Nineteenth-century Europe was clearly in transition from one to the other. The clientele of the original gas firms had consisted primarily of commercial establishments on the first floors of buildings; even in the s as the era of electricity was dawning, the PGC still relied heavily on those users. The president of the company affirmed in that a majority of subscribers 74, out of , were industrial or commercial enterprises. Between and , supplying gas to residents was an appendage to the main business of lighting commercial and industrial establishments.
The PGC could not have been founded at a better moment to grow and prosper by bringing gas to Parisian businesses. The capital was about to undergo two decades of dramatic changes that would enlarge and enrich this clientele. Since gas was the energy source of choice in terms of efficiency, convenience, and novelty, commercial firms adopted it as a matter of course.
In the modern Paris that emerged under Baron Haussmann, urban renovations accompanied and accentuated the commercial transformation of the capital. Luxurious apartment buildings appeared along Haussmann's attractive boulevards, especially in the western quarters, and central Paris lost residents but was filled during the day by salespeople, clerks, business agents, and wholesalers. A new shopping district arose to the north and west of the grands boulevards to supplement the older one around the Palais Royal and along the rue de Richelieu second arrondissement.
It was no wonder that the portion of the capital's working population earning a living from commerce rose from 12 to 30 percent during the golden age of the PGC. The commercial vocation of Paris was favored by two great transformations, the booming world economy of the s and the railroad revolution.
Paris became the center of a vast export trade as the well-off in Britain, the Americas, and elsewhere purchased its handicrafts. French exports rose fivefold between and , and a quarter of the manufactured goods sent abroad was made in Paris. His figures are not perfectly consistent with those in other sources, but they at least have an illustrative value. Paris, n. They made tourism, retailing, and all other sorts of exchange of information and personnel increasingly feasible.
Haussmannization concentrated these changes by giving the growing bourgeois population new neighborhoods, a new housing stock, and new patterns of urban life. Philip Nord has argued that department stores were products of the spatial reorganization of the city depending as they did on massive concentrations of consumers on the boulevards. These emporiums became among the best customers of the PGC, but they provide only one example of the ways commercial expansion gave a boost to gas consumption.
The British writer Philip Gilbert Hamerton claimed that his countrymen had invented the home but the French, especially the Parisians, "invented the street. The use of gas was closely associated with public display. One observer of described the passage des Panoramas in the second arrondissement as "a fairy country. On the use of gas by department stores in the s, see AP, V 8 O , no.
By no means was the gas lighting in arcades always so brilliant. Emile Zola described the Passage du Pont Neuf, lit by three gas jets, as dingy and sinister-looking. Tancock Baltimore, , p. The great establishments of Haussmann's boulevards were the PGC's most important customers. The Tivoli-Vaux-Hall paid annual bills of nearly forty thousand francs. The customers consuming more than forty thousand cubic meters annually 0. This clientele had enormous influence as well. Their glamour, prestige, and visibility ensured that when people thought of the City of Lights, they had gas lighting in mind.
Such large customers made gas seem not only efficient but also progressive. They set the style for a myriad of smaller stores, offices, and pubs.
The lighting needs of commercial Paris easily surpassed the industrial uses of gas, though there were important exceptions. Brewers and liquor distillers also took advantage of gas as an easily regulated source of heat. Some of the largest printers used gas motors to drive their presses and ranked with department stores as customers. On the whole, however, gas had not entered directly into production processes, and manufacturers used it mainly for lighting.
The largest jewelry manufacturer in Paris, Savard, was only a modest consumer; its craftsmen did not use coal gas to fuel their burners. During the. Source: AP, V 8 O 1 , no.
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Gas use was nearly universal among commercial and industrial firms. Approximately four-fifths of the ninety-three thousand workshops and stores in Paris of used gas.
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Reliance on less efficient and less elaborate forms of energy was not a simple matter of affordability. The Parisian bourgeoisie was almost as hesitant as the common people about putting gas fixtures into its homes. The use of gas thus raises interesting questions about preferences, habits, and innovations among French consumers. Claude Monet's painting of a Parisian apartment—luxurious but lacking gaslights. Only 15 percent of all residences were adjacent to mounted mains and therefore were potential gas users. The policies of the PGC presented one reason for the limited availability of gas, but a discussion of marketing practices can and should be postponed until.
The matter that concerns us at present is that most households that had the option of lighting with gas did not do so. In the city as a whole, only a third of the apartments near mounted mains used gas. The range was from 58 percent in the wealthy eighth arrondissement to 8 percent in the poor twentieth. No more than 5 percent of all Parisian residences were customers of the PGC. Far from being a necessity of life, domestic gas was a curiosity see table 3. Evidently the use of gas had not become a class phenomenon, dividing the bourgeoisie from the urban masses.
