Crédit Mobilier

Crédit Mobilier (officially the Société Générale du Crédit Mobilier, or General Society of Home Credit) was a French banking company, and one of the most important financial institutions of the world during the mid-19th century. It had a major role in the financing of numerous railroads and other infrastructure projects by mobilizing the savings of middle class French investors as capital for vast lending schemes. The Crédit Mobilier investments created vast debts for the countries which accepted these infrastructure loans and was thus indirectly involved in the European occupations of the countries whose governments defaulted on these loans during the worldwide economic depression of the 1870s.

It became a powerful and dynamic funding agency for major projects in France, Europe, North Africa and the world at large. It specialized in mining development; it funded other banks including the Imperial Ottoman Bank and the Austrian Mortgage Bank; it funded railway construction and insurance companies, as well as building contractors. The bank had large investments in transatlantic steamship lines, urban gas lighting, a newspaper and the Paris public transit system.

In 1866/7, the bank underwent a severe crisis, and the Pereire brothers were forced to resign at the demand of their enemy, the Banque de France; the Crédit Mobilier never recovered.

Established in 1852, the French Government sanctioned the statutes of the new bank with the name of the Société Générale du Crédit Mobilier, with a capital of 60,000,000 francs. It was founded by the Pereire brothers with a view to countering James Mayer Rothschild's alliance with the industrialist Paulin Talabot regarding competition for the railway expansion. It was allowed to acquire shares of public companies, and to pay calls made upon it in respect of such shares by its own notes or obligations; also to sell or give in security all shares thus acquired. The operations of the society were conducted upon a very extensive scale. A operating on a principle of limited liability, its initial investments came from large industrialists, but its capital was vastly increased by accepting investments from the general public.

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