Marx in Neue Rheinische Zeitung October 1848

Thiers’ Speech Concerning a General Mortgage Bank with a Legal Rate

Source: MECW Volume 7, p. 467;
Written: by Marx on October 13, 1848;
First published: in the Neue Rheinische Zeitung No. 116, October 14, 1848.

M. Thiers is publishing in the Constitutionnel a pamphlet about Property^[306]. We shall take up this classically written triviality more thoroughly as soon as the publication has appeared in its entirety. M. Thiers has suddenly discontinued it. For the time being it is enough for us to observe that the “great” Belgian newspapers, the Observateur and the Indépendance, rave about M. Thiers’ work. Today we shall follow up for a moment the speech dealing with mortgage debentures^[307] of which M. Thiers delivered on October 10 in the French National Assembly, a speech which according to the Belgian Indépendance has dealt the “coup de grâce” to paper money. But M. Thiers is also, as the Indépendance says, an orator who handles political, financial and social questions equally well.

This speech interests us only because it illustrates the tactic of the knights of the old state of affairs, a tactic with which they correctly confront the Don Quixotes of the new state of affairs.

If you demand a partial reform of the industrial and commercial conditions as was done by M. Turck whom Thiers was answering, they will confront you with the concatenation and interaction of the organisation as a whole. If you demand the transformation of the organisation as a whole, then you are destructive, revolutionary, unscrupulous, utopian and you overlook partial reforms. Hence the result: leave everything as it is.

M. Turck for example wants to make it easier for the peasants to turn their landed property to account by means of official mortgage banks. He wants to bring their property into circulation without it having to pass through the hands of usurers. For in France, as generally in the countries where the land is divided into lots, the power of the feudal lords has been transformed into the power of the capitalists and the feudal obligations of the peasants have been transformed into bourgeois mortgage obligations.

What does M. Thiers reply to begin with?

If you want to help the peasant by means of public banks you will encroach upon the small tradesman. You cannot aid one without hurting the other.

Consequently we have to transform the entire system of credit?

By no means! That is a utopia. Thus M. Turck is dismissed without ceremony.

The small tradesman for whom M. Thiers cares so tenderly is the big Bank of France.

The competition of paper bills for two thousand million mortgages would ruin its monopoly and dividends and perhaps still something more. Behind M. Thiers’ argument therefore stands Rothschild in the background.

Let us take up another of M. Thiers’ arguments. The mortgage proposal, M. Thiers states, does not actually concern agriculture at all.

M. Thiers remarks that it lies in the “nature” of things that landed property can be put into circulation only under onerous conditions, that it can be turned to account only with difficulty and that capital shuns it, so to speak. For, he says, it yields only a small profit. But on the other hand, M. Thiers cannot deny that it lies in the “nature” of modern industrial organisation that all industries, hence agriculture as well, only prosper if their products and their instruments can easily be turned to account, put into circulation and mobilised. This is not the case with land. Hence the conclusion would be: agriculture cannot prosper within the existing civilised conditions. Therefore the existing conditions must be changed and M. Turck’s proposal is a small, even if inconsistent, beginning. By no means! exclaims M. Thiers. “Nature”, i.e. the present social conditions, condemns agriculture to its present state. The present social conditions are “nature”, i.e. they are unalterable. The assertion of their immutability is, of course, the most irrefutable proof against proposals for any change. If “monarchy” is nature then any republican attempt is a rebellion against nature. According to M. Thiers, it is also obvious that landed property naturally always yields the same small profits whether the capital is advanced to the landowner at 3 per cent by the state or at 10 per cent by the usurer. Thus it is by virtue of “nature”.

By identifying industrial profit with the rent yielded by agriculture, M. Thiers also makes an assertion which plainly contradicts the present social conditions which he calls “nature”.

Whereas industrial profit in general falls constantly, rent of land, i.e. the value of the soil, rises constantly. Thus M. Thiers ought to explain the phenomenon that the peasant is constantly becoming more impoverished in spite of it. Of course, he does not want to discuss that subject.

Furthermore Thiers’ comments on the difference between French and English agriculture are really of a remarkable superficiality.

Thiers instructs us that the entire difference consists of the land tax. We pay a very high land tax, the Englishmen none. Apart from the inaccuracy of the latter assertion, M. Thiers certainly knows that in England agriculture is burdened with the poor-rate as well as a mass of other taxes which do not exist in France. M. Thiers’ argument is used in its inverted meaning by English adherents of small-scale agriculture. Do you know, they ask, why English corn is more expensive than the French? Because we pay a rent and a high rent at that, something that the French do not do since on the average they are not tenants but small proprietors. Therefore, long live small property!

It takes the entire insolent triviality of Thiers to reduce the English concentration of [ownership of] land, the instrument of labour, whereby the use of machinery and the division of labour is made possible on a large scale in agriculture, and the interaction of English industry and English trade with agriculture — to reduce all these highly complex relations to the meaningless phrase that the English pay no land tax.

We shall contrast M. Thiers’ opinion that the present mortgage procedure in France is a matter of indifference to agriculture with the opinion of the greatest French agricultural chemist. Dombasle has proved conclusively that French agriculture will become an impossibility if the present mortgage system in France continues to develop according to “nature”.

What insolent shallowness it takes anyway to assert that landed property relations are immaterial to agriculture, in other words that the social relations under which production takes place are immaterial to production!

By the way, there is hardly any need to add that M. Thiers, who wants to retain credits for the big capitalists, cannot give any credit to the small ones. It is precisely the credit of the big capitalists which spells lack of credit for the small ones. We deny, to be sure, that within the present system it is possible to aid the small landed proprietors by some clever financial trick. Thiers, however, had to maintain this view since he regards the present world as the best of all possible worlds.

In regard to this part of Thiers’ speech we want to make just one further observation: by opposing the mobilisation of landed property and on the other hand praising English conditions, he forgets that it is exactly in England that agriculture possesses in the highest degree the advantage of being run like a factory and that the rent of land, i.e. landed property, is a movable, transferable security quoted on the Stock Exchange just like any other. Factory-type agriculture, i.e. the management of agriculture in the manner of big industry, on its part requires the mobilisation and exchangeability of landed property with commercial facility.

The second part of M. Thiers’ speech consists of attacks on paper money in general. He labels the issuing of paper money on the whole as counterfeiting. He reveals to us the great truth that if one throws too large a quantity of the means of circulation, i.e. money, on the market, one devalues money itself and thus cheats doubly: the individual and the state. Allegedly this is especially the case with mortgage banks.

All these discoveries can be found in the worst catechisms of political economy.

Let us distinguish. It is clear that we do not increase production, i.e. real wealth, by arbitrarily increasing money, be it paper or metal currency. We do not double our tricks in a card game by doubling the chips.

On the other hand it is just as clear that if production is inhibited by a lack of chips, of means of exchange, of money, every increase of the means of exchange, every decrease in the difficulty of obtaining the means of exchange, implies at the same time an increase in production. Bills of exchange, banks etc. owe their origin to these needs of production. In this way mortgage banks can lead to the improvement of agriculture.

M. Thiers, however, does not fight for metal currency as opposed to paper money. He has speculated too much on the Stock Exchange to be swayed by the prejudices of the old mercantilists. What he opposes is the regulation of credit by society as represented by the state as against the regulation of credit by monopoly. Thus Turck’s proposal for a general mortgage bank whose bills would have a legal rate of exchange was the beginning of a regulation of credit in the general interest of society, even though this proposal in isolation means little.