To be sure, there were wealthy people who could not have done without gas. The elegant town house of the duc de Montesquieu on the quai d'Orsay had fifty gas jets becs de gaz in Montmartre Theater. At the other extreme, Parisians of modest means hardly ever lit with gas. Less than 1 percent of the households paying less than five hundred francs in annual rent—below the threshold of bourgeois residences—were customers of the PGC.
Most of the apartments with access to mounted mains rented for at least eight hundred francs a year and as such were among the costliest 10 percent of Parisian residences. Fewer than a thousand apartments out of sixteen thousand in the sixteenth arrondissement lit with gas. Clearly, gas at the end of its golden age had not even become a daily luxury in which the well-off indulged. It is a commonplace that French consumers, like businessmen, were slow to accept changes. Scholars have often stressed deeply rooted cultural values and distinctive collective attitudes in accounting for their preferences.
Alain Corbin, for example, explains the backwardness of French hygienic practices relative to the British in terms of unconscious predispositions regarding the body. He concludes that income and degree of urbanization were less decisive factors. The French bourgeoisie supposedly spent money on food, clothes, and leisure but not on making the home comfortable. A full consideration of the material conditions attending gas use reduces, if not eliminates, the autonomous role of cultural values in shaping consumer behavior.
The high rates for gas in Paris played a role in limiting its use. The press screamed about this subject at times, and any Parisian who read a newspaper regularly could learn that residents of Berlin, Brussels, and. See also Rosalind H. Amsterdam paid only twenty centimes. Londoners paid half the rate of Paris; per capita consumption in London was about twice as high. Engineers had no trouble demonstrating quantitatively that even at thirty centimes gas provided more efficient lighting than kerosene, candles, or its other immediate competitors. It would not have been a great burden on bourgeois residents to light with gas as long as they used it prudently.
A hundred hours of gas lighting would have cost them only three francs for the fuel. Many Parisians refrained from using gas at home because it had certain disadvantages. Corbin has demonstrated an escalating sensitivity among French people of the nineteenth century to foul odors and an ever-stronger desire for fresh, circulating air. The public was well aware that gas lighting made rooms stuffy and emitted more heat than competing sources of lighting. One engineer established that gas produced almost twice the carbon dioxide that kerosene did and warned of headaches, nausea, and even slow intoxication.
The residues of gas combustion faded fabrics, discolored ceilings, and marked walls. On the relative efficiency of gas lighting, see E. Organe officiel de la chambre syndicale des travailleurs du gaz , no. That odor in fact was the source of a popular medical myth that identified gas plants as a refuge from cholera epidemics. One editor caricatured the PGC as a sinister figure surrounded by clouds of soot, sulfuric acid, and carbonic acid.
The hesitations were all the more serious in that gas was costly and inconvenient to install. They also had to rent or buy a meter and certain cutoff nozzles on the mains. These charges amounted to thirty-six francs a year, nearly as much as a modest consumer would spend on the gas itself. In addition, the PGC required a security deposit, which seemed to annoy potential customers. Even Baron de Rothschild and an English lord asked to be exempted from the requirement.
Estimates placed the cost of initiating gas service between sixty and eighty francs. Making the installation expenses especially burdensome was the tran-siency of Parisian tenants, who might have used gas if they had found it previously installed in their new lodgings. The speculative construction of the Second Empire, which helped to renew the bourgeois housing stock, did give the PGC some support in this area. The industrialist Cail did the same for the sizable residential complex he developed in the tenth arrondissement.
There were even isolated efforts to bring new, gas-lit apartments to the better class of wage earner. Despite these promising initiatives most tenants were unlikely to find gas fixtures ready for them to use as they took up new lodgings. Mounted mains went primarily into new apartment buildings and hardly touched the older stock of housing. Even in most new, luxurious buildings there was gas only in the hallways, not in individual apartments. Nouvelles maisons de Paris et des environs, 3 vols. Paris, , ; AP, V 8 O no. The rental market favored owners until the mids, and they easily leased unimproved properties.
Even if landlords or tenants decided to pay for the installation, they were likely to find the experience frustrating. The delays and errors arising from renting the meter, obtaining the obligatory certification from the prefecture, and completing the paperwork were so notorious that the Daily Telegraph of London satirized the situation in The PGC's engineers were certain that the prefect's rigor and slowness in inspecting the work seriously discouraged the operation. She had become a customer, installing the proper pipes and renting a meter without realizing that the gas mains on her street did not yet reach her building.
