Jacques Necker

Jacques Necker was born in 1732 in Geneva which at the time was independent both of France and Switzerland.  He was sent to Paris in 1747 to become a clerk in a bank.  He rose within the institution to the position of partner and became very wealthy, wealthy enough to open his own bank.  He married Suzanne Curchod, they had a child Anne would become the famous author Madame Staël.  He increasingly rose to prominence by becoming a director of the French East India Company and making loans to the French government whilst at the same time criticising Turgot the Controller of the Finances.  

In 1776 he was given the title Director General of the Finances under Louis XVI being unable to assume the full title due to his being a Protestant.  He sought to ease the increasing financial problems France found itself in by using loans rather than raising taxes.  At the same time he pushed for more assistance to the American Revolutionaries.  During this time period he published a summary of the account of the government’s budgets.  Although the budget itself was largely falsified to suggest France was on a much firmer financial firmer footing than it was.  With France’s financial situation growing increasingly desperate and his popularity especially with Marie Antoinette terribly low he was forced to resign in 1783.  This did not solve France’s problems as the slide towards bankruptcy continued apace until the King forced by the dire economics and popular consensus recalled Necker in 1788.

When the Estates General were called in 1789 Necker addressed them.  It was not the most inspiring of speeches as he spent hours exploring the minutiae of financial details.  He appeared to have misread the Estates’ (notably the Third’s) desire for reform.  This second time as Director of Finance was a short lived one as he was dismissed having failed to attend Louis XVI’s speech to the Estates General on the 11th of July 1789.  The dismissal led to riots and disturbances in the city which may have led to the storming of the Bastille on the 14th.  The King rapidly reversed his decision and reappointed him on the 9th of July.

His third time as Director of Finance was not to be any more successful.  He refused to cooperate with the more moderate Revolutionaries in the shape of Mirabeau and Lafayette.  He urged the King to keep the veto over legislation and not to allow ministers to be drawn from the assembly.  This coupled with a series of ineffectual economic interventions meant that his third departure as minister was greeted with no anguish from the populace.

He retired to Coppet Coummugny near Geneva where he died on 9th April 1804.

Germaine De Staël on Necker the Finance Minister.  Taken from Considerations on the Principle events of the French Revolution, Germaine De Staël, Liberty Fund, Indianapolis (2008) p59

M. Necker was the first and only minister in France who succeeded in obtaining credit without the benefit of any institution.  His name inspired so much confidence that capitalists in various parts of Europe came forward, even to a degree of imprudence, with their funds, reckoning on him as on a government, and forgetting that he could lose his place at any moment.  It was customary in England, as in France, to quote him before the Revolution as the best financial head in Europe: and it was considered as a miracle, that war should have been carried on during five years without increasing the taxes, or using other means than providing for the interests of the loans by progressing retrenchments.

Comte de Segur on finance minister Necker publishing accounts of the government.  Memoirs of Louis Philippe Comte de Segur, The Folio Society, London (1960) p103

Monsieur Necker, who administered the finances with great skill, had adopted a measure which by some way was considered great and valuable, and by others hurtful and dangerous.  He caused the account of the state of the finances, as he had presented it to the King, to be printed and published.

This innovation, unexampled in France, produced a kind of revolution in the public mind.  Hitherto, the nation, a stranger to its own affairs, had remained completely ignorant as to the receipts and expenditure of the public revenue, the debts of the state, the extent of its needs, and the resources it possessed.  All this was for every Frenchman, and even for the better informed classes, the true arcanum imperii (mystery of government).

The appeal to public opinion was an appeal to liberty; and, as soon as the nation had satisfied its curiosity respecting these important objects which had always been kept concealed from their view, they began to discuss and to judge, to praise and to censure.  Their eyes being thus opened on this most essential point relating to their interests, it was not long before they thought or recollected that, in matters of accounts and taxation, they were not to be reduced to the sole duty of paying, and they had a right to examine, to grant, or to refuse the burdens imposed upon them.

Comte de Segur on finance minister Necker’s first dismissal from power in 1781.  Memoirs of Louis Philippe Comte de Segur, The Folio Society, London (1960) p105

Monsieur Necker had, by simple means, supplied the government with immense resources to bear the expenses of the war not only without the necessity of an increase of taxation, but with the advantage, on the contrary, of a diminution of its burden.  He had filled the public coffers by the sale of annuities, the interest on which was to be paid by sums arising from reforms and economy in the expenditure of the court.

