one, and a brief retrospect will not, I think, be irrelevant to my present purpose, for it throws much real and instructive light on the tendencies of democracies. We may start from the year 1814, when the great French war was concluded. There was then an extraordinary contrast between the financial condition of Great Britain and that of her conquered adversary. Great Britain seemed almost crushed by her enormous debt, while the debt of France was quite inconsiderable. Partly by unsparing levies on conquered nations, and partly by his own extremely skillful management of French resources, Napoleon had made his great wars almost self-supporting. Putting aside the debts of conquered or annexed countries, the whole debt of France created between 1800 and 1814 amounted only to an annual payment in interest of seven millions of francs, to a nominal capital of 140 millions, or less than six millions of pounds.18
The Hundred Days, the war indemnity exacted after Waterloo by the Allies for their expense in the war, the cost of the army of occupation, the large sums which were voted in compensation to the plundered ‘émigrés,’19 and the years of impaired and depreciated credit that followed the Restoration, added largely to the debt; but in the opinion of the best contemporary authority on French finance, the Government of the Restoration, in this branch of administration, was one of the most skilful, honourable, and economical France has ever known. The credit of the country was never so high as in 1830, and although the debt was increased, it was still very trifling in comparison with the resources of France. When Louis XVIII. came to the throne it involved an annual payment in interest of rather more than sixty-three millions of francs. In 1830 this payment had risen to 164 1/2 millions. Rather more than four million pounds had thus been added to the annual debt-charge.20
The reign of Louis Philippe was conducted on much the same lines; and although the debt continued to grow, it grew at a far slower rate than the revenue of the country. In the eighteen years of his reign Louis Philippe added about twelve and a half millions of francs, or 500,000l., to the annual debt-charge. When his Government fell, in 1848, the French debt was the second in Europe; but it was still only a fourth part of that of Great Britain, and if the French monarchy had been as stable as that of England, there can be little doubt that French credit would have attained the English level.21
Then came the democratic Republic of 1848. It lasted for three years, and in those three years France increased her debt more than in the twenty-five years between 1823 and 1848. In 1852, when the Empire began, the debt-charge was about 231 millions of francs. The French debt was now a little less than a third of that of England.22
During many years of the Second Empire the wealth of France increased perhaps more rapidly than in any other period of her history. Much of this prosperity was, no doubt, due to the astonishing impulse then given to all forms of production by Californian and Australian gold, but much also was due to the sagacious energy with which the Government assisted material development. The railway system, which had been very insufficiently developed under Louis Philippe, was now brought to great perfection. A policy of judicious free trade immensely stimulated industry, and nearly every kind of enterprise was assisted by the Government. Vast sums were expended, and usually with singular intelligence, on public works. The Constitution of 1852 reserved to the Emperor the right of authorising such works by simple decree, and also the right of transferring the credits voted for one department to another. But it was the policy of the Emperor through his whole reign to secure the popularity of his government by keeping the taxes low and unaltered, and meeting the growing expenditure by constant loans. Almost the whole cost of the Crimean War, the Italian War, and the Mexican expedition, and also an immense part of the habitual expenditure of the Government in times of peace, were raised in this way. The extravagance of this system was in part concealed by the complexity of French financial administration, under which several distinct budgets were usually put forward in a year, and also by the device of a very large floating debt. One of the most important steps taken under the Empire was the introduction of a new system of raising loans. Instead of appealing to a few great capitalists, the Emperor threw open the loans by direct subscription to the whole nation, dividing them in such small portions that nearly all classes could afford to subscribe. There is much difference of opinion about the economical advantages of this plan, but there can be no doubt of its extreme popularity. The small Government bonds were eagerly taken up, and loans became as popular as taxes were unpopular. There can also be no doubt that, by interesting an immense portion of the people in the security of the national debt, the new system greatly improved the national credit and strengthened the conservative element in France. It was computed that in 1830 there were at the utmost not more than 125,000 persons in France holding portions of the national debt. In 1869 the number had probably risen to between 700,000 and 800,000, and in 1881 it is believed to have been more than 4,000,000. Either in this way or as owners of land the great majority of the heads of families in France had a direct interest in the prosperity of the State.23
The system of government under the Second Empire, and especially in its first ten or twelve years, deserves more careful and impartial examination than it is likely to receive from the generation which witnessed the catastrophes of the Franco-German War. It was a government with no real constitutional freedom, no liberty of the press, no liberty of public meeting. It sheltered or produced great corruption, and repressed with arbitrary and tyrannical violence political opponents. It was detested by the educated classes, by the minority of the population who seriously cared for political freedom, and, in spite of the enormous sums that were expended in public works in Paris, it never succeeded in winning the affections of the Parisian workmen. On the other hand, the theory of paternal government exercised in a thoroughly democratic spirit had probably never before been carried out with equal energy and intelligence. The Emperor continually looked for his support to the great inarticulate masses of his people. To promote their immediate material well-being was the first object of his policy. No preceding Government had done so much to stimulate industry in all its forms, to develop latent resources, and to provide constant and remunerative employment. For many years he succeeded in an eminent degree,24 and there is very little doubt that the last plebiscite which sanctioned his rule reflected the real feelings of the numerical majority of Frenchmen. If 100,000 more French soldiers had been present on the field of Wörth, and if the French commander had happened to be a man of genius, it is very possible that the Empire might have existed to the present day.
M. Leroy-Beaulieu calculates that in the beginning of 1870—the year of the war—the interest of the consolidated debt was about 129 millions of francs, or about 5,160,000 pounds sterling more than it had been in 1852, when the Emperor ascended the throne. The whole debt-charge was 360 millions of francs. It represented a nominal capital of rather less than twelve milliards of francs, or 480 millions of pounds; and there was in addition a floating debt, which at the beginning of 1870 had been recently reduced to somewhat less than thirty-two millions of pounds.25
But the Empire bequeathed to the Republic which followed it an appalling legacy. France was compelled to pay Germany an indemnity of 200 millions of pounds, and her own war expenses were only a very few millions below that sum. Nearly the whole of these colossal sums were raised by loans between 1870 and 1874, and added to the permanent capital of the debt.
The French debt had now greatly outstripped the English one. In the early years of the Republic, and especially during the ascendency of M. Thiers, French finances appear to have been managed with economy and skill. But in 1878 a new system of prodigality began which far exceeded that of the Second Empire, and which appears to have continued to the present time. A few plain figures will place the situation before the reader. The nominal value of the debt of France according to the Budget of 1892 was about thirty-two milliards of francs, or 1,280 millions of pounds. The annual debt-charge was about 1,000,250,000 francs, or fifty million pounds—about double the present interest of the debt of Great Britain; and in the twelve years of perfect peace from 1881 to 1892 France increased her debt by more than five milliards of francs, or 200 millions of pounds—a sum equal to the whole war indemnity which she had been obliged to pay to Germany after the war of 1870.26 And this debt is irrespective of the large and rapidly growing debts of the communes and municipalities.
A great part of it was, no doubt, incurred for military purposes. The creation of a magnificent army; the fortification of a country which the loss