The company had been trying to extend the mains, but the prefect had withheld authorization for more than a year. When at last the company was able to do the work and supply Jacquemart's cafe, the payment bureau ordered a cutoff of the service because the owner had not paid rent on her unused meter. Residents might have persevered through the difficulties and spent what they had to for installation if indeed gas was as convenient and necessary as its proponents asserted.
However, gas did not have many applications and did not always accord with bourgeois life-styles. Lighting was the only use most Parisians envisioned for gas until the last years of the century. The PGC had originally hoped to develop gas heating but abandoned the idea in for lack of satisfactory stoves. Existing heaters spread disturbing odors and emitted hydrochloric acid.
Moreover, gas heating was not economical. The company chose to develop coke, one of its by-products, as a source of heat and did not take gas heating seriously again until the s. British gas experts argued that public inspection improved the quality of work done on French installations. See Suggs, Domestic Uses , p. The PGC itself heated its offices with coke, not gas. Gas engineers argued for the economy and convenience of gas cooking, but many customers did not like the taste of meats prepared through gas grilling.
Interest in culinary uses of gas was so low that special cookbooks did not appear until the end of the century. Domestic servants slowed the entry of gas into the bourgeois home. Since they spent so much of their time in the kitchen, it is understandable that they would want a stove that heated the room during the winter as well as cooked the meals. One trade journal counseled mistresses to instruct their servants on the rationality and progress embodied in gas cooking, but maids had their own logic.
When the PGC finally began to be concerned about the failure of its product to penetrate the residential market in the late s, management probed the ways gas might serve the bourgeoisie. A consultant drew attention to the large Parisian classe moyenne, those paying five hundred to fifteen hundred francs in rent, who had so far been resistant to gas. The reason, he believed, was that these families spent most of their time in the dining room, which was rarely served by gas fixtures.
When landlords had bothered to add gas lighting at all, they almost always put it in one room, the salon. Moreover, gas chandeliers lustres attractive enough for the dining room were uncommon and expensive. The consultant concluded that gas failed to enhance family life for these thousands of residents, so the tenants ignored it. Faced with all these problems, Parisians had a reasonable alternative to gas. Kerosene lamps arrived in France in the s and immediately hampered the PGC from developing a domestic clientele.
Per capita consumption of kerosene increased fivefold in Paris between and This source of illumination did not require expensive or cumbersome installation. Cheap and even attractive lamps quickly came to the market. They could be carried from room to room. Taken solely as a source of illumination, gas could not easily compete with kerosene. There is little wonder why the PGC was repeatedly accused of conspiring to keep duties on that fuel very high. Thus there is no reason to assume that French consumer preferences were guided primarily by an unconscious scorn for the novel or an indif-.
Bourgeois cuisine entailed slow cooking over wood fires. Organe de l'Union syndicale des employes de la Compagnie parisienne du gaz , no. He asserted that domestic design in his day was "more concerned with hygiene and comfort than with ornament" and that rising standards of comfort provided the guiding principle for architects.
They saw and appreciated gas in their stores, offices, and shops but had no strong urge to countenance the expense and inconvenience of bringing it into their homes. Hence the PGC benefited from rising standards of lighting mainly to the extent that commercial establishments implemented them. Nonetheless, there was a potentially large domestic market for gas since Parisians were open to new amenities that enhanced their lives at a reasonable cost. The PGC would discover and exploit this market when its older clientele seemed about to abandon gas. The bookkeepers of the PGC were probably unconcerned that the source of the copious revenues they recorded was the business firm rather than the residential customer.
From the clerks' vantage point their employer was faring remarkably well. The company never had an unprofitable year see appendix, fig. Indeed, it reached a new plateau of profitability every year except one between its founding and Profits rose nearly percent during the s as the company benefited from the annexation of the suburbs and from the commercial development of Paris. Returns rose another 65 percent during the s. Top management spoke occasionally, in hushed tones, about the risks of capital, but supplying gas to the stores and offices of the city was in reality a golden opportunity.
The prosperity of the PGC may be measured in several ways. In terms of the portion of annual receipts, gross profits were enormous; they averaged Likewise, operating ratios gross profits as a percentage of expenditures underscore the success of the enterprise, averaging Whereas government bonds yielded percent and the.
Return on capital, in percent. Should payments to the city be considered as part of the profits or as an expenditure? Technically of course, the PGC was sharing its profits with Paris. Yet from the stockholder's perspective the payment was a cost of doing business, an expense no less inevitable than money spent on raw materials. Even if the city's share is deducted from gross profits, the PGC's returns on immobilized capital were still quite high, averaging Since the PGC was a limited-liability corporation, one of the handful in France before the liberalizing laws of and , the stockholders.
