About the end of July 1805 the embarrassment which sometime before had begun to be felt in the finances of Europe was alarmingly augmented. Under these circumstances it was obviously the interest of Ouvrard to procure payment as soon as possible of the 32,000,000 which he had advanced for Spain to the French Treasury. He therefore redoubled his efforts to bring his negotiation to a favourable issue, and at last succeeded in getting a deed of partnership between himself and Charles IV. which contained the following stipulation:—"Ouvrard and Company are authorised to introduce into the ports of the New World every kind of merchandise and production necessary for the consumption of those countries, and to export from the Spanish Colonies, during the continuance of the war with England; all the productions and all specie derivable from them." This treaty was only to be in force during the war with England, and it was stipulated that the profits arising from the transactions of the Company should be equally divided between Charles IV. and the rest of the Company; that is to say, one-half to the King and the other half to his partners.
The consequences of this extraordinary partnership between a King and a private individual remain to be stated. On the signing of the deed Ouvrard received drafts from the Treasury of Madrid to the extent of 52,500,000 piastres; making 262,500,000 francs; but the piastres were to be brought from America, while the terms of the treaty required that the urgent wants of the Spanish Government should be immediately supplied, and, above all, the progress of the famine checked. To accomplish this object fresh advances to an enormous amount were necessary, for M. Ouvrard had to begin by furnishing 2,000,000 of quintals of grain at the rate of 26 francs the quintal. Besides all this, before he could realise a profit and be reimbursed for the advances he had made to the Treasury of Paris, be had to get the piastres conveyed from America to Europe. After some difficulty the English Government consented to facilitate the execution of the transaction by furnishing four frigates for the conveyance of the piastres.
Ouvrard had scarcely completed the outline of his extraordinary enterprise when the Emperor suddenly broke up his camp at Boulogne to march to Germany. It will readily be conceived that Ouvrard's interests then imperatively required his presence at Madrid; but he was recalled to Paris by the Minister of the Treasury, who wished to adjust his accounts. The Emperor wanted money for the war on which he was entering, and to procure it for the Treasury Ouvrard was sent to Amsterdam to negotiate with the House of Hope. He succeeded, and Mr. David Parish became the Company's agent.
Having concluded this business Ouvrard returned in all haste to Madrid; but in the midst of the most flattering hopes and most gigantic enterprises he suddenly found himself threatened with a dreadful crisis. M. Desprez, as has been stated, had, with the concurrence of the Treasury, been allowed to take upon himself all the risk of executing the treaty, by which 150,000,000 were to be advanced for the year 1804, and 400,000,000 for the year 1805. Under the circumstances which had arisen the Minister of the Treasury considered himself entitled to call upon Ouvrard to place at his disposal 10,000,000 of the piastres which he had received from Spain. The Minister at the same time informed him that he had made arrangements on the faith of this advance, which he thought could not be refused at so urgent a moment.
The embarrassment of the Treasury, and the well-known integrity of the Minister, M. de Barbe Marbois, induced Ouvrard to remit the 10,000,000 piastres. But a few days after he had forwarded the money a Commissioner of the Treasury arrived at Madrid with a ministerial despatch, in which Ouvrard was requested to deliver to the Commissioner all the assets he could command, and to return immediately to Paris.
The Treasury was then in the greatest difficulty, and a general alarm prevailed. This serious financial distress was occasioned by the following circumstances. The Treasury had, by a circular, notified to the Receivers-General that Desprez was the holder of their bonds. They were also authorised to transmit to him all their disposable funds, to be placed to their credit in an account current. Perhaps the giving of this authority was a great error; but, be that as it may, Desprez, encouraged by the complaisance of the Treasury, desired the Receivers-General to transmit to him all the sums they could procure for payment of interest under 8 per cent., promising to allow them a higher rate of interest. As the credit of the house of Desprez stood high, it may be easily conceived that on such conditions the Receivers-General, who were besides secured by the authority of the Treasury, would enter eagerly into the proposed plan. In short, the Receivers-General soon transmitted very considerable sums. Chests of money arrived daily from every point of France. Intoxicated by this success, Desprez engaged in speculations which in his situation were extremely imprudent. He lent more than 50,000,000 to the merchants of Paris, which left him no command of specie. Being obliged to raise money, he deposited with the Bank the bonds of the Receivers- General which had been consigned to him, but which were already discharged by the sums transmitted to their credit in the account current. The Bank, wishing to be reimbursed for the money advanced to Desprez, applied to the Receivers-General whose bonds were held an security. This proceeding had become necessary on the part of the Bank, as Desprez, instead of making his payments in specie, sent in his acceptances. The Directors of the Bank, who conducted that establishment with great integrity and discretion, began to be alarmed, and required Desprez to explain the state of his affairs. The suspicions of the Directors became daily stronger, and were soon shared by the public. At last the Bank was obliged to stop payment, and its notes were soon at a discount of 12 per cent.
The Minister of the Treasury, dismayed, as well may be supposed, at such a state of things during the Emperor's absence, convoked a Council, at which Joseph Bonaparte presided, and to which Desprez and Wanlerberghe were summoned. Ouvrard being informed of this financial convulsion made all possible haste from Madrid, and on his arrival at Paris sought assistance from Amsterdam. Hope's house offered to take 15,000,000 piastres at the rate of 3 francs 75 centimes each. Ouvrard having engaged to pay the Spanish Government only 3 francs, would very willingly have parted with them at that rate, but his hasty departure from Madrid, and the financial events at Paris, affected his relations with the Spanish Treasury, and rendered it impossible for him to afford any support to the Treasury of France; thus the alarm continued, until the news of the battle of Austerlitz and the consequent hope of peace tranquillised the public mind. The bankruptcy of Desprez was dreadful; it was followed by the failure of many houses, the credit of which was previously undoubted.
To temper the exultation which victory was calculated to excite, the news of the desperate situation of the Treasury and the Bank reached the Emperor on the day after the battle of Austerlitz. The alarming accounts which he received hastened his return to France; and on the very evening on which he arrived in Paris he pronounced, while ascending the stairs of the Tuileries, the dismissal of M. de Barbs Marbois. This Minister had made numerous enemies by the strict discharge of his duty, and yet, notwithstanding his rigid probity, he sunk under the accusation of having endangered the safety of the State by weakness of character. At this period even Madame de Stael said, in a party where the firmness of M. Barbs Marbois was the topic of conversation—"What, he inflexible? He is only a reed bronzed!" But whatever may be the opinion entertained of the character of this Minister, it is certain that Napoleon's rage against him was unbounded. Such was the financial catastrophe which occurred during the campaign of Vienna; but all was not over with Ouvrard, and in so great a confusion of affairs it was not to be expected that the Imperial hand, which was not always the hand of justice, should not make itself somewhere felt.
In the course of the month of February 1806 the Emperor issued two decrees, in which he declared Ouvrard, Wanlerberghe, and Michel, contractors for the service of 1804, and Desprez their agent, debtors to the amount of 87,000,000, which they had misapplied in private speculations, and in transactions with Spain "for their personal interests." Who would not suppose from this phrase that Napoleon had taken no part whatever in the great financial operation between Spain and South America? He was, however, intimately acquainted with it, and was himself really and personally interested. But whenever any enterprise was unsuccessful he always wished to deny all connection with it. Possessed of title-deeds made up by himself—that is to say, his own decrees—the Emperor seized all the piastres and other property belonging to the Company, and derived from the transaction great pecuniary advantage,—though such advantage never could be regarded by a sovereign as any compensation for the dreadful state into which the public credit had been brought.