This line of conduct showed great skill in the management of affairs, but argued little knowledge of mankind.  The minister was not aware of the number and power of all the people, great as well as subordinate, who were interested in the existence of abuses.  He learnt it only too soon, to his cost.  Private interests gained the victory over the public weal, the state was sacrificed to the court, economy to luxury, prudence to vanity.

The storm now broke out on all sides, and the enemies of Monsieur Necker took advantage of an error into which he had been betrayed by vanity.  Not satisfied with the title of Director General of the Finances, he wished to become a minister, to be able the better to defend his plans in the King’s council.

The devout appeared scandalised at seeing a Protestant hold the helm of state, and the great felt offended at the pretensions of a mere banker from Geneva.  All accused him of pride and ambition.  The confidence of the King was shaken by these clamours and, as his principal defect consisted in too much diffidence in his own judgement, he fancied he heard the expression of public opinion whilst he was listening to that of the greatest number of the courtiers who surrounded his throne.  He, therefore, yielded, in opposition to his own wishes, and Monsieur Necker was removed from the administration, by the same adversaries who had obtained from the King the sacrifice of Monsieur Turgot, and decided the retreat of Monsieur Malesherbes.  

Edmund Burke on Necker and the situation of French finances.  Taken from Reflections on the Revolution in France, Penguin Classics, London (2004) p234

Mr Necker’s book published in 1785, contains an accurate and interesting collection of facts relative to public economy and to political arithmetic; and his speculations on the subject are in general wise and liberal.  In that work he gives an idea of the state of France, very remote from the portrait of a country whose government was a perfect grievance, an absolute evil, admitting no cure but through the violent and uncertain remedy of a total revolution.  He affirms, that from the year 1726 to the year 1784, there was coined at the mint of France, in the species of gold and silver, to the amount of about one hundred millions of pound sterling.

The Marquis de Bouille on Louis XVI’s finance minister Necker and the calling of the Estates General.  Taken from Memoirs Relating to the French Revolution by the Marquis de Bouille, Cadell and Davies, London (1797) p70

Necker, with stricter morals, had the same political principles, and these had been strengthened by the experience he had acquired under his former administration. During that period, in the execution of his projects of financial reform, he had to encounter the opposition of the parliaments and privileged bodies, and was at last sacrificed to the cabals of the court. This then he judged a favourable moment to humble, and even annihilate the first orders of the state. He thought, no doubt, the middling class of the people, humiliated and jealous of the prerogatives enjoyed by these orders, could easily accomplish what the government dared not undertake.  With respect to the parliaments, all that was necessary to crush the power newly erected by them was, in the approaching assembly of the States General, to give a preponderating influence to the third estate, and to render these meetings periodical.  Becoming then only a popular assembly, the States General, he imagined, might be made the instruments of his ambition, and the supporters of his plan for the restoration of the finances.

Necker viewed France with the eyes of a citizen of Geneva; and Louis, already prepossessed, saw it through those of his minister; he readily adopted his fatal system, and the monarch placed himself at the head of a conspiracy against the monarchy, which he sacrificed in the hope of making his subjects more happy; for never prince loved his people better, as no one ever more fully experienced their ingratitude.

Barère on the failures of Louis XVI ministers.  Taken from Memoirs of Bertrand Barère Volume 1, H. S. Nichols, London (1896) p196

At this critical point when the State was passing out of the hands of a financial charlatan, like M. Necker, into those of a squanderer like M. de Calonne.

These ministers of a day had by turns destroyed the monarchy and led the way to the Revolution by the increase of taxation, the persecution of the parliaments, the confusion of the exchequer, and the depletion of the national treasury. Twice had the Notables been summoned merely to dissolve before coming to any agreement; they had refused to make the property of the nobility and clergy pay taxes. A deficit of fifty-five millions was the only point that was settled, and by seeing the terrible confusion of the finances of every government of this period, it is easy to understand how a deficit of fifty-five millions could mount up, since several hundred millions have since been spent on unjust wars and useless conquests.

Germaine De Staël on Necker’s second removal from power.  Taken from Considerations on the Principle events of the French Revolution, Germaine De Staël, Liberty Fund, Indianapolis (2008) p161

Two days after his departure, and as soon as his removal from office was known, the theatres were shut as for a public calamity.  All Paris took up arms; the first cockade worn was green, because that was the colour of M. Necker’s livery: medals were struck with his effigy; and had he thought proper to repair to Paris instead of quitting France by the nearest frontier, that of Flanders, it would be difficult to assign a limit to the influence that he might have acquired.