Creation and growth of Crédit Foncier de France 1848 › 1880

The economic and financial crisis that rocked France at the end of the 1840s was due in large part to a lack of credit. Partly responsible for the fall of the July Monarchy, the crisis spurred the State to take a more active role in the economy, which resulted in the creation of lending institution under the authority of the State whose purpose was to contribute to the modernisation and development of financing channels.

Mortgage lenders are never sure to be paid back; buyers are never sure they will, one day, actually own their home; renters are never sure they are paying the actual owners.

General Dupin, public prosecutor.

1852

The “Banque foncière de Paris”, the first société de crédit foncier, is created in 1852

Creation

The first société de crédit foncier, named “Banque foncière de Paris”, founded by Louis Wolowski himself, receives authorisation, one month later, by a decree issued on 28 March 1852.

It is created as a public limited company (société anonyme) with share capital of 25 million francs.

It is granted the exclusive right to conduct business, over a period of 25 years, in the departments under the jurisdiction of the Paris appeals court (Seine, Seine-et-Oise, Seine-et-Marne, Eure-et-Loir, Aube, Marne-et-Yonne). It is authorised to take non-interest bearing deposits that are invested into mortgage-backed loans and converted into obligations foncières. Its founders included bankers and businessmen such as Émile Pereire, a follower of Saint-Simon, parliamentary leaders and a few property owners, including Polish nobles linked to Wolowski, who pledged an agricultural guarantee to the project. The promoters of sociétés de crédit foncier, such as Léon Faucher and Adolphe Dailly, were also present. Antoine Hailig was Chairman of the Board of Directors and Louis Wolowski was appointed to be its director. Illustrating the imperial backing of the project, the emperor subscribed to 100 shares in the new company; in fact, the imperial family would take out several loans from the company in the 1860s.

Louis Wolowski (1810-1876)Louis-Wolowski

One of the main founders of Crédit Foncier de France in 1852.

Born in Poland, Louis Wolowski completed part of his studies in France between 1823 and 1827. His father, a lawyer, was asked to fill an important position in the provisional government that emerged from the liberal revolution in Poland in 1830. Subsequently, when the revolution was repressed, the family had to seek exile in Paris at the end of 1831. He founded the Revue de législation et de jurisprudence, a review specialising in law and jurisprudence in 1834. His work opened the door to a professorship at the Conservatoire national des arts et métiers in 1838. In 1843, he was named Chair of Industrial Legislation at the conservatory.

From 1854 to 1873 he was a director of Crédit Foncier.

His liberal convictions seem to have prevented him from becoming governor of the institution. Alongside his professional career, Louis Wolowski got involved in politics. As a supporter of the July Monarchy upon his arrival from Poland, he supported the Second Republic and was elected to the National Assembly as a representative of the Seine Department. Under the Second Empire, he abandoned his political career before taking it back up again under the Third Republic. Elected to the National Assembly, he voted in favour of the constitutional laws of 1875, which reinforced the republican system. He became a permanent senator shortly before his death.

Baron Georges Eugène Haussmann, (1809-1891)Le Baron Georges Eugène Haussmann

He was the driving force behind the urban transformation of Paris

Haussmann’s transformation: a catalyst for change

Wishing to give the Empire a capital worthy of the regime and capable of rivalling London, Napoléon III charged Baron Haussmann this ambitious endeavour as Préfet de la Seine, a position he filled from 1853 to 1870.

The broad outline of the transformation of Paris is clear: improve the circulation of air, people and goods.

The first part of the public works, two-thirds of which was subsidised by the State, was designed to create avenues forming a grid in the centre of Paris, notably a West-East thoroughfare extending the rue de Rivoli to faubourg Saint-Antoine and a North-South boulevard connecting boulevard de Sébastopol and boulevard Saint-Michel. The administrative core of Paris was also modified. An “administrative zone” was created that included the central Police station, a fire station and the courthouse. On the right bank of the River Seine, the central marketplace (Les Halles) was rebuilt.

To facilitate the movement of goods and people, a circular network of rail stations was created. Its stations were linked together and connected to the major avenues as part of the construction of the second network in 1858. Its funding was more problematic and relied on granting concessions to property companies and a system of short-term notes issued by the Caisse des travaux de Paris, specially created by Haussmann for the project.

The third network, halted in the mid-1860s and entirely financed by the city of Paris, extended these works and succeeded in connecting all neighbourhoods in a capital that had been expanded considerably. In fact, in 1860, the neighbouring towns were integrated within the Paris city limits, doubling the city’s population, which reached 1.7 million inhabitants and jumped from 12 to 20 arrondissements.