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Jacques Necker
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==Finance Minister of France== [[File:Necker, Jacques, par Boillet, BNF Gallica.jpg|thumb| ]] On 29 June 1777, according to his daughter in her "Vie privée de Mr Necker" he was made director-general of the royal treasury and not [[Controller-General of Finance]] which was impossible because of his Protestant faith.<ref name="Privatleben">{{Cite book |last=Necker |first=Jacques |url=https://books.google.com/books?id=hig6AAAAcAAJ |title=Neckers Charakter und Privatleben |publisher=Stiller |year=1806 |location=Leipzig |language=German}}</ref>{{rp|32}}{{sfn|Schama|1989|p=94}} Necker refused a salary, but he was not admitted to the [[Conseil du Roi|Royal Council]]. He gained popularity through regulating the government's finances by attempting to divide the ''[[taille]]'' and the [[Tax per head|capitation tax]] more equally, abolishing a tax known as the ''vingtième d'industrie'', (a [[value-added tax]]) and establishing ''[[Mount of piety|monts de piété]]'' (pawnshop-like establishments for loaning money on security). Necker tried through careful reforms (abolition of pensions, [[mortmain]], [[droit de suite]] and more [[Equity (economics)|fair taxation]]) to rehabilitate the disorganized state budget. He abolished over five hundred [[sinecures]] and superfluous posts.{{sfn|Durant|Durant|1967|pp=866–867}} Together with his wife, he visited and improved life in hospitals and prisons. In April 1778 he remitted 2.4 million livres from his own fortune to the royal treasury.{{sfn|d'Haussonville|2004|pp=154–155}}<ref name="Sur l'administration">''Sur l'administration de M. Necker'', p. 365</ref> <!--By organizing pawnshops, the poor were able to borrow money at low interest.--> Unlike Turgot – in his ''Mémoire sur les municipalités'' – Necker tried to install [[States Provincial (France)|provincial assemblies]] and hoped they could serve as an effective means of reforming the [[Ancien régime]]. Necker succeeded only in [[Berry, France|Berry]] and [[Guyenne|Haute-Guyenne]], where he installed assemblies with an equal number of members from the [[Estates of the Realm#Third Estate|Third Estate]]. His greatest financial measures were his use of loans to help fund the French debt and his use of high [[interest rate]]s rather than raising taxes.{{sfn|Swanson|Trout|1990|p=424}} The collection of [[indirect taxes]] was restored to the [[Ferme générale|farmers-general]] (1780), but Necker reduced their number by a third and subjected them to sharper scrutiny and control.{{sfn|Durant|Durant|1967|pp=866–867}} In September 1780, Necker asked for his dismissal, but the King refused to let him go.<ref name="Bredin">{{Cite journal |last=Bredin |first=Jean-Denis |title=Necker, La France et la Gloire |url=https://gallica.bnf.fr/ark:/12148/bpt6k9766891m/f1n300.pdf?download=1 |format=PDF |journal=Cahiers Staëlians |language=French |volume=55 |pages=15 |via=BNF}}</ref> ===Compte rendu au roi (Report to the King)=== [[File:Lombards Library 010.jpg|thumb| ]] [[File:Jean-Michel Moreau, Le festin royal, 1782, NGA 2791.jpg|thumb|[[Jean-Michel Moreau]], Le festin royal, 1782, NGA 2791]] By 1781, France was suffering financially, and, as director-general of the royal treasury, he was blamed for the rather high debt accrued from the [[American Revolution]].<ref name="Taylor">Taylor, George. Review of ''Jacques Necker: Reform Statesman of the Ancien Regime,'' by Robert D. Harris. ''Journal of Economic History'' 40, no. 4 (1980): 877–879. {{doi|10.1017/s0022050700100518}}</ref> A series of pamphlets appeared, criticizing Necker.<ref name="Duprat">{{Cite journal |last=Duprat |first=Annie |date=July 2010 |title=Léonard Burnand, Les pamphlets contre Necker. Médias et imaginaire politique au xviiie siècle |url=https://journals.openedition.org/ahrf/11742 |journal=Annales historiques de la Révolution française |language=French |volume=361 |issue=361 |pages=206–208 |doi=10.4000/ahrf.11742 |via=OpenEdition}}</ref> Jacques-Mathieu Augeard attacked him on his foreign origin, his faith, and economic choices.