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French Economic Situation 1847-1852

French economic situation 1847-52

Between 1834 and 1846 of the July Monarchy, France experienced an econo mic expansion which can be considered, with strong nuances according to branches of activity, as the take-off of the industrial revolution. Coke fired blast furnaces multiplied from 41 in 1840 to 107 in 1847. The concentration of heavy industry accelerated in factories of Schneider, Wendel, etc.; mechanization progressed in the spinning mills of the regions of the north, Alsace, and Rouen. Increasingly, chemical discoveries found practical applications. And national revenues increased 4% annually; twi ce the growth during the decade 1825-35.

Yet France was only entering the industrial era. The majority of the work in textiles was still done by hand in cottage industry. In 1848 many charcoal furnaces called "Catalan" still survived. Iron metallurgy was largely dispersed in small villages. The beginning of railway construction was shackled by speculation and by the timidity of capital holders. By 1848 the thousand eight hundred kilometers of rails were scattered in independent sections, but one could not yet speak of a network.

Despite the growth in banking, credit facilities remained far inferior to the needs of a new economy. The circulation of notes of the Bank of France increased from 286 million in 1831 to 311 million in 1847, in a proportion far smaller than the volume of production. The majority of the French, above all small savers, still preferred gold or land, safe investments, to paper money.

The agricultural sector largely dominated the economy and demography. That agriculture preponderantly only fulfilled its traditional role to assure subsistence to an expanding population by customary methods. Structure, methods, and implements stagnated, allowing a minimal improvement in production. France of the 1840s, "a great factory of grain," had only modest access to an agricultural market.

The economic crisis which preceded the 1848 revolution began as a traditional crisis of agricultural origins, like preceding revolutions in 1830 and 1789: a poor cereals ' harves t increased the price of bread, the essential nourishment, and as a result those of substitute products. The high price of bread rapidly rebounded on the immediate consumption industries, building, and above all textiles, spreading widespread unemployment to towns and the countryside.

In 1845-46 a blight of potatoes, which had begun to be important in popular consumption, along with a mediocre cereals harvest in 1845 and poor grain crop in 1846, augmented cost of bread during the winter 1846-47. I n April, May, June ("the month of union") 1847, the price of wheat increased to 100-150% of that of 1844 in the north, west, and center of France. In October 1846 the municipality of Paris controlled bread at forty centimes per kilogram. This required twenty-five million francs to compensate the bakers. In Lille in May 1847 bread was set at fifty-two centimes a kilo, when salaries were between a franc fifty and two francs per day. The government of Louis Philippe had to lift the interdictio n on import of grain temporarily. The Bank of France released very important credits to buy Ukrainian wheat. Speculators profited. Nevertheless, despite the rapidly developing crisis, made grave by unemployment and poverty, social troubles usually diminshed as soon as a sufficient harvest lowered grain prices to the normal level. The excellent harvest of 1847 ought to have reestablished equilibrium. But the mid- nineteenth century superimposed new factors on the classical mechanism: a crisis in bank ing, then in m etallurgy added to the original agricultural depression, increasing and prolonging its effects.

The beginning of industrialization had created a concentration of capital. Stocks and bonds were a substitute for wisely placed securities. At first limited to the most wealthy and entrepreneurial in the country, this "drainage" increasingly included the upper middle class and even the most timorous of the bourgeoisie.

In 1841-42 the assembly passed expropriations laws allowing the constructio n of a rail network, along with a plan to finance building with state, private, and local funds. The developing iron industry provided materials, finding an major market indispensable for its growth. An infatuation with railway stocks seized hold of banks and private buyers, but not without damage. There followed an excess of poorly calculated investments that savings could no longer support; construction costs were often under-estimated, inflating the paper value of shares. The crisis which burst in 18 47 exposed that difficult adaption of financial structures to the needs of the new industrial economy. A series of bankruptcies struck private banks and companies. The Bank of France, whose gold reserves diminished by two-thirds in a few months, could only meet its liabilities by borrowing from English banks and raising its discount rate from 4% to 5%. The immediate effect of that credit crisis that gripped the heavy sector weighted down on the mass of investments in plants and borro wing, then those of the associated industries, and finally halting construction. The government of Louis Philippe postponed spending a billion francs of public works, the equivalent of five hundred million days of work. Between 1847 and the beginning of 1848 the value of the production of heavy metals diminished by a third and then by a half. In its wake, mining receded by 20%. And as the value of product was reduced, some fixed costs remained. Despite the lower turn over and profit, certain element s of the cost of produ ction, rents, taxes, interest on invested capital persisted.

