Jacques Necker

Swiss financier and politician

• Born: September 30, 1732
• Birthplace: Geneva, Switzerland
• Died: April 9, 1804
• Place of death: Coppet, Switzerland

Necker was the best-known and perhaps most successful financier, financial writer, and reform minister during the reign of King Louis XVI—at a time when all three fields were in their pioneer stage. Controversies about his abilities and policies have continued to the present, and he is a major figure in the continuing debates over mercantilism and Physiocracy.

Early Life

The early life of Jacques Necker (zhahk nay-kehr) was short and sweet—short in the telling and sweet to him. His father, Karl Friedrich Necker, born in Kostrzyn, Pomerania, in 1686, was serious and hardworking, as probably were generations of north German Neckers, many of them Lutheran pastors. Of considerable intellect, Jacques’s father was trained in law, gained political appointments, published on international law, and was elected professor of public law in 1726 at the Genevan Academy, where he flourished in a serious and respectful environment. He became a Genevan citizen and married Jeanne-Marie Gautier of a prominent Genevan family. Their first son, Louis, later known as Louis of Germany for the estate he purchased, was serious and bright.

Jacques was a precocious student. He completed his secondary curriculum when he was fourteen, and although he wished to pursue literature, he followed his father’s wishes and went to work in the banking firm of Isaac Vernet, brother of a colleague of Jacques’s father. Jacques pleased his employer and in 1750 was transferred to the Paris branch. There he served a long apprenticeship. Vernet retired in 1756, and a new company, Thelluson and Necker, was formed. Apparently, George-Tobie de Thelluson, the son of a Genevan banker, supplied most of the capital, and Necker supplied most of the hard work and banking skills. The apprenticeship continued; modest profits and valuable experience were gained in making government loans during the Seven Years’ War (1756-1763).

Life’s Work

Necker turned thirty-one in 1763, began dating (then called courting), and began establishing his fortune. He made money in speculation in grain, Canadian notes, and the Company of the Indies, as many did, although few retained their fortunes. Famines, the loss of Canada in the Treaty of Paris (1763), and the reorganization of war debts made these three areas lucrative. Critics tried to prove shady dealings on Necker’s part, but at worst it could be said that he exploited the practices and standards of the times. His activities left him with the lifelong conviction that “business enterprise should be left to businessmen,” a belief contrary to the dictates of mercantilism, to which Necker was believed to adhere, because he opposed the allegedly Physiocratic (laissez-faire) reform minister Anne-Robert-Jacques Turgot.

In 1763, Necker began to court Germaine de Vermenoux, a well-to-do widow; her sister was married to Necker’s partner, Thelluson. Probably concerned about their different social statuses, Germaine resisted Necker’s attention. Escaping to a health spa near Geneva with her young son, she met Suzanne Curchold, a governess of unusual wit and charm, and took her back to Paris in 1764 as companion-governess. Suzanne and Necker fell in love and married at the end of the year. Germaine forgave her former suitor and her employee, and remained a friend of the Neckers until her death in 1785. Necker acknowledged the great help he had received from “the companion of his life.” Suzanne rapidly became a fashionable hostess in Paris; her “Fridays,” by 1768, were well frequented by lumières (bright, famous, and promising persons). The unfriendly accused her of entertaining (and living) only to advance her husband’s career; the generous, including Voltaire, Denis Diderot, and Jean-Jacques Rousseau, found her to be a genuine lumière.

Necker retired from Thelluson and Necker in 1772. He then devoted most of his time to writing and to his political appointments and showed little interest in increasing his personal fortune. He had enough to live comfortably all of his life. Necker won the prize of the French Academy in 1773 for his Éloge de Jean-Baptiste Colbert (eulogy of Colbert). In 1775, Necker published an essay on legislation and the grain trade, which attacked Finance Minister Turgot’s free-trade policy and fixed the view of Necker as a mercantilist and anti-Physiocrat and therefore antiphilosophe. Actually, Necker was more of a pragmatist than a theorist, as is fitting to a finance minister, which is what he was to become. He was first placed in complete control of France’s finances when he was named director of the Royal Treasury in 1776. The following year, he was made finance minister.

Necker faced enormous difficulties in his first administration. Turgot had commenced reform, but the main result had been to awaken the opposition of the special interests and to establish the inconsistency of the king. Five months of inattention increased the disorder, and Necker had to struggle to meet current obligations. He managed enough loans to finance participation in the American Revolution and institute reforms to lessen the cost of those long-term obligations. Special interest groups mounted a pamphlet offensive against him; his appeals to the king for support were ignored. He issued his famous Compte rendu au roi (1781; State of the Finances of France, 1781) and resigned amid consternation in the financial community.

Finances worsened. Even conservative ministers such as Charles-Alexandre de Calonne and Étienne-Charles de Loménie de Brienne were forced to recommend reforms. Facing the refusal of the Assembly of Notables to endorse reforms and the Law Court of Paris to enregister reform edicts, and lacking the resolve to call out troops, Louis XVI, in August, 1788, recalled Necker to head finances, quibbling over his title, and announced a meeting of the Estates-General for May, 1789. The market value of government securities surged.