<ref name="Duprat" /> The main reason behind this was the action of Necker "cooking the books" or falsifying the records.{{sfn|Aftalion|1990|pp=24–25}}<ref name="Taylor"/> He brightened the picture by excluding military outlays and other 'extraordinary' charges ([[Menus-Plaisirs du Roi]]) and ignoring the national debt.{{sfn|Durant|Durant|1967|p=870}}{{sfn|Schama|1989|pp=92–93}} Both Necker and Calonne were deceived with the number of pensions and gratifications.<ref name="Page">{{Cite book |last=Page |first=Francis |url=https://books.google.com/books?id=TshDAAAAYAAJ |title=Secret History of the French Revolution, From the Convocation of the Notables in 1787 to the First of November, 1796 |publisher=T.N. Longman |year=1797 |volume=1 |location=London |pages=271–273}}</ref> The king spent much more on his brothers than on public health. After Necker had shown Louis XVI his annual report, the king tried to keep its contents secret. Necker met the challenge aggressively by asking the King to bring him into the royal council. In revenge, Necker made the ''[[Compte rendu|Compte rendu au roi]]'' public; in no time between 200,000 copies were sold.<ref name="Brewster"/> It was rapidly translated into Dutch, German, Danish, Italian and English. In his most influential work, which brought him instant fame, Necker summarized governmental income and expenditures to provide the first record of royal finances ever made public. The Account was meant to be an educational piece for the people, and in it, he expressed his desire to create a well-informed, interested populace.{{sfn|Schama|1989|p=95}} Before, the people had never considered governmental income and expenditure to be their concern, but the ''Compte rendu'' made them more proactive. Maurepas became jealous, and [[Charles Gravier, comte de Vergennes|Vergennes]] called him a revolutionist. Necker declared that he would resign unless given the full title and authority of a minister, with a seat on the [[Conseil du Roi]]. Both Maurepas and Vergennes replied that they would resign if this was done.{{sfn|Schama|1989|p=93}} When Necker was dismissed on 19 May 1781, people of all stations flocked to his home at St. Ouen. In August 1781 Madame Necker went as far as [[Utrecht]] to buy the [[libels]] that appeared in the name of Turgot against her husband. She even tried to have the booksellers arrested.<ref name="Utrecht">{{Cite book |last=van Utrecht |first=Jan |url=https://books.google.com/books?id=t1NaAAAAcAAJ |title=Tweede briev van Jan van Utrecht, over het voorgevallene met twee boekverkopers, tot beter verstand van het so genaamd Echt relaas |publisher=H. Keyzer, F.H. Demter, D. Schuurman |year=1781 |pages=54 |language=Dutch}}</ref><ref name="Duprat" /><ref name="Venturi">{{Cite book |last=Venturi |first=Franco |url=https://books.google.com/books?id=vScABAAAQBAJ |title=The End of the Old Regime in Europe, 1776–1789 |date=2014 |publisher=Princeton University Press |volume=1 |location=Princeton, N.J. |pages=348|isbn=978-1-4008-6190-3 }}</ref> <!--Did Necker and his brother receive annually 8 million livres as a pension?{{sfn|d'Haussonville|2004|p=204}} (This figure is not very reliable, as it would mean they received as much as the king spent on his brothers? The French Marxist historian [[Albert Soboul]] gives more details.{{cn|date=November 2018}})--> After his dismissal, Necker bought an estate in [[Coppet]]. His brother Louis purchased an estate in [[Cologny]]. Both estates were located near [[Lake Geneva]]. In retirement, Necker, believing in "credible policy", occupied himself with law and economics, producing his famous ''Traité de l'administration des finances de la France'' (1784). Calonne tried to prevent the distribution of the book in Paris.<ref name="Zeitgenossen2">[https://books.google.com/books?id=F1wDAAAAYAAJ&dq=Jacques+Necker+Saint+Ouen+sur+Seine&pg=RA4-PA3 Zeitgenossen: Biograhien und Charakteristiken, Ausgaben 1–4, p. 6]</ref> Never had a work on such a serious subject obtained such general success; 80,000 copies were sold.