The crisis however seemed to diminish towards the end of 1847 when the price of wheat regressed to its normal level. Some signs of a recovery surfaced in commerce and industry. There remained social tensions.

The wave of bankruptcies worried the bourgeoisie. The most wealthy certainly attributed the difficulties to the government's lack of foresight, obstinately refusing any reform. Workers and peasants all felt the effects of the rise in the price of bread, the decrease in wages (up to 30% in northern textile factories), and persistence of unemployment. The uprising of February 24 broke out in "victimized" France.

Revolution was welcomed with hope and fervor by workers, peasants, and the modest layers of the bourgeoise. But, because it worried the possessors, it interrupted the timid economic recovery. The financial elite wanted to demonstrate that social agitation and proclamation of a repu blic impeded the business climate. A panic took hold of the bourgeoisie. Between February 24 and 27, prices collapsed on the stock exchange. Suddenly, from a fear of the future, the French hoarded gold. Clients rushed to the Bank of France to exchange their notes for gold; the balance fell from 226 million to 70 by March 4. It was necessary to suspend free exchange of bank notes and to raise the ceiling on emissions from 250 to 350 million. This led to a new cascade of private bank bankruptcies. Cl ients of savings banks could only withdraw a hundred francs in specie; the remainder was payable half in treasury notes and the balance converted to a permanent and non-refundable annuity.

In the climate of quasi-bankruptcy, the provisional government had to face the deficit left it by the July Monarchy (20% of the normal budget). It solicited voluntary contributions and launched a national loan, but without much success. On March 16 it was forced to increase direct taxes 45%. This did not assu re the indispensable immediate collection, but provoked immense popular resistance.

The elections of April 23 ought to have reassured the financial elite, but there remained the problem of undimished unemployment. In Paris alone 184,000 were without work. To keep them busy, the provisional government had created national workshops on February 26. Some saw this as provisional assistance for a limited number of workers, others as the reappearance of the old charity work shops, while some like t he socialist Louis Blanc, member of the provisional government, wished a very far-reaching social reform. It was only a caricature. The unemployed, first enrolled without formalities (later a certificate of residence was demanded to eliminate provincials and foreigners) in great numbers. They enrolled 29,000 in Paris by early March, by mid-April 60,000, by late May 100,000, and by mid-June 118,310. There were similar work shops in Lille, Nantes, Lyon, and Marseilles, but all, disregarding professio nal qualifications or a rational p lan, offered only make work of little utility. Laborers and the public were irritated, because the work shops were expensive, even after the initial salary was reduced by a half. It remained however the only resource for many. The closure provoked an insurrection from June 24 to 28 whose bloody repression (1500 executions without trial, 25,000 arrests, deportations to Algeria) decapitated the worker movement for several years.

The ministry constituted on June 29 built a bridge to the monarchists and the luke warm partisans of the republic. Some measures limiting freedom of the press and the right of assembly reassured the banking and industrial world. They abrogated the law limiting the work day to ten hours in Paris and eleven hours in the provinces; twelve hours was henceforth legal. Construction begun after February 24 was exempted from taxes for five years. The proposals to buy up railway companies and to nationalize insurance were abandoned along wit h a progressive tax on inheritances. The reestablish of imprisonment for debt was to reestablish credit. The economy could take off, but at the cost of fundamental human rights. On September 11, 1848 the Constituent Assembly rejected a "right of instruction, of assistance for work and the forms and conditions regulated by law."

Yvonne Crewbow


Jean Bouvier, F. Furet, M. Gillet Mouvement du profit en France au XIXe siècle (Par is, 1945).

Labrousse, Asp ects de la crise et de la depression de l'economie française au milieu du XIXe siècle (1815-1851) (Paris: Société d'histoire de la Révolution de 1848, 1956).

Henri See La vie Économique de la France sous la Monarchie censitaire (1815-1848) (Paris, 1928).

P Guillauame La Compagnie des mines de la Loire (1845-1853) (Paris, 1965). (see bibliography: France: economics)

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Krista Durchik revised this file ( on May 3, 1998.

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© 1998 James Chastain.