Necker, Jacques

Necker, Jacques (1732-1804) : French-Swiss, Statesman, Economist and Suzanne Curchod (1739-1794) Swiss, Writer.

Jacques Necker was a Genevan-born banker who became director general of finance under Louis XVI. He was a self-made financier, who amassed a private fortune mainly by speculating on the price of grain and through loans made to the royal treasury. Consequently, he acquired early in his career the reputation of a financial genius. Due to his direct involvement in the events leading up to the French Revolution and to his strong opposition to the physiocratic doctrines held by many influential politicians of his time, he is considered one of the most important figures in pre-revolutionary France.

As a student, Necker was precocious and had a predilection for literature. After completing his studies, he was sent to Paris to work as a clerk for the bank of Isaac Vernet. Upon Vernet’s retirement in 1756, he co-founded the bank of Thélusson and Necker. In 1764, Necker married Suzanne Curchod, the daughter of a Calvinist minister from the Swiss canton of Vaud. It was a happy marriage, and they had one daughter, Staël, Germaine de, the future Madame de Staël. In 1766, Suzanne Necker founded a literary salon in the tradition of the ancien régime, and it soon became one of the most important of its time, remaining in existence until the eve of the revolution. Beaumarchais, Pierre Augustin Caron de, Buffon, George-Louis Leclerc, Comte de, Marmontel, Jean-François, Morellet, Raynal, Guillaume Tomas François, Saint-Lambert and Suard were among those who attended her literary gatherings. The subject of much controversy, the salon was thought by some observers to be no more than a means of advancing the career of an ambitious husband with political aspirations. As her biographers point out, however, Suzanne Necker had received an unusual education for a young woman of that time and had also been an active participant in the literary and philosophical societies of Lausanne. The salon was perhaps established as a way of adhering to the principle of self-instruction (based on reading, writing and conversation) that she had followed since her youth. In 1778, Madame Necker founded the charity hospital in Paris that still bears her name and she was directly involved in its management. This was an unusual accomplishment for the wife of a government minister during the ancien régime. Although she had been a public figure throughout her life, her Réflexions sur le divorce were only published posthumously in 1774. Later, two separate collections of her writings compiled by her husband, Mélanges extraits des manuscrits de Mme Necker (1798) and Nouveaux mélanges extraits des manuscrits de Mme Necker (1801), appeared in print.

At the end of the Seven Years’ War in 1763, Jacques Necker became involved, as a stockholder, in the affairs of the Company of the Indies, which was attempting to rebuild itself after the devastation caused by wartime operations. During a decade which provided a sound basis for his later career as director of finance, he presented recommendations and proposals to the stockholders’ meetings and served on special commissions charged with investigating company operations. In his recommendations, Necker emphasized the need for the company not only to maintain its exclusive trade privileges in the East, but also to aim for commercial autonomy by freeing itself from government administration. The success of Necker’s plans for reform was short-lived and the company did not engage in commercial activities after 1770. It is through his involvement with the company, nonetheless, that Necker became known to the public and in 1768, he was appointed minister to the Court of Versailles by the Genevan government. In 1772, Necker retired from active direction of his bank in order to pursue a career in the government. Shortly afterwards, he published two works that placed him directly in the public eye. The first of these, Éloge de Colbert (1773), is a study of the ideal minister of finance. Necker proposes as the archetype of such a figure Louis XIV’s controller general, who had favored a mercantilist approach in his economic policies. The second work, Essai sur la législation et le commerce des grains (1775), is a treatise attacking the physiocratic views on the free trade of grain held by the minister of finance Turgot, Anne Robert Jacques and by the économistes. Stressing the value of practical experience rather that theory, Necker underlines the need to maintain limited government intervention in the economic sphere in order to protect consumers from grain speculators.

In 1776, Jacques Necker was appointed counselor of finance and director of the royal treasury by Louis XVI and in 1777 he was promoted director general of finance. This came at a time when France was preparing to enter the American War and the government was facing a serious financial crisis. Convinced that the tax burden on the people had reached its peak, Necker secured a number of significant loans for the government, thereby avoiding increasing taxation. This decision was severely criticized by Necker’s detractors who deemed it largely responsible for the government’s bankruptcy in the years to come. Although Necker’s primary task was to raise money to finance the war, he also reorganized the financial administration by means of moderate but nevertheless bold reforms. He believed that the direction of national finances was a public matter, and therefore, for the first time in French history, published an account of annual revenues and expenditures in his famous Compte rendu (1781). In an attempt to gain public trust, he claims in this work to have brought the budget deficit under control, but in reality the French debt had drastically increased. The disclosure of the names of royal pensioners and of the payments made to them contributed to Necker’s dismissal in 1781.

In August 1788, he was recalled to serve as minister of state to cope with the desperate financial circumstances that ultimately forced the king to convoke the Estates General. Necker was in favor of doubling the voting power of the Third Estate (representing peasants, working people of the cities and the middle classes) in the proposed restructuring of the Estates General. Recognizing that the revolution was inevitable, Necker envisaged a constitutional monarchy in which a bicameral parliament would exercise complete legislative powers and the royal government would be given full executive power. He believed, too, that there should be a bill of rights guaranteeing basic liberties to all citizens and that it was imperative to establish a responsible financial administration. According to Necker, these measures would provide the context for peaceful reform. His dismissal on July 11, 1789 fuelled the discontentment that led to the July upraising in Paris, ending in the fall of the Bastille. The king was thus forced to recall him for a third time. Necker engaged in new money borrowing and also proposed a general tax to be paid by all. The National Assembly no longer supported him and he was forced to resign in 1790.

Necker has often been portrayed in historical studies as an able administrator but a somewhat inept political leader. In terms of his economic thought, he has been traditionally classified as a reactionary mercantilist who was very publicly opposed to Turgot and the physiocrats. Furthermore, biographers have sometimes painted him as a dishonest businessman and an ambitious politician seeking only power and popularity. Recent scholarship has shown that this unflattering portrait of the reform statesman is unsupported by evidence. Necker seems rather to have been the victim of a powerful libel campaign begun by his political enemies around 1780. He is now seen as a politician genuinely concerned with the welfare of the working classes and a partisan of moderate but efficient reforms in the financial administration. He has emerged as a pragmatic thinker whose economic views place him halfway between mercantilism and liberalism, and as a supporter an English-style constitutional monarchy. His religious beliefs as well as his political, social and economic principles were clearly exposed in numerous works published during his lifetime. An edition of his complete works in fifteen volumes, edited by his grandson, appeared from 1820 to 1821.

Necker, Jacques

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