The capital of the firm originally consisted of , shares, each with a nominal value of five hundred francs. In the company raised another twenty-nine million francs in equity; but the corporate charter placed limits on the number of shares it could issue, so that was the last time ownership was further dispersed. The company subsequently covered its considerable investment needs through the sale of bonds. By the PGC had million francs of debt. Although reinvestment of profits was the rule among most French firms, the PGC never tapped that source of capital.
The shareholders expected regular returns and grumbled when investment seemed to cut into their income. The identity of the PGC shareholders is destined to remain obscure, for the firm's archives do not contain a file on them. The only source is the proceedings of the annual general assemblies, which listed the stockholders who chose to attend. For , stockholders possessed at least forty-three thousand shares, 40 percent of the outstanding equity. The owners of the merging gas firms still held the largest block of shares: the Dubochet brothers former owners of the Compagnie parisienne had 4, shares, Louis Margueritte former owner of the Compagnie anglaise 2, shares, Isaac Pereire 1, shares.
Ownership was still concentrated at the end of the golden age. In , 1, people held 81 percent of the shares. A comparison of the lists from and shows impressive continuity. Families apparently held the PGC's stock over the long run for the sake of the returns. The duchesse de Galliera 1, shares , the comte de Grammont shares , and the princesse de Broglie 1, shares all prospered from doing so. A detailed study of the acts of succession inheritance tax declarations for the fourth and fifth arrondissements in provides some insight.
Of the estates worth at least five hundred francs declared in these primarily bourgeois districts, eighty-two contained some wealth in the form of stocks. Only six of these held the equity of the PGC; in five of the cases the stocks belonged to women without occupations, and the last case involved a rentier. The average value of their estates was just under sixty thousand francs; each person held an average of seven shares. The portrait is a classical one of small rentiers, who invested in the PGC for the same reason they bought railroad stocks and bonds, to obtain a secure income and long-term capital appreciation.
Dividends, declared every year without exception, rose as high as francs in and were not below francs after see appendix, fig. This represented a return of more than 9 percent on the market value of a share. Those who retained their holdings, as many of the large owners appear to have done, realized considerable capital appreciation see appendix, fig. The market value of shares rose 54 percent between the beginning of and the end of and another 40 percent between and Nor were there many sharp drops to frighten the stockholders.
The key to profitability was of course the high price of gas that the charter allowed the PGC to charge for fifty years. Regardless of whether thirty centimes was a reasonable rate in , production costs fell by almost a third within the first ten years of operation. The PGC earned around twenty centimes on every cubic meter of gas sold. The company even made about five centimes per cubic meter on the fuel sold for street lighting, which was supposed to be "at cost. The coke that remained in retorts after gas had escaped found wide use in Parisian households for heating.
The firm was also fortunate to come into existence just as organic chemicals became essential to industry. Precisely at the moment the artificial dyestuffs industry was taking off, the PGC was one of the world's. Sources of Revenue for Selected Years in percent. Naphthalene, aniline, alizarin, benzol, and naphthas all found important industrial uses. Since they were relatively scarce in the s and early s, the price that the PGC received for these former waste products was quite advantageous. With such assured profits, managers of the PGC might have chosen to overlook wasteful expenditures, but in fact they were extremely conscious of costs.
Producing gas and by-products became markedly less expensive in the s as engineers made some basic changes in the organization of labor and in operating procedures see chapter 4. Their greatest challenge in reducing costs was to save on fuel and coal. Wages accounted for only a small part of operating expenses, but roughly half went to purchase coal, the basic raw material.
In the earliest days of the firm there was discussion of acquiring a mine, but nothing came of it. Its chief procurement officer received pay based on his success at arranging favorable contracts, and there were several agents on the scene at the developing coal fields of northern France. Distribution of Expenditures for Selected Years in percent. The PGC could also take comfort in the fact that when coal prices rose, the company could recoup the loss by charging more for coke. And it did not necessarily have to reduce the coke rates when coal prices fell.
To save money on the roasting of coal was an obsession for production managers. They tinkered endlessly with the mix of fuels, substituting different grades of coal and burning by-products as market conditions dictated. They were even willing to risk angering the touchy stokers, whose hard job was made still more burdensome by constant changes in fuels. The search for the perfect furnace was another constant of managerial activity in the PGC, leading to basic innovations for the gas industry in France. The energetic management seemed rather oblivious to the fact that high gas rates ensured handsome profits regardless of the production costs.
An expenditure the PGC could not control was the amortization of outstanding stocks and bonds. As a corporation with a limited life, these expenses necessarily burgeoned. By the s they already accounted for a tenth of total expenditures—as much as labor—and would continue to put pressure on profit levels see figure 3. Amortization costs were ex-. Moreover, the PGC's negotiators had contrived to have the city pay far more than its share of the expense.
