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Jacques Necker
Jacques Necker (French: [ʒak nɛkɛʁ]; 30 September 1732 – 9 April 1804) was a Genevan banker and statesman who served as finance minister for Louis XVI. He was a reformer, but his innovations sometimes caused great discontent. Necker was a constitutional monarchist, a political economist, and a moralist, who wrote a severe critique of the new principle of equality before the law.
Necker initially held the finance post between July 1777 and 1781. In 1781, he earned widespread recognition for his unprecedented decision to publish the Compte rendu – thus making the country's budget public – "a novelty in an absolute monarchy where the state of finances had always been kept a secret." Necker was dismissed within a few months. By 1788, the inexorable compounding of interest on the national debt brought France to a fiscal crisis. Necker was recalled to royal service. His dismissal on 11 July 1789 was a factor in causing the Storming of the Bastille. Within two days, Necker was recalled by the king and the assembly. Necker entered France in triumph and tried to accelerate the tax reform process. Faced with the opposition of the Constituent Assembly, he resigned in September 1790 to a reaction of general indifference.
Necker was born on 30 September 1732 in Geneva to Karl Friedrich Necker and Jeanne-Marie Gautier. His father was a lawyer from Küstrin in Neumark, Prussia (now Kostrzyn nad Odrą, Poland). After publishing some works, Karl Friedrich was appointed professor of public law at the Academy of Geneva in 1725, and later served in the city's Council of Two Hundred. After studying at the Academy of Geneva, Necker moved to Paris in 1748 and became a clerk in the bank of Isaac Vernet and Peter Thellusson. Soon after, he managed to learn Dutch and English. One day, he replaced the first clerk in charge of trading on the stock exchange, and through a sequence of trades, he made a quick profit of half a million French livres. In 1762, Vernet retired and Necker became a partner in the bank with Georges-Tobie de Thellusson (1728–1776) (Isaac de Thellusson's son) who managed the bank in London, while Necker served as his managing partner in Paris. In 1763, before the end of the Seven Years' War, he successfully speculated in British debentures or bonds, wheat, and possibly some shares, which he sold at a good profit in the next few years.
Necker had fallen in love with Madame Anne Germaine de Vermenoux, the young widow of a French officer. When she went to see Théodore Tronchin in Geneva, she met the well-educated Suzanne Curchod. In 1764, Madame de Verménoux brought Mademoiselle Curchod with her from Geneva to Paris as a companion for Thelusson's children. Suzanne was engaged to British historian Edward Gibbon, but he was forced to break the engagement in 1762. Necker transferred his love from the wealthy widow to the ambitious Swiss governess, gifted in writing; they married in 1764. In 1766, they moved to Rue de Cléry and had a daughter, Anne Louise Germaine, who grew to become the famed author and salonnière Madame de Staël.
Madame Necker encouraged her husband to try to find himself a public position. He, accordingly, became a syndic, or director, of the French East India Company, around which a fierce political debate revolved in the 1760s between the company's directors and shareholders and the royal ministry over its administration and the company's autonomy. After showing his financial ability in its management, Necker defended the company's autonomy in an able memoir against the attacks of Morellet in 1769. As the company never made any profit during its existence, the monopoly ended. The era of free trade had begun. Necker bought up the company's ships and stock of unsold goods when it went bankrupt in 1769.
From 1768 to 1776, he made loans to the French government in the form of life annuities and by lottery operations. His wife made him give up his share in the bank, which he transferred to his brother Louis Necker and Jean Girardot in 1772. In 1773, Necker won the prize of the Académie Française for a defense of state corporatism framed as a eulogy in honor of Louis XIV's minister Jean-Baptiste Colbert. Necker's capital amounted to six or eight million livres, and he used Château de Madrid as a summer house. In 1775, in Essai sur la législation et le commerce des grains, he attacked the physiocrats, like Ferdinando Galiani, and questioned the laissez-faire policies of Turgot, the Controller-General of Finances. Turgot had made too many enemies; in May 1776, he was dismissed. But his successor, Clugny de Nuis, died in October. Therefore, on 22 October 1776, on the recommendation of Maurepas, Necker was appointed "Directeur du trésor royal". (As a Protestant, Necker could not serve as Controller.)
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. Necker refused a salary, but he was not admitted to the Royal Council. He gained popularity through regulating the government's finances by attempting to divide the taille and the capitation tax more equally, abolishing a tax known as the vingtième d'industrie, (a value-added tax) and establishing 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 fair taxation) to rehabilitate the disorganized state budget. He abolished over five hundred sinecures and superfluous posts. 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. Unlike Turgot – in his Mémoire sur les municipalités – Necker tried to install provincial assemblies and hoped they could serve as an effective means of reforming the Ancien régime. Necker succeeded only in Berry and Haute-Guyenne, where he installed assemblies with an equal number of members from the Third Estate.
His greatest financial measures were his use of loans to help fund the French debt and his use of high interest rates rather than raising taxes. The collection of indirect taxes was restored to the farmers-general (1780), but Necker reduced their number by a third and subjected them to sharper scrutiny and control. In September 1780, Necker asked for his dismissal, but the King refused to let him go.
