Abstract
The French Revolution began a period of radical political, social and economic experimentation. Twice during the Revolution, when advocates of laissez-faire economic policies were in power, free banking flourished. While free banking in Scotland and the United States has been intensively studied, these experiements are not ideal for judging its merits. The French experience thus provides additional useful evidence on the viability of banking where there is free entry and the issuance of liabilities is unregulated.
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Notes
See Herbert Lüthy (1961) La Banque Protestante en France de la Révocation de l’Edit de Nantes à la Révolution (Paris: SEVPEN).
Jean Bouvier (1970) ‘Vers le Capitalisme Bancaire: Expansion du Crédit après Law’, in Ernest Labrousse, et al, (eds) Histoire économique et social de la France (Paris: Presses Universitaires de France), Vol. II, pp. 267–321.
Robert Bigo (1927) La Caisse d’Escompte (1776–1793) et les Origines de la Banque de France (Paris: Presses Universitaires de France), pp.40–3.
The Arrêt du Conseil can be found in Gustave Schelle (1923) Ouevres de Turgot (Paris: Librairie Félix Alcan), Vol. V, pp. 354–7.
Jean Lafaurie (1981) Les Assignats (Paris: Le Leopard d’Or), p. 79.
Charles Goodhart (1988) The Evolution of Central Banking (Cambridge, Mass.: MIT Press), p.4.
See Eugene N. White (1989) ‘Was There a Solution to the Financial Dilemma of the Ancien Régime?’, Journal of Economic History, Vol.49, No.3 (September).
Jacques Necker (1820) Ouevres complètes (Paris), Vol. 3, pp. 49–51.
Laffon de Ladebat (1793) Compte Rendu des Opérations de la Caisse d’Escompte (Paris), Table VII.
Ernest Labrousse (1976) ‘Les “bons prix” agricoles du XVIIe siècle’, in Ernest Labrousse, Histoire Economique et Social de la France (Paris: Presses Universitaires de France, Vol. II, pp. 386–7.
Robert D. Harris (1979) Necker, Reform Statesman of the Ancien Régime (Berkeley: University of California), p. 203; and Bigo, op. cit., pp. 66–7.
Jacques Necker (1820) ‘De l’Administration des Finances’, Ouevres Complètes, Vol. 5, pp. 525–30.
Jacques Godechot (1968) Les Institutions de la France sous la Révolution et l’Empire (Paris: Presses Universitaires de France), pp. 175–8.
Jacques Necker (1820) ‘Projet d’une Banque Nationale’, Oeuvres Complètes (Paris), Vol. 7, pp. 149–97.
Jean Bouchary (1941) Les compagnies financières à Paris du XVIIIe siècle (Paris), Vol. 2, pp. 11–14.
Saint-Aubin (1795) Des banques particulières (Paris).
Alphonse Charles Courtois fils (1881) Histoire des Banques en France (Paris: Librairie Guillaumin), pp. 109; and
André Liesse (1909) Evolution of Credit and Banks in France (Washington DC: Government Printing Office), pp. 11–12. After the hyperinflation, the unit of account changed from livres to francs.
In its first incarnation, the Banque due France was much like its rivals. Discounts were limited to 90-day three-signature paper, with 5000 francs of credit available per share and a maximum of 15,000 francs for non-shareholders. Maurice Lévy-Leboyer (1976) ‘Le crédit et la monnaie: l’évolution institutionelle’, in Ernest Labrousse, Histoire Economique et Sociale de la France (Paris: Presses Universitaires de France), Vol. 3, pp. 352–3.
Guy Thuillier (1983) La monnaie en France au début du XIXe siècle (Geneva: Librarie Droz), p.214.
Jean Bouchary (1943) Les Manieurs d’Argent à Paris à la fin du XVIIIe siècle (Paris: Marcel Rivière), Vol. III, pp. 233–8.
In spite of the Revolution, the Protestant bankers still played a prominent role, and five of the bankers were Swiss-born. Romuald Szramkiewicz (1974) Les Régents et Censeurs de la Banque de France nommés sous le Consulate et l’Empire (Genève: Librairie Droz), pp.XLIII–XLVII.
Pierre Samuel du Pont de Nemours (1806) Sur la Banque de France (Paris).
Sidney G. Checkland (1975) Scottish Banking. A History 1695–1973 (Glasgow: Collins), pp. 104–6, 118–21.
Adam Smith (1937 [1776]) The Wealth of Nations (New York: Modern Library), p. 307.
See the New York model statute in Hugh Rockoff (1975) The Free Banking Era: A Re-Examination (New York: Arno Press), pp. 70–9.
Arthur J. Rolnick and Warren E. Weber (1984) ‘The Causes of Free Bank Failures: A Detailed Examination’, Journal of Monetary Economics, 14, pp. 267–91.
Jean-Baptiste Say (1803) Traité d’économie politique (Paris), Vol. II, pp. 40–1.
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© 1991 Forrest Capie and Geoffrey E. Wood
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White, E.N. (1991). Experiments with Free Banking during the French Revolution. In: Capie, F., Wood, G.E. (eds) Unregulated Banking. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-11398-9_4
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DOI: https://doi.org/10.1007/978-1-349-11398-9_4
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