, were unable to meet the crisis or avert a catastrophe. Desprez-who had demanded a loan of 100,000,000 francs (£4,000,000) from the Bank, which they could not give him—and several other of the greatest capitalists-including M. Recamier, the splendour of whose living, as well as the beauty of his wife, had long riveted public attention-failed. This immediately occasioned a terrific run upon all the other public function aries, as well as the bank and the treasury. Paper would no longer pass; credit was at an end; and M. Vanlerbergh, one of the greatest of the na-in consequence that gigantic company tional contractors, was prevented from failing solely by an advance to a great amount from the public funds. The consequences would have been fatal to the empire had a disaster at the same time occurred in Germany, for the government were absolutely without the means of replenishing any branch of the public service. But the battle of Austerlitz and the treaty of Pressburg operated like a charm in dispelling the panic: with the cessation of Continental war the demand for the precious metals immediately ceased; and the crisis was in fact over, when the return of the Emperor to the Tuileries entirely restored the public confidence. The danger, however, had been so pressing, that nothing but the instantaneous termination of the war could have averted it: and, by merely

was reduced to bankruptcy: but in the end nearly the whole deficit was recovered for the nation. The system of providing for the public service by means of contractors was shortly after abandoned: but a few years after, the government was under the necessity of resuming it: and Napoleon ultimately made the most ample amends to the injured M. de Marbois, by ap

* 66 Beaten," says Savary, "in the depths of Moravia, deprived by inconceivable impruentitled to calculate, he would have been dence of all the resources on which he was wholly unable to repair his losses, and his ruin from that moment was inevitable."— SAVARY, ii. 161.

+ The unbending firmness of M. de Marbois being mentioned in laudatory terms in she, "is nothing but a willow painted to presence of Madame de Stael, 'He," said look like bronze."-BOUR. vii. 111.

pointing him president of the Chamber | Austrian war, rendered these resources of Accounts.

totally insufficient; and it became necessary to apply to greater capitalists, who, in anticipation of future payments, could afford to make the great advances required by government. M. de Marbois was thus driven by necessity to M. Ouvrard and the company of the Indies, who were already the contractors for the supplies to almost all the forces, both by land and sea; and thus became invested with the double character of creditor of the state for advances made on exchequer bills, and also for payment of the supplies furnished to the different branches of the public service. Thence the deep implication of this company with the transactions of government, and the necessity of the Bank of France supporting, by extraordinary and lavish discounts, the credit of individuals or associations, from whom alone government derived the funds requisite for its immense engagements. monetary embarrassments of 1805, therefore, like almost all others, were occasioned by an extravagant expendi

The

13. In fact, though it suited the interests of the Emperor to represent this alarming catastrophe as exclusively the result of the imprudent facility of the minister of finances, and the inordinate profusion of discounts by the bank, yet the evil in reality lay a great deal deeper, and the crisis was, in fact occasioned by the vicious system to which the extravagant expenditure of the imperial government had driven the finance ministers. Although the budgets annually presented since Napoleon seized the government had exhibited the most flattering aspect, yet in reality they were in a great degree fictitious, and intended to conceal the distressed condition of the finances. The actual receipts of the treasury for the last five years had been a hundred millions of francs below the annual expenses. In addition to this, the payments of the finance minister required to be almost all made in the course of each year; while the period of his receipts for the same time, according to the established mode of collecting the revenue, extend-ture: but they arose not on the part ed to eighteen months. Hence arose of individuals, but of government; an indispensable necessity for recourse the crisis was not commercial but poto money-lenders, who advanced cash litical. to the treasury, and received in return 15. Thence the singular and instrucbills payable when the tardy receipts tive fact, that the whole inordinate of the revenue might be expected to be discounts, of which Napoleon so loudly realised. In this way, while the re- complained, were made not to indiviceipts and expenditure, as exhibited in duals engaged in private undertakings, the budget annually presented to the but to the contractors for the public Chambers, were nearly equal, there service. The root of the evil lay in was in reality a most alarming deficit, the extravagant expenditure of the which was daily increasing; and it was Emperor himself, which rendered the only by largely anticipating, by the anticipation of future revenues indisdiscount of bills accepted by the trea-pensable, to a perilous extent, in every sury, the revenue of succeeding terms branch of government. He often or years, that funds could be provided boasted that he never had, and never for the liquidation of the daily de- would, issue government paper. This mands upon it. was quite true; but it was equally true, what he passed over, that his expenditure of a hundred millions of francs annually, beyond his income, drove all the government contractors to that perilous expedient. Considered in this view, this financial crisis was not a mere domestic embarrassment, but an important event in the progress of the contest: it indicated the arrival