{{sfn|de Staël|1818}} <!--Because of difference in the ''[[gabelle]]'' salt was smuggled all over the country. Necker reported that a minot of salt, which was 49 kilograms (107.8 pounds) cost only 31 sous in Brittany, but 81 in Poitou, 591 in Anjou, and 611 in Berry.<ref name="Kurlansky">{{cite book |last= Kurlansky |first= Mark |date= 2002 |title= Salt |publisher= Penguin Group |page= 231 |isbn=0-8027-1373-4}}</ref> Each year about 3,000 citizens (men, women, and children) were being imprisoned, sent to the galleys, or put to death for crimes against the gabelle. All the while, religious persons, nobility, and high-ranking officials were often exempt from the gabelle or paid much lower taxes. --> === Second term as Controller-General === The Necker family returned to the Paris region, supposing they were present at the wedding of their only daughter [[Germaine de Staël|Germaine]] in January 1786. The impending [[national bankruptcy]] of France caused [[Charles Alexandre de Calonne|Calonne]] to convene an [[Assembly of notables]] under the elimination of [[parlement]]s in order to enforce tax reforms. It had not met since 1626. One could not issue new loans without the Parlements' approval.{{sfn|Aftalion|1990|p=25}} In his speech, Calonne expressed doubts about Necker's statistics in the ''Compte rendu''. According to him, they were false and misleading,<ref name="Felix">{{Cite book |last=Félix |first=Joël |title=The Crisis of the Absolute Monarchy: France from Old Regime to Revolution |date=2013 |publisher=Oxford University Press |editor-last=Swann |editor-first=Julian |pages=107–126 |chapter=The Problem with Necker's Compte Rendu au roi (1781) |doi=10.5871/bacad/9780197265383.003.0006 |isbn=978-0-19-726538-3 |editor-last2=Félix |editor-first2=Joël |via=Oxford Academic}}</ref><ref name="Soll">{{Cite journal |last=Soll |first=Jacob |date=2016 |title=From Virtue to Surplus: Jacques Necker's Compte Rendu (1781) and the Origins of Modern Political Discourse |url=https://www.academia.edu/25163810 |journal=Representations |volume=134 |pages=29–63 |doi=10.1525/rep.2016.134.1.29 |via=Academia.edu}}]</ref><!--Necker wanted to show France in a strong financial position when the reality was much worse. He hid the crippling interest payments that France had to make on its massive 520 million livres in loans (largely used to finance the war in America) as a normal expenditure. When he was criticized by his successor [[Calonne]] for the ''Compte rendu'', he made public his "Financial Summary for the King", which appeared to show that France had fought the war in America, paid no new taxes, and still had a massive credit of 10 million livres of revenue.{{clarification needed}}--> as the state revenues had been revised upwards. For Calonne, the French deficit was caused by Necker, who had not raised the taxes. However, Calonne got involved in several financial scandals regarding the "Calonne Company" and was dismissed by the king on 8 April 1787.<ref name="FEIC">[https://docviewer.yandex.com/view/586742941/?*=1RTs2RhBWOX%2F7%2FNv0Sc64lyATH97InVybCI6InlhLWJyb3dzZXI6Ly80RFQxdVhFUFJySlJYbFVGb2V3cnVCQlFMX1JYbDVtNV81Y1NlWFBMbnFGZ1dkazkyallNQkRWZkZIRUtPRjlvX0lfVGRRTzRsdHU2LU5ocWFBYXF2c2xiaXZ2RUMxbTB5RGdaWGVZOWpERFcwekFuTTF3SnlQMmZDVzBBdnNsUy1oNHdnazJkMGRMZkthT09ONVA0QVE9PT9zaWduPS0yU0hMSm5IRFBWdmRENWlfMks4X2NCUkdzbTRfQTMzUGQxVFh0U1hkdnc9IiwidGl0bGUiOiJjb21wYWduaWVfZGVzX2luZGVzLmRvYyIsInVpZCI6IjU4Njc0Mjk0MSIsInl1IjoiODc2MjI0NDA2MTUzNjkyMjc5NyIsIm5vaWZyYW1lIjpmYWxzZSwidHMiOjE1NDQyOTg1MTE3MTN9&page=4 The French East India Company]{{dead link|date=April 2024}}</ref> On 11 April, Necker replied on the charges made by Calonne. Two days later Louis XVI banished Necker by a ''[[lettre de cachet]]'' for his very public exchange of pamphlets.