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Jacques Necker
Jacques Necker (French: [ʒak nɛkɛʁ]; 30 September 1732 – 9 April 1804) was a Genevan banker and statesman who served as finance minister for Louis XVI. He was a reformer, but his innovations sometimes caused great discontent. Necker was a constitutional monarchist, a political economist, and a moralist, who wrote a severe critique of the new principle of equality before the law.
Necker initially held the finance post between July 1777 and 1781. In 1781, he earned widespread recognition for his unprecedented decision to publish the Compte rendu – thus making the country's budget public – "a novelty in an absolute monarchy where the state of finances had always been kept a secret." Necker was dismissed within a few months. By 1788, the inexorable compounding of interest on the national debt brought France to a fiscal crisis. Necker was recalled to royal service. His dismissal on 11 July 1789 was a factor in causing the Storming of the Bastille. Within two days, Necker was recalled by the king and the assembly. Necker entered France in triumph and tried to accelerate the tax reform process. Faced with the opposition of the Constituent Assembly, he resigned in September 1790 to a reaction of general indifference.
Necker was born on 30 September 1732 in Geneva to Karl Friedrich Necker and Jeanne-Marie Gautier. His father was a lawyer from Küstrin in Neumark, Prussia (now Kostrzyn nad Odrą, Poland). After publishing some works, Karl Friedrich was appointed professor of public law at the Academy of Geneva in 1725, and later served in the city's Council of Two Hundred. After studying at the Academy of Geneva, Necker moved to Paris in 1748 and became a clerk in the bank of Isaac Vernet and Peter Thellusson. Soon after, he managed to learn Dutch and English. One day, he replaced the first clerk in charge of trading on the stock exchange, and through a sequence of trades, he made a quick profit of half a million French livres. In 1762, Vernet retired and Necker became a partner in the bank with Georges-Tobie de Thellusson (1728–1776) (Isaac de Thellusson's son) who managed the bank in London, while Necker served as his managing partner in Paris. In 1763, before the end of the Seven Years' War, he successfully speculated in British debentures or bonds, wheat, and possibly some shares, which he sold at a good profit in the next few years.
Necker had fallen in love with Madame Anne Germaine de Vermenoux, the young widow of a French officer. When she went to see Théodore Tronchin in Geneva, she met the well-educated Suzanne Curchod. In 1764, Madame de Verménoux brought Mademoiselle Curchod with her from Geneva to Paris as a companion for Thelusson's children. Suzanne was engaged to British historian Edward Gibbon, but he was forced to break the engagement in 1762. Necker transferred his love from the wealthy widow to the ambitious Swiss governess, gifted in writing; they married in 1764. In 1766, they moved to Rue de Cléry and had a daughter, Anne Louise Germaine, who grew to become the famed author and salonnière Madame de Staël.
Madame Necker encouraged her husband to try to find himself a public position. He, accordingly, became a syndic, or director, of the French East India Company, around which a fierce political debate revolved in the 1760s between the company's directors and shareholders and the royal ministry over its administration and the company's autonomy. After showing his financial ability in its management, Necker defended the company's autonomy in an able memoir against the attacks of Morellet in 1769. As the company never made any profit during its existence, the monopoly ended. The era of free trade had begun. Necker bought up the company's ships and stock of unsold goods when it went bankrupt in 1769.
From 1768 to 1776, he made loans to the French government in the form of life annuities and by lottery operations. His wife made him give up his share in the bank, which he transferred to his brother Louis Necker and Jean Girardot in 1772. In 1773, Necker won the prize of the Académie Française for a defense of state corporatism framed as a eulogy in honor of Louis XIV's minister Jean-Baptiste Colbert. Necker's capital amounted to six or eight million livres, and he used Château de Madrid as a summer house. In 1775, in Essai sur la législation et le commerce des grains, he attacked the physiocrats, like Ferdinando Galiani, and questioned the laissez-faire policies of Turgot, the Controller-General of Finances. Turgot had made too many enemies; in May 1776, he was dismissed. But his successor, Clugny de Nuis, died in October. Therefore, on 22 October 1776, on the recommendation of Maurepas, Necker was appointed "Directeur du trésor royal". (As a Protestant, Necker could not serve as Controller.)
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. Necker refused a salary, but he was not admitted to the Royal Council. He gained popularity through regulating the government's finances by attempting to divide the taille and the capitation tax more equally, abolishing a tax known as the vingtième d'industrie, (a value-added tax) and establishing 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 fair taxation) to rehabilitate the disorganized state budget. He abolished over five hundred sinecures and superfluous posts. 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. Unlike Turgot – in his Mémoire sur les municipalités – Necker tried to install provincial assemblies and hoped they could serve as an effective means of reforming the Ancien régime. Necker succeeded only in Berry and Haute-Guyenne, where he installed assemblies with an equal number of members from the Third Estate.
His greatest financial measures were his use of loans to help fund the French debt and his use of high interest rates rather than raising taxes. The collection of indirect taxes was restored to the farmers-general (1780), but Necker reduced their number by a third and subjected them to sharper scrutiny and control. In September 1780, Necker asked for his dismissal, but the King refused to let him go.
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