528 Ch. 14 • The Industrial Revolution
Furthermore, banks—like investors—faced unlimited liability in the event
of bankruptcy. Deposit banks were specifically denied the right to invest in
private industry, except for investment in companies enjoying state conces
sions, such as those building the railways. Even normal business transac
tions were complicated by the fact that more than 90 percent of payments
had to be made in specie (gold or silver). Until the late 1850s, the smallest
banknote was worth 500 francs (the equivalent of almost a year’s earnings
for an unskilled worker). Banks thus had considerable difficulty attracting
ordinary depositors.
The French state shared investors’ suspicions of companies of any size,
limiting the number of investment4 joint-stock companies” that could be cre
ated. Furthermore, many companies were cautious family firms that invested
profits in land rather than in the expansion of their businesses. With many
peasant families still hiding their money in their houses or gardens, it was
difficult to raise investment capital.
In France, too, textile production provided the catalyst for industrial
development. At the same time, between the end of the Napoleonic Wars in
1815 and the beginning of the economic crisis of 1846-1847, the produc
tion of coal tripled, and that of pig iron doubled. But the reputation of French
industry proudly rested on the production of luxury products, “articles of
Paris” such as gloves, umbrellas, and boots, as well as fine furniture. Work
shop production—for example of barrels, pipes, and watches—expanded into