14. Recourse was at first had to the receivers-general of the departments to make these advances: and this system succeeded, though with some difficulty, during the comparatively economical years of 1803 and 1804. But the vast expenditure of 1805, occasioned partly by the equipment of the expedition at Boulogne, partly by the cost of the

of the period when France, almost destitute of capital from the confiscations of the Convention, and severely weakened in its national credit by the injustice committed during its rule, was unable from its own resources to obtain the funds requisite for carrying on the gigantic undertakings to which its ruler was driven in defence of its fortunes; and when foreign conquest and extraneous spoliation had become indispensable, not merely to give vent to the vehement passions, but to main-ers-general of the revenue were invited tain the costly government and repair the financial breaches occasioned by the Revolution. Napoleon, however much he was disposed to lay the fault, according to his usual system, on others, was in secret perfectly aware of the perilous pass to which his financial affairs had now been brought, and, like Alexander, he trusted to his sword to cut the Gordian knot. Marbois had long before represented to him the danger of "having for the bankers of the state those to whom its ministers were indebted;" and Napoleon was so sensible of this, that he had expressed his resolution, in military fashion, to have M. Ouvrard arrested, and made to disgorge some of what he called his illgotten wealth, but he had never been able to emancipate himself from his influence.*

tion of the treasury." The difficulty was, that the treasury had to pay every twelve months a hundred and twenty millions of francs (£4,800,000) more than it received, in consequence of the backwardness of all payments to the exchequer. To liquidate part of this debt, sixty millions (£2,400,000) were funded in the five per cents; the capital of the Bank of France was doubled; and deposit banks, under the name of "caisses de service," where the receiv

to deposit the sums they had drawn as soon as they were received, and encouraged to do so by being offered interest for all sums so deposited prior to the time when they were bound to make them forthcoming. By this means, the necessity of having recourse to paper credit to raise funds upon anticipated revenues was in a great measure avoided, and the collection of the taxes conducted with much greater regularity than formerly.

17. But these financial improvements, great as they were, did not strike at the root of the evil, which was a permanent expenditure by government greatly beyond its income. To cure this by means of loans, the well-known practice in Great Britain, was impossible in a country so ruined in its commercial relations and in16. The crisis of 1805, however, terests as France then was. The vicmade decisive measures necessary. "Itories of Ulm and Austerlitz provided will have no alliance," said he, "between the bank and the treasury. If such existed, a simple movement of the funds might reveal the most important state secrets. We cannot too soon sign a decree for the emancipa

* "Bourrienne," said he, in 1800,"my part is taken: I will cause M. Ouvrard to be arrested."—"General," replied the secretary, "have you any proofs against him?" "Proofs? What are required? He is a contractor, a scoundrel. He must be made to disgorge. All of his tribe are villains. How do they make their fortunes? At the public expense. They have millions, and display an insolent extravagance when the soldiers are without shoes or bread. I will have no more of this." He was accordingly arrested and thrown into prison; but as there was no evidence whatever against him, he was speedily liberated, and soon, from his great capital, regained all his former influence with the government.-BOUR. vii. 94, 95.

the means of solving the difficulty. From the moment the grand army crossed the Rhine, it was fed, clothed, lodged, and paid at the expense of Germany. On the 18th November, an edict of the Emperor directed the transmission of all funds to the Army of the North to cease; and on the 18th of December a similar order was given in regard to the Army of Italy. Thus

+ From the castle of Louisberg in Würtemberg, Napoleon wrote, so early as 4th October 1805, to the minister of finances at Paris"The army maintains the most exact discipline; the country hardly feels the presence of the troops. We live here on Bons: I have no need of money from you." These Bons were treasury bills, which were discharged by the French government out of the contributions levied on the inhabitants, or the sums extracted from the conquered countries.BIGNON, v. 100.

-See DUC DE GAETA, 304; BIGNON, v. 102; the third united to its federal system PEUCHET, 560.