The assets Paris would receive in would never compensate for the contribution it made to amortization costs. Thus stockholders had no real reason to complain about the rising portion of the budget devoted to this expense. With the example of the PGC in mind, most owner-managers might well have conduded that their legendary secrecy about their finn's accounts was fully justified. The profits of the PGC became an issue of public discussion—indeed, scandal. Even financial journals came to regard the firm's accounts in an ironic light.
The Guide financier noted in that "the public might believe that certain institutions are created to satisfy the needs of the people. The public is profoundly mistaken. It is the public that is made for enterprises [like the PGC]; the interests of its shareholders are supreme. Just how exceptional were the accounts of the PGC? The question is difficult to answer because comparative figures are rare and often problematical to use. The isolated cases historians have treated suggest that the gas company earned unusually high profits but was not entirely unique.
A few firms, like the Credit lyon-nais and the Mines de la Grand' Combe, met or exceeded the financial success of the PGC, but only in their most profitable years see figure 4. The public reacted so negatively to the profits of the PGC not only because of their consistently high level but also because they seemed unearned.
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The directors of the Forges d'Alais or Grand' Combe could declare that their investors undertook heavy risks and competed in an open market. The director of the PGC tried to advance a similar defense, but the public did not accept it. Parisians saw the corporation earning copious returns yearly in the safe business of supplying gas at inflated rates.
They saw political manipulation, not entrepreneurship, as the source of its prosperity. Much of the public responded to the PGC as a symbol of privilege and venality—ultimately an insult to the ideals of the Republic. The PGC tried to take advantage of its role as a private firm entrusted with an important public service. On the one hand, any attempt to curb its plans—say, to build a factory in a controversial locale—met with vocal claims that the restriction interfered dangerously with the firm's efforts to fulfill its public trust.
On the other hand, officials who tried to regulate internal operations received a curt reminder of the private nature of the firm. The PGC was generally quite successful in mastering its fate through the s. The parties with grievances against the firm could not find the means for redress. With good reason one writer referred to the PGC as a "state within the state.
Efforts to cheat the gas company, hold it accountable for damages, or prosecute it met with notable failure during its golden age. Dishonest customers soon developed a repertoire of schemes to fool or bypass their meters, but in the end they were usually detected. And the company was ruthless in prosecuting cheaters.
It even sued the estate of a customer who had committed suicide rather than submit to the embarrassment of a trial. Thus tenants' attempts to avoid installation costs by sharing gas from their landlords' conduits were firmly undermined. The company forced customers to switch from hourly rates to metering without having any official fight to do so.
It freely invaded users' premises to search for fraud with the tacit approval of the prefect. Before the threat of electricity the PGC did not actively work to improve street lighting. The firm did not even have a well-equipped laboratory in which to test new lighting technology until after At best, it cooperated with the initiatives of municipal lighting engineers. The public, stirred by ever-rising needs, was not satisfied for long. By interna-. An anonymous customer mailed a payment of a hundred francs for gas that he or she had stolen twenty years earlier.
See no. The potential competitor jolted the PGC's shareholders so much that a special meeting of the board of directors had to be held. The new fuel did provide brilliant illumination but entailed the great expense of double mains, one for gas and one for oxygen. The entrepreneur behind the venture complained bitterly that the PGC and the city engineers conspired to suppress the alternative and never gave it a fair chance.
The PGC took advantage of the charter of to insert a provision that removed any chance for the competitor to get a foothold in Paris. The search for improvements that the company soon undertook on the rue du 4-Septembre was an implicit admission that Parisians had a right to expect better lighting. Ultimately the PGC was fortunate that the municipal council did nothing to hasten the era of electrical lighting. The city slowed the pace of advance for electricity by insisting on experiments even when lighting was well past the testing stage and by debating the concession endlessly.
The aldermen's beneficence toward the PGC was partly the unintended result of administrative inertia and partly the result of the city's dependence on revenues from gas sales. Whether there were more sinister motives is impossible to establish. Incidents of gas fires and explosions provided another, sometimes tragic, context for the public to attack the PGC. A conflagration at the Opera Comique forced the prefect to order theater owners to adopt electricity in Nine people were killed and sixty injured.
As happened so often, the PGC escaped blame for the disaster. The examiners' report found no one at fault. A leaking water pipe had loosened the earth beneath the gas main, and vibrations from surface. Perhaps the excellence of the company's inspection operations and its success at supervising labor go far to explain why the PGC was rarely found culpable for loss of life or property.
