Dangerous and Dishonest Men: The International Bankers of Louis XIV’s France

Rowlands, Guy

doi:10.1057/9781137381798

Cited by 8 publications

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“…7 As such they were part of what is called by Guy Rowlands the French "fisco-financial" system. 8 Furthermore, some 11 percent of the company's capital came from a specific group of financiers, who had been ordered to pay fines in 1661 by an exceptional judicial institution, the Chamber of Justice. 9 Through the Chamber of Justice, the king forced these convicted individuals to invest part of their fines in the West India Company.…”

Section: Formal and Informal Bankruptciesmentioning

confidence: 99%

Investing in French Overseas Companies: A Bad Deal? The Liquidation Processes of Companies Operating on the West Coast of Africa and in India (1664–1719)

Heijmans¹

2019

Itinerario

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Although French chartered companies operating on the west coast of Africa and in India followed a similar model of organization, their liquidation processes differed depending of the area of their monopoly. As well as exploring the reasons for the distinction between these two regions of exclusive trade, this article demonstrates that the differing liquidation processes negatively impacted company shareholders in the two regions. Taking the perspective of shareholders farther, it explores the case of a specific investor and the informal economic profits he benefitted from. This approach contributes to deepening our understanding of the French early modern companies’ bankruptcies by examining informal aspects that would not be readily visible from an exclusively institutional point of view.

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Section: Formal and Informal Bankruptciesmentioning

confidence: 99%

Investing in French Overseas Companies: A Bad Deal? The Liquidation Processes of Companies Operating on the West Coast of Africa and in India (1664–1719)

Heijmans¹

2019

Itinerario

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“…The new credit facility had its limits, though, because the financiers could not operate with paper money only. In particular, every three months they needed to gather large amounts of cash to settle their accounts with their correspondents and creditors at the Lyon fairs (Sayous 1938; Lüthy 1959; Lévy 1969; Rowlands 2012, 2014). In need of specie, financiers and bankers had to sell bills for coins.…”

Section: IVmentioning

confidence: 99%

“…Funding these two long international conflicts put formidable pressures on the resources of all the belligerents. The supply of troops deployed in foreign territories and support to allies generated monetary problems which have been impressively discussed by Jones (1988) and Graham (2015) in the case of England, Brandon (2015) for the Netherlands and by Rowlands (2012, 2014) for France. Despite Rowlands’ superb effort to identify the shortcomings of French monetary policy, in particular its impact on the external value of the French currency and the capacity to sustain the war effort, yet more work on money and credit in the age of Louis XIV is needed to catch up with the substantial and expanding body of literature on the English fiscal and monetary experience in the age of the Financial Revolution.…”

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confidence: 99%

“…Debasements impacted directly on the domestic economy via the foreign exchange, which added to the disturbances caused by war. The co-existence of gold and silver coins of different nominal values but with identical metallic content offered opportunities for fraud (Lüthy 1959; Lévy 1969; Rowlands 2014). The pros and cons of French monetary policy generated intense debates throughout Louis XIV's reign and during the regency, especially after John Law's manipulations of the currencies in support of his famous System (1719–20).…”

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‘The most difficult financial matter that has ever presented itself’: paper money and the financing of warfare under Louis XIV

Félix

2018

Financial History Review

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Based on an extensive survey of French primary sources and a discussion of the recent literature on fiscal policy in France and Europe during Louis XIV's wars, this article revisits the rationale behind the first experiment with paper money undertaken by finance minister Michel Chamillart, comparing it to other belligerents’ strategies, in particular England's, to adjust their monetary regime to the challenges of funding long wars of attrition. The article shows how concerns about economic activity, coinage and the need to finance the war deficit led to a series of debasements of the French currency, the establishment of a bank in the form of aCaisse des empruntsand the introduction of mint bills, which became legal tender and caused the first experience of fiat money inflation in history. Whereas Chamillart's personal shortcomings have been recently suggested as the cause of Louis XIV's humbling in the War of the Spanish Succession, I argue on the contrary that the introduction of paper money in 1704 was key to the capacity of France to sustain its military effort, but that a succession of military defeats against a more powerful coalition led to inflation. I also argue that the introduction of paper money saved theCaisse des empruntsand its bonds which helped sustain the war effort up until the peace. By situating the use of paper money within the broader question of the exercise of power in the absolute monarchy, this article examines the formation of fiscal policy, paying attention to the ways in which government sought advice from experts. It concludes by calling for further studies on policy- and decision-making under Louis XIV.

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“…The events preceding the French Revolution are well known. Having developed large commercial networks for their trade in luxury goods, Genevan merchants profited from the War of the Spanish Succession to become the exclusive bankers of the Sun King's armies (Rowlands 2014). Throughout the eighteenth century, the city-state established itself as the biggest foreign creditor to the French monarchy, thus accumulating fabulous fortunes at the expense of the Bourbons’ finances.…”

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confidence: 99%

The origins of Swiss wealth management? Genevan private banking, 1800–1840

Ugolini

2018

Financial History Review

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Geneva is host to the most ancient and venerable private banks of Switzerland, but not much is known about the circumstances in which the city allegedly developed an early competitive advantage in wealth management. Using an extraordinary qualitative source (Jacques Mirabaud's papers, and especially his memoirs), this article outlines the microstructure of Genevan private banking at the time of its emergence in the early nineteenth century. It finds that in those years, wealth managers’ ‘raw material’ did not consist of foreign capital, but of a remarkably abundant stock of domestic capital. Financial and social factors were intertwined in producing a very hierarchical division of labour in the origination and distribution of international sovereign loans.

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Dangerous and Dishonest Men: The International Bankers of Louis XIV’s France

Cited by 8 publications

References 0 publications

Investing in French Overseas Companies: A Bad Deal? The Liquidation Processes of Companies Operating on the West Coast of Africa and in India (1664–1719)

Investing in French Overseas Companies: A Bad Deal? The Liquidation Processes of Companies Operating on the West Coast of Africa and in India (1664–1719)

‘The most difficult financial matter that has ever presented itself’: paper money and the financing of warfare under Louis XIV

The origins of Swiss wealth management? Genevan private banking, 1800–1840

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