<ref name="Hardman1">{{Cite book |last=Hardman |first=John |url=https://books.google.com/books?id=r7EODAAAQBAJ |title=The Life of Louis XVI |date=2016 |publisher=Yale University Press |isbn=978-0300221657 |location=New Haven}}</ref>{{pn|date=April 2024}}<ref name="Fairweather">{{Cite book |last=Fairweather |first=Maria |url=https://books.google.com/books?id=7TCeBAAAQBAJ |title=Madame de Staël |date=2013 |publisher=Little, Brown |isbn=978-1472113306}}</ref>{{pn|date=April 2024}} After two months, Necker was allowed to return to Paris. Necker published his ''Nouveaux éclaircissement sur le compte rendu''. Also [[Louis Philippe II, Duke of Orléans]] and his secretary Charles-Louis Ducrest came up with proposals.<ref name="Ducrest">{{Cite web|url=https://data.bnf.fr/fr/12531285/charles-louis_ducrest/|title=Charles-Louis Ducrest (1747–1824)}}</ref> The next minister of finance [[Loménie de Brienne]] resigned within fifteen months. On 24 August 1788; the king allowed him an enormous pension. <!--Significant deficits through increased spending on the magnificent court in Versailles and costly, foreign policy failures let the debt grow from 67% to 100%.{{citation needed|date=November 2018}} By August the state needed 240 million livres and France was effectively bankrupt.<ref name="McPhee">{{Cite book |last=McPhee |first=Peter |title=Liberty or Death: The French Revolution |publisher=Yale University Press |year=2006 |isbn=9780300189933 |location=New Haven |pages=46}}</ref>-->On 25 or 26 August, Necker was called back to office accompanied by fireworks. According to John Hardman, Marie-Antoinette helped to organise Necker's return to power. This time he insisted on the title of [[Controller-General of Finances]] and access to the [[Conseil du Roi|royal council]].{{sfn|Durant|Durant|1967|p=948}}<ref name="Fairweather" /><ref name="Britannica">{{Cite web |last=Goodwin |first=Albert |date=2024-04-05 |title=Jacques Necker |url=https://www.britannica.com/biography/Jacques-Necker |website=Encyclopedia Britannica}}</ref> Necker was appointed as [[Chief minister of France]]. <!--The revolution began here, according to J. Hardman--> He revoked the order of 16 August requiring bondholders to accept paper instead of money; government bonds rose 30% on the market.{{sfn|Durant|Durant|1967|p=949}} On 7 September 1788, Paris was looking at famine, and Necker suspended the exportation of corn, purchased seventy million livres of wheat, and publicly reposted the decree of the King's Council of 23 April 1789 allowing police to inspect granaries and private inventories of grain, but none of these efforts could solve the problem.<ref name="Kropotkin2">{{cite book | title=The Great French Revolution, 1789–1793 | chapter=Chapter 10 | author=Peter Kropotkin | year=1909 | translator=N. F. Dryhurst | quote=The distress in the city, however, increased from day to day. It is true that Necker had taken measures to avert the dangers of a famine. On September 7, 1788, he had suspended the exportation of corn, and he was protecting the importation by bounties; seventy million livres were expended in the purchase of foreign wheat. At the same time he gave widespread publicity to the decree of the King's Council of April 23, 1789, which empowered judges and officers of the police to visit private granaries to make an inventory of the grain, and in case of necessity to send the grain to market. But the carrying out of these orders was confided to the old authorities and-no more need be said! | publisher=New York: Vanguard Printings | url=http://www.revoltlib.com/?id=222}}</ref> In 1788, insurrections broke out in Brittany, and Necker was sacked again. In a letter to [[Florimond Claude, Comte de Mercy-Argenteau]], Marie-Antoinette took personal credit for forcing the king's hand on this matter. She believed that Necker would lessen the King's authority and wrote "the moment is pressing. It is very essential that Necker should accept."