Also at work were the vigor of the defense the company always mounted and the courts' preference for finding individuals at fault. The gas company even had its own way with customers and the authorities during the period of revolutionary insurgency following the Franco-Prussian War. With coal supplies dwindling and impossible to replenish, the company ceased providing gas to private customers in November Yet management continued to charge for the rental and upkeep of meters, connector pipes, and valves.
After receiving complaints, "often violent ones," from customers, the company yielded on the rental of meters five months later but insisted on collecting the maintenance fee for the connector pipes and valves. Management did suffer a moment of anguish at the hands of the Communards, but the crisis passed quickly. While he was there, he had the safe opened and seized , francs in cash. The assistant director, Emile Camus, managed to have the money returned within a few days, probably by threatening to extinguish street lights. The Communards were evidently not interested in persecuting even this rich and unpopular corporation.
Management withheld millions of francs it owed the city in duties until the government of Adolphe Thiers was firmly in control. During the Bloody Week the company somehow found arms for its employees, who protected corporate property from the "insurgents. See Rapport, March 28, , p. The only issue that had the power to crystallize inchoate public dissatisfaction into organized protest was the question of gas rates.
The vigorous struggle to lower gas prices between and deserves attention because it combined economic, ideological, and political grievances. It brought the forces of legal and administrative conservatism into conflict with militant republicanism just as the people's regime was rooting itself.
Many Parisians read a good deal more into the dash than the matter of a few centimes more or less for gas. Frustration with the cost of gas first galvanized not the politicians and administrators charged with running Paris, but the consumers themselves. The municipal councilmen, though they might respond to the discontent of their constituents, had reason to be satisfied with the PGC's profitability. The city was finally benefiting from those sizable returns. The councilmen could regard the annual share they took from the corn-pany, which went as high as fifteen million francs, as a hidden tax on enterprises and even as a progressive levy on wealthy households.
The rhetoric that swirled around the gas issue never represented the city's profits in those terms, but proponents of alternate lighting technologies were quick to suspect that the municipal council protected the gas industry from new competitors for the sake of the revenues, if not for darker reasons.
The profile of gas customers ensured that the protesters would be shopkeepers, especially dry-goods merchants, grocers, restaurateurs, and publicans, organized by twenty-seven corporate associations. Their protest revealed much frustration. They knew that rates were half as high in London.
The PGC's argument that the British example was misleading carried little weight, for in Bordeaux had signed a forty-year agreement that put the price of gas at twenty-two centimes per cubic meter for private use and five centimes for public lighting. One widely read journal asserted that gas cost only three centimes to produce and distribute. In Brussels gas cost twenty centimes and fell to ten centimes in A city lighting engineer noted that "one is so thoroughly accustomed to thinking that gas costs the company nothing" that the figure he calculated, fourteen centimes, startled him.
Aggravating the sense of being cheated were the merchants' problems of economic dislocations. Under prosperous conditions protest might not have emerged because retailers would have passed the cost on to their customers. The lamentations about high overhead signaled commercial difficulties of the same sort that produced recriminations against department stores. Philip Nord has argued that Haussmann's urban renewal project bifurcated the Parisian commercial community into a declining sector in the old, central city and a prospering district along the boulevards.
The timing of organized protest, which arose in , derived from the business slowdown following the Universal Exposition the year before. The recession exposed the weakened position of the merchants in the old downtown. It is also possible that the approach of the first municipal election under a secure republican regime, in , encouraged mobilization.
The multiple sources of tension ensured that rallies in favor of lower gas rates would be large. The police estimated the size of a gathering in September at two hundred; in February , three hundred; in March, twelve hundred; and in April, five hundred. Such was the passion generated by the "gas question" that during the municipal election of only the explosive issue of secular education received more attention.
The question of gas prices engaged voters because it had an ideological dimension as well as a practical one. The militants frankly recognized the PGC as an Imperial institution in a republican era, in this most republican of cities. The firm's absurdly generous charter had been imposed on the people by a narrow, self-interested elite, they contended. The protestors of the s were continuing the anti-Imperial, antimonopolist discourse that had appeared just before the Franco-Prussian War and had contributed to the diffusion of republicanism among small businessmen.
On the election of Cochin wrote, "Lay education and cheap gas, those were the rallying cries. PGC, along with the railroads, the water company, and the coach company, all stood as corrupt examples of "financial feudalism. Revoking the concession and turning the service into a municipal agency appealed to some Radicals. Parisians' predisposition to distrust large concentrations of capital were reinforced in this instance by palpable evidence that a monopoly was indeed violating the public interest.
Municipal politicians attempted to respond to the frustrations of their constituents, but the ideological and emotional overtones complicated the practical matter of lowering rates. The councilmen had two options. They could negotiate with the PGC and, by offering new advantages, principally a longer concession, bring the firm to accept reduced prices.