Contrary to public belief, Necker was not in command; in fact, the king, the ministers, and the court paid little attention to him. The Estates-General nearly ignored him when it met on May 5. Leaders of the clergy and leaders of the nobility were intent on the protection of their privileges; leaders of the Third Estate (Commons) were equally intent on changing the composition of the Estates-General and on clarifying the constitution, or on writing one (they disagreed on whether there was one), so few deputies were able to concentrate on Necker’s three-hour presentation. While he received some praise and support, mostly he was blamed for not being able to communicate. The king expected Necker to control the Commons, but neither king nor Commons listened to Necker. At court, Necker’s party, looking toward a British type of constitution, pressed Louis to meet major demands, and the queen’s party pressed the king to bring in troops to disperse the legislature. The queen won. Necker was dismissed and left Paris on July 11. By July 13, Paris was not only “in a fury but roaring drunk.” On July 14, the Bastille fell, and on July 15 a letter of reappointment was sent to Necker at Basel.

Necker’s concern in his third ministry was to restore to the public mind the moral authority of the king. The national assembly did not respond to his numerous financial reports and recommendations, and was not moved by his eloquence. He concluded that the deputies wanted to enjoy all the power and prestige as representatives of the nation but none of the responsibility for government. The greatest problem was the disposal of the property that had been confiscated from the Church during the revolution. The national assembly issued assignats, or interest-bearing bonds; Necker urged that nothing be spent until land was sold, lest speculation, inflation, and depreciation of the assignats mushroom. Again, the assembly did not listen. Necker resigned in September, 1790.

Necker’s retirement is usually forgotten, but it is instructive. He lived at Coppet for fourteen years. He cared for his ailing wife and, after her death, arranged and published her writings in five volumes. He published a study of the executive power in large states in 1792 and a three-volume history of the revolution in 1796. A fifteen-volume edition of his works assembled by his grandson was published in 1820-1821.

Significance

A patient, line-by-line analysis of Jacques Necker’s personal and professional financial dealings substantiates the claim that Necker was the most experienced and knowledgeable financier of the late eighteenth century. One of the reasons he has not had more acclaim is that so few then (or later) understood finances well enough to judge. Many, such as the comte de Mirabeau, believed Necker to be “full of wind.” His presentation on the opening day of the Estates-General was long and frustratingly detailed, and the reaction to his speech was not positive. He did, however, advise the assembly well when he concluded, “You will not be envious of what time can achieve and will leave something for it to do. For if you attempt to reform everything that seems imperfect, your work itself will be so.”

Necker offered advice to many friends. He urged the émigrés to make peace with the revolution. He deplored the absence of executive power of the king and recoiled in horror at the evidence of violence against persons and property. He likened himself to the sixteenth century chancellor of Queen Regent Catherine de Médicis, Michel de l’Hospital, who had tried to mediate between Catholics and Protestants; forty years of violence followed.

Bibliography

Bosher, J. F. French Finances 1770-1795: From Business to Bureaucracy. New York: Cambridge University Press, 1970. Convincingly contradicts the older view that bankruptcy was a terminal illness of the Old Regime and that the royal administration was beyond reform. Includes a helpful table of French terms, five organization charts, five tables of expenses and revenues, a list of treasurers, treasurers general, and receivers general, and a bibliography.

Doyle, William. Origins of the French Revolution. New York: Oxford University Press, 1980. Part 1 describes writings on revolutionary origins since 1939, with page 39 clearly contrasting the old and new judgments of Necker. Part 2 is a thirteen-chapter topical study of the breakdown of the Old Regime and a good supplement to Jean Egret’s narrative.

Egret, Jean. The French Prerevolution, 1787-1788. Translated by Wesley D. Camp. Introduction by J. F. Bosher. Chicago: University of Chicago Press, 1977. The best study of the period. This work reaps the financial effects of the reaction to Necker’s first ministry and sets the stage for his second.

Gershoy, Leo. The French Revolution and Napoleon. New York: F. S. Crofts, 1933. The best-organized and most clearly written of the many older surveys. Presents the older view of Necker in chapter 4, “The Reform Movement During the Old Regime,” and chapter 5, “The Destruction of the Old Regime.”

Harris, Robert D. Necker: Reform Statesman of the Ancien Régime. Berkeley: University of California Press, 1979. The first four chapters describe Necker’s early life and professional career up to his first appointment as finance minister. Contains a bibliography and a list of terms.

‗‗‗‗‗‗‗. Necker and the Revolution of 1789. Lanham, Md.: University Press of America, 1986. A continuation of Harris’s study of Necker’s political career. Analyzes royal administration in the 1780’s, finance ministries between Necker’s first and second terms, and Necker’s second and third terms. Contains a complete twenty-page bibliography.

Herold, J. Christopher. Mistress to an Age: A Life of Madame de Staël. Indianapolis, Ind.: Bobbs-Merrill, 1958. As close to a biography of Necker as is available in English. Part 1, “The Neckers,” is most germane to Necker, but he is an important figure throughout the book because Madame de Staël, Necker’s daughter, was unusually devoted to her father and unusually influenced by him.

Hibbert, Christopher. The Days of the French Revolution. New York: Viking Penguin, 1989. Originally published in 1980 under the title The French Revolution, Hibbert’s book provides detailed descriptions of events from 1789 until the rise of Napoleon. The book includes information on Necker. Well written and understandable to readers with little or no knowledge of the period.

Schama, Simon. Citizens: A Chronicle of the French Revolution. New York: Knopf, 1989. Schama’s history of the period includes information on Necker. Schama argues the revolution did not create a “patriotic culture of citizenship,” but was preceded by a more vital, inventive culture.