<ref name="Kropotkin3">{{cite book | title=The Great French Revolution, 1789–1793 | chapter=Chapter 5 | author=Peter Kropotkin | year=1909 | translator=N. F. Dryhurst | quote=At Paris, after the dismissal of the Archbishop of Sens, there were numerous demonstrations. The Pont Neuf was guarded by troops, and several conflicts occurred between them and the people, of whom the leaders were, as Bertrand de Moleville remarks, 'those who later on took part in all the popular movements of the Revolution.' Marie-Antoinette's letter to the Count de Mercy should also be read in this connection. It is dated August 24, 1788, and in it she tells him of her fears, and announces the retirement of the Archbishop of Sens and the steps she had taken to recall Necker; the effect produced on the Court by those riotous crowds can therefore be understood. The Queen foresaw that this recall of Necker would lessen the King's authority; she feared "that they may be compelled to nominate a prime minister," but "the moment is pressing. It is very essential that Necker should accept." Source: J. Feuillet de Conches, Lettres de Louis XVI, Marie-Antoinette et Madame Elisabeth (Paris, 1864), vol. i. pp. 214–216. | publisher=New York: Vanguard Printings | url=http://www.revoltlib.com/?id=217}}</ref> ===Impact of the American Revolution=== One of the most significant fiscal issues Necker faced was the [[American Revolutionary War]] and the resulting debt. The war was popular with almost every Frenchman, except Necker.{{sfn|Durant|Durant|1967|p=870}} For the first time, the king waged a war without raising the taxes.{{sfn|Aftalion|1990|p=23}} As France had financed its participation almost exclusively by [[municipal bonds]], Necker warned of the consequences for the French national budget as the war continued. (The war had cost the state already ca. 1.5 billion livres.) The [[Alexandre Marie Léonor de Saint-Mauris de Montbarrey|ministers of War]] and [[Antoine de Sartine|Navy]] were especially hostile towards him.{{sfn|Aftalion|1990|p=24}} In 1781, Congress appointed [[Robert Morris (financier)|Robert Morris]] as [[Superintendent of Finance of the United States| Superintendent of Finance]] after the US went bankrupt. In 1783, Morris cut off interest payments to France, its largest foreign creditor. This led Necker to seek funds from elsewhere. [[Nicolaas van Staphorst]] told Necker that the entire French debt might be redeemed without any loss through the Amsterdam capital markets. The Van Staphorsts made an offer for the American bonds. Necker warmed to the proposal but asked for [[collateral (finance)|collateral]] and the sanction of a large investment bank. Necker decided that without collateral or the sanction of a major investment bank, the proposal was not acceptable.<ref name="Veru" /> [[Thomas Jefferson]], who had succeeded Franklin as American minister to France and [[John Adams]] as head of American finance in Europe in 1785, learned about the meeting between the [[Nicolaas van Staphorst|Van Staphorsts']] representatives and the French Minister of Finance only in November 1786, when he received a redacted document describing the Dutch offer from [[Étienne Clavière]], a Genevan banker and pro-America.<ref name="Veru">{{Cite journal |last=Veru |first=Peter Theodore |date=2021-07-15 |title=The French bonds: the little-known bidding war for France's holdings in American debt, 1786–1790 |journal=Financial History Review |volume=28 |issue=2 |pages=259–280 |doi=10.1017/S096856502100010X |via=Cambridge University Press}}</ref> The Dutch bankers advanced the treasury sufficient funds to forestall a crisis over the next year. The winter of 1788–89 was one of the bitterest in history. By the summer of 1789, the population suffered from famine. Necker intervened personally and successfully at the Amsterdam bank [[Hope & Co.]] to supply the 'King of France' with grain.<ref name="Buist">{{Cite book |last=Buist |first=Marten Gerbertus |url=https://books.google.com/books?id=zbIjCQAAQBAJ |title=At Spes non Fracta: Hope & Co. 1770–1815 |date=2012 |publisher=Springer |isbn=9789401188586 |pages=46}}</ref>{{sfn|d'Haussonville|2004|p=156}} He used the 2.4 million livres in the royal treasury as a collateral.<ref name="Privatleben"/>{{rp|83}}
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