This solution presupposed the fundamental legitimacy of the charter. The alternative was to compel the firm to reduce rates without offering it any compensation on the grounds that thirty centimes was an illegitimate price. Negotiation was the surer route to lower rates but entailed the politically unpopular act of giving the PGC further privileges.
Most aldermen ultimately found that option unacceptable. The public agitation for lower prices had brought some councilmen to commence bargaining with the PGC. Above all else, the firm coveted a charter that would prolong the life of the company beyond and was willing to lower prices in exchange. Negotiators quickly assembled an agreement for the approval of the municipal council even before that body faced the election of The project called for a reduction of rates by five centimes in exchange for a forty-year lengthening of the PGC's charter.
Moreover, the city would have to guarantee profits at the current lofty level. The council, however, dared not bestow so many new benefits on the firm with an election approaching, and the verdict of the balloting. L'Empire industriel , p. The same clamor for reform applied to railroads. See Doukas, French Railroad and the State , pp. The PGC approached the negotiations secure in its right to receive thirty centimes. A legitimate contract, revised several times since , had guaranteed that rate. If production costs had fallen dramatically since the firm's founding, that was only because management was doing its job; the decline did not create a consumers' right to lower prices.
Spokesmen for the firm argued that comparisons with London were utterly inappropriate because British firms had no limit on their longevity and thus no amortization costs. The PGC tried to shift blame for the high rates to the city. Paris received a two-centime duty on each cubic meter sold and shared profits. If the council wished to lower gas prices, it had only to renounce the city's revenues. Management saw obtaining nothing less than a franc-for-franc compensation for reducing rates as its sacred duty to shareholders.
Preferably it would take the form of a longer charter, which would reduce amortization costs. The company might also require municipal subsidies for the capital expenditures that lower rates could necessitate. The officers of the PGC claimed not to comprehend the rage of their customers and were scornful of the agitation. They perceived no grounds for compromise. However desirable a settlement on the company's terms might be, the officers recognized that there would be further opportunities if talks failed at the moment. A minority of aldermen, mostly on the right, shared the view that the PGC had a legitimate claim to thirty centimes and would have to be offered attractive compensations for lower rates.
Their position received powerful reinforcement from the prefect and from the chief municipal engineer in charge of the thoroughfares, Adolphe Alphand. These administrators were not touched by the ideological side of the issue. They argued for "realism" and contested the aggressiveness of Radical aldermen. Such concessions were not forthcoming. The PGC bargained with confidence in its position. For two years representatives of the city and the PGC searched for a settlement.
The company insisted on a monopoly that would last until It asked for guaranteed profits at the high levels of the early s and wanted to raise the amount of profits exempted from sharing with the city by more than a million francs. In exchange, the firm would reduce rates to twenty-five centimes, either at once or in stages. Additional small reductions would be possible as profits rose. The rate for workshops with gas motors could fall to twenty centimes. These terms were unacceptable to the majority of the municipal council.
In the prefect warned the PGC that a forty-year elongation of the charter was out of the question; the council might accept twenty-seven years, at most. At one point the prefect could offer only fifteen years. The problem was that aldermen did not see the company making sacrifices, and they did not believe the city should reward the PGC for its selfish comportment. The majority of aldermen was interested in recovering the rights of Parisians—in their eyes illegitimately bargained away by a corrupt Imperial administration. They hoped to force the PGC to lower its rates, for they felt under pressure from constituents to confront, not reward, the company.
The aldermen believed that a five-centime reduction, for which the PGC demanded so much in return, was far too small to satisfy the electorate. The public was counting on a reduction of at least ten centimes. Moreover, Radicals were loath to lengthen the charter. Paralleling the dilemma of national politicians in their dealings with the railroads, Parisian Radicals regarded such concessions as a dangerous alienation of public sovereignty. Yet they did not seek to expand the power of the State, so they could not firmly call for municipalization of the utility either.
The Radicals' position was an uneasy compromise that recognized the practicality of a limited charter but left open the possibility for another solution sometime in the future. Pressure to prolong the charter of an Imperial institution like the PGC upset the delicate balance among conflicting values the Radicals held regarding large-scale enterprise and state power. One feature of the negotiations with the PGC that deeply displeased Radicals was exposing the contradictions in their position. The long recession into which the Parisian economy had slipped by the end of made the climate of opinion still less hospitable for a negotiated settlement.
