Meanwhile, the opposition to the monopoly of the stockbrokers continues. “At all times,” says M. Vidal, “whenever there have been privileges, some men have been found to oppose them. Of course, these men are not theorists or pedants; they are simply men whom this or that privilege prevents from working freely, and who represent the manifestation of that mysterious force of things which tends toward freedom of trade. Commercial law owes its birth only to these protestations of practical men in apparent revolt against the laws, which become the unconscious shapers of future legislation. From the day when there was an Agent de Change there was a “coulissier.” The first called the second a thief, because he encroached upon his privilege. The second hurled back the compliment, because the privilege robbed him of his natural right.”[126]
This has a familiar American ring. In 1843 a voluminous report to the Minister of Justice by the stockbrokers asked that the coulisse be destroyed. Nothing came of it, but in 1859 another attempt succeeded; the coulisse was suppressed. But the level of public credit which, it was hoped, would be raised by the suppression, actually sank. The business of the coulisse, and the market it created, disappeared with the coulisse itself. The government was very sensitive then as now in the matter of market prices for its rentes, and after the laborious process of hoisting them to 71, it was distressing to find that, coincident with the abolition of the curb market, they had fallen to 69. So, in 1861, the coulisse was permitted to reappear, and I fancy the days of its suppression are now at an end.
But the old hostility will break out again when business slackens, for the French have a saying that “horses fight when there is no more hay in the manger.” The problem is a pretty one from any angle, especially from the standpoint of American stockbrokers. It would seem plain that the monopoly, as such, cannot forever continue, yet the government faces a financial power of tremendous strength—a Frankenstein which the State itself has created—“and of which,” to quote M. Vidal, “it can rid itself only by indemnifying it.” At the present time the 70 memberships are worth 96,000,000 francs as a grand total; meantime, the longer the problem is postponed the more valuable they will become as the size and importance of the Paris market increases.
“But the French government does not seem inclined to study the question seriously; first, because the stockbrokers would have to be indemnified; and, secondly, because the stockbrokers themselves are desirous of holding on to their present monopoly. As time passes, the securities, continually on the increase, tend to increase their profits. A financial power has been created whose existence, whose ever spreading influence, forms the subject of a serious economic problem, which some day may turn out to be an even more serious political problem.”[127]
It is interesting to note, in passing from this subject, that a much larger business is done in the coulisse than in the parquet, due to the fact that the curb brokers are not restricted in their securities as are the stockbrokers. The market for foreign securities alone, on the curb, has made wealthy men of many of the coulissiers. They publish a special quotation list, and while they have no officially fixed commission rates, these are established by custom and in practical operation they work satisfactorily. As might be expected, the curb brokers require from their customers smaller margins than those exacted by the stockbrokers—another reason why their business is large; again, the clients of the curb broker may attend the Bourse with him, be present and confer with him while he buys or sells for them, and in this way get into close touch with the market, a privilege not so easily enjoyed by the client of the stockbroker.
The Official Paris Bourse is open from 12 noon to 3 P.M.; the coulisse from 11:45 A.M. to 4 P.M. The Official List is published daily, and is divided into two parts, the first containing a full list of all the officially listed securities and of the dealings in them, and the second part a list of the dealings in what we used to call in New York “the unlisted department.” Rates of Exchange, prices of gold and silver bullion, quotations of treasury bonds, and the rates of the Bank of France for discounts, interest, and loans, are also included. The coulisse also issues a list.
The volume of transferable securities in negotiation through the medium of the Paris stock markets was estimated by M. Alfred Neymarck in his report to the Institut International de Statistique, session of 1907, at 155,000,000,000 francs, an amount slightly in excess of the listed securities on the New York Stock Exchange. Of this total, which has been increased somewhat since 1907 through the admission of various Russian industrial securities, 65,000,000,000 francs were in French securities, 67,000,000,000 in foreign securities on the official (parquet) market, and 18,000,000,000 on the coulisse. Of home securities, the value of French rentes is here estimated at 24,000,000,000 francs, of bonds of the City of Paris, of treasury bonds, including those of the department and colonies, at 3,069,000,000; insurance securities at 702,000,000; those of the Crédit Foncier at 4,447,000,000; of banks and credit companies at 3,101,000,000; of railroad and navigation companies at 24,268,000,000; of railways and tramways at 2,200,000,000; of electricity, iron mills, foundries, and coal mines, at 2,463,000,000.
Of the foreign securities in the French market, Russian securities were valued at 10,000,000,000 francs in 1907, although they are to-day considerably in excess of that sum; divers foreign government funds at 47,000,000,000 and foreign railway securities at 6,000,000,000.[128]
Next to London, Paris easily leads the markets of the world from the standpoint of power and resources in an international sense. It is the great market for Russian bonds and for Russian industrials, speculation in the latter having reached such volume in 1912 as to lay the French public open to the charge of having lost its head, something that has not occurred in France since the Panama frenzy of 1894. France also holds most of the Spanish and Portuguese (3,500,000,000 francs) debt and has large capital invested in Egypt and the Suez Canal (3,500,000,000 francs). Capital investments in Roumania and Greece, Argentine, Brazil and Mexico, Tunis and the French colonies, Austria and Hungary, Italy, China and Japan, United States and Canada, Great Britain, Belgium and Holland, Germany, Turkey, Servia and Bulgaria, and Switzerland, aggregate 16,150,000,000 francs, distributed in value in the order named.
The caution of French investors is proverbial; notwithstanding the two outbursts of imprudence that have occurred in this generation, it is difficult to induce the Frenchman to place his money in anything not a safe interest-yielding security under French laws. In no other country is investment raised to a higher plane, and speculation confined to a lower one. The political nature of the relationship between France and Russia has resulted from time to time, in patriotic subscription of French funds to Russian government loans, and thence to Russian industrials of all kinds, but the latter have suffered so severely in the demoralization of the autumn of 1912 as to justify the prediction that their popularity with the French has been seriously impaired.