Retailers in the declining city center felt the weight of gas. One aspect of the economic hardship was a weakening of the world market for Parisian luxury products as machine production and sweated operations came into their own. Councilman Level argued that the PGC had imposed a great burden on the working-class family. Because gas motors were too costly, wives could not work at home; husbands and children were not well cared for. Level promised that gas at twenty centimes would permit domestic workshops to flourish and "prepare a profound transformation in women's working conditions.
Yet it does underscore the ideological, even messianic, dimensions the debate over gas rates could assume. The economic difficulties of the s raised the stakes entailed in reduced rates while making negotiations more difficult. Radical councilmen came to the strategy of compelling the PGC to reduce rates without compensation through application of article 48 of the charter.
The article gave Paris the right to impose the new methods on the PGC and benefit from whatever economic advantages might result. In principle, the minister of the interior was supposed to have convened a board of outside experts every five years to consider technological progress. No such body had been summoned before the controversy arose in The protesting consumer groups clamored for a commission. They hoped it would apply article 48 to the lower production costs the PGC had achieved since and rule that reduced rates were in order. The minister finally convened a commission of gas experts in , but it only protected the PGC.
In the first place, the commission defined its assignment precisely as the company wished—examining changes in production, not since , but rather since the last agreement with the city, in Second, the experts interpreted article 48 in a literal sense. They sought to determine whether an entirely new process for making gas had developed. They explicitly dismissed mere improvements in older methods as part of their purview. The commission also denied that progress in. Thus the vast profits from coke and organic chemicals, which protestors viewed as having reduced production costs to a negligible level, were to be ignored.
Having defined progress out of existence, their conclusion was inevitable. Article 48 offered no ground for reducing gas rates. Public opinion and most aldermen never accepted the validity of the commission's report. Indeed, they took it as one more sign of the corrupting influence of the PGC. It seemed self-evident that thirty centimes was an outrageous charge and that the charter must offer some source of redress if it were a valid document. The municipal council established its own expert body, which of course found that lower prices were fully justified.
Aldermen adopted the report of the second commission in April and voted to use the courts to attain its recommendation. Consumer groups loudly applauded the decision. The prefect managed to postpone the legal battle and continued bargaining with the PGC, but an attractive proposal did not emerge.
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By the economic crisis emboldened politicians. In February councilmen proposed to repurchase the gas monopoly and municipalize the service, but this was mainly a symbolic act and a sign of frustration. The council once again called on the prefect to confront the PGC, and in late March he gave heed to the political pressure, perhaps because he wished to soften the firm's negotiating stance. The prefect decreed an immediate reduction in gas prices to twenty-five centimes.
The decree was fraught with ambiguity and had a questionable legal status, but the company feared the difficulties it would stir. The prefect issued the order but hesitated to promulgate it, so it was not yet enforceable. One councilman declared that even he did not know whether he owed the company twenty-five or thirty centimes. Nonetheless, the minister of the interior refused the PGC's request to revoke it, and customers began to take matters into their own hands. More than fifteen hundred of them reduced their own bills on the basis of the decree. Paris, By late customers had withheld more than 1.
In the end the company asked customers to pay thirty centimes and offered to create an escrow account in case the courts found the prefect's decree valid. In the meantime the company prepared to contest the matter before the Council of State. Management had reason to look hopefully to the Council of State, for it had ruled in favor of the PGC on other matters. Only if the council wished to take republican revenge on an Imperial institution would it penalize the firm.
The predisposition was unlikely. Councillors of state had far more in common with the managers in terms of background, schooling, and outlook than with Radical aldermen. In addition, the council's jurisprudence favored broadly defined property rights over public daims. Inevitably it decided that the PGC was protected from the arbitrary decree of the Parisian administration by a legitimate charter.
There were no grounds for applying article 48 under the circumstances. Management was delighted with the ruling and voted the defense lawyer a bonus of fifteen thousand francs. For its part, the municipal council had no alternative but to disappoint its constituents on gas rates. Fortunately for the aldermen, the use of gas was not yet a mass phenomenon, and the matter was not a daily concern for most voters.
There was no political will to reopen negotiations with the PGC and seek reductions by granting a longer charter. The majority of aldermen appeared certain that their electors wanted that compromise no more than they wished to pay thirty centimes. Even the continuation and intensification of the recession did not change such preferences. Retailers dropped the PGC as the immediate target of anger and focused more fully on department stores.
Thus the PGC traversed the contentious s unscathed. Its privileges now seemed unassailable. Article 48, which had worried the company enough that it had tried unsuccessfully to remove it from the charter of , was no longer a threat. Management could feel confident that other opportunities for a prolonged charter would arise. The municipal council could not help but be aware that it would have to make concessions if it wished to benefit consumers. Volume 28 Issue 4 Dec , pp. Volume 27 Issue 4 Dec , pp.
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