|Chief Minister of the French Monarch|
16 July 1789 – 3 September 1790
|Preceded by||Baron of Breteuil|
|Succeeded by||Count of Montmorin|
25 August 1788 – 11 July 1789
|Preceded by||Archbishop de Brienne|
|Succeeded by||Baron of Breteuil|
|Controller-General of Finances|
25 August 1788 – 22 July 1789
|Preceded by||Charles Alexandre de Calonne|
|Succeeded by||Charles Alexandre de Calonne|
|Director-General of the Royal Treasury|
29 June 1777 – 19 May 1781
|Preceded by||Louis Gabriel Taboureau des Réaux|
|Succeeded by||Jean-François Joly|
|Born||30 September 1732|
Geneva, Republic of Geneva
|Died||9 April 1804 (aged 71)|
Geneva, Léman (department), France
(m. 1764; died 1794)
Jacques Necker (IPA: [ʒak nɛkɛʁ]; 30 September 1732 – 9 April 1804) was a banker of Genevan origin who became a French statesman and finance minister for Louis XVI. Necker played a key role in French history before and during the first period of the French Revolution.
Necker held the finance post during the period 1777-1781 and "is remembered today for taking the unprecedented step in 1781 of making public the country’s budget, a novelty in an absolute monarchy where the state of finances had always been kept a secret." Necker was dismissed within a few months. In 1788 the inexorable compounding of interest brought France to a fiscal crisis. Necker was recalled to royal service. When he was dismissed on 11 July 1789 it caused the Storming of the Bastille. Within a week Necker was recalled by the king and entered the capital in triumph. He remained in office for another year trying to accelerate the tax reform process. Faced with the opposition of the Constituent Assembly, who changed the purpose of assignats into legal tender, he resigned in September 1790 in general indifference.
Necker, apparently a constitutional monarchist, was also a writer and a moralist. He wrote a severe criticism of the new principle of equality before the law. Necker fully embraced the label of moderate and the concept of the golden mean.
Necker was born in Geneva in a Calvinist surrounding. In 1747 Jacques became a clerk in the bank of Thellusson and Vernet. In 1750 he was sent to Paris to the Bank Girardot. Soon after he had managed to learn Dutch and English. One day, he replaced the first clerk in charge of negotiations in the stock exchange and during a major operation, he made a quick profit of half a million. In 1762, Vernet retired and Necker became a partner in the bank with Peter Thellusson who superintended the bank in London, while Necker was his managing partner in Paris. In 1763, before the end of the Seven Years' War, he successfully speculated in British debentures or bonds (possibly grain and/or Canadian shares?), which he sold with a good profit in the next few years. The young Necker was envied by his contemporaries for his fabulous wealth.
Necker had fallen in love with Madame de Verménou, the widow of a French officer. In 1764, Madame de Verménou brought Suzanne Curchod to Paris as a companion for Thelusson's children. Suzanne was suffering as her lover Edward Gibbon was forced to break the relation. Necker transferred his love from the wealthy widow to the Swiss governess. They married before the end of the year. In 1766, they had a daughter, Anne Louise Germaine Necker, who became a renowned author under the name of 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. "The ministry, concerned with the financial stability of the company, employed the Abbé Morellet to shift the debate from the rights of the shareholders to the advantages of commercial liberty over the company's privileged trading monopoly." 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. Necker bought the stockpile and the ships when the French East India Company went bankrupt in 1769. The shareholders were paid by organizing a lottery.
From 1768 till 1776 he was resident of the Republic of Geneva in Paris. 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. Meanwhile, he made loans to the French government in the form of life annuity. In 1775, he published his Essai sur la législation et le commerce des grains, in which he attacked the physiocrats and questioning the laissez-faire policies of Turgot. His wife now believed he could get into office as a great financier and made him give up his share in the bank, which he transferred to his brother Louis Necker, who also took over his post as resident. In May Turgot was succeeded by Clugny de Nuis, who died in October. On 22 October 1776 Necker was appointed as the "Directeur du trésor royal" on Maurepas’ recommendation.
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. He refused a salary and in April 1778 he remitted 2 million livres from his own fortune to the royal treasury. Necker was not admitted to the Royal Council, but gained popularity in 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 (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. The collection of indirect taxes was restored to the farmers-general (1780), but Necker reduced their number and subjected them to sharper scrutiny and control. Together with his wife, he visited and improved life in hospitals and prisons. By organizing pawnshops, the poor were able to lend money at low interest. Necker tried to install provincial assemblies and hoped they could serve as effective means of reforming the ancien regime. Necker succeeded only in Berry and Haute-Guyenne to install provincial assemblies with an equal amount of members from the Third Estate.
Necker won a substantial victory by inducing the King to free all remaining serfs on the royal domain, and to invite all feudal lords to do likewise. When they refused, Necker advised Louis to abolish all serfdom in France, with indemnities to the masters, but the King, imprisoned in his traditions, replied that property rights were too basic an institution to be annulled by a decree.
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. Necker, who had financed the participation in the War of independence almost exclusively by municipal bonds, warned of the consequences for the French national budget as the war continued. The war had cost the state already ca. one billion livres. In September 1780 Necker wanted to be dismissed, but the King refused to let him go.
In 1781, France was suffering financially, and as director of the royal treasury he was blamed for the rather high debt accrued from the American Revolution. The government had a deficit of six million livres? After Necker had shown the king his annual report the king tried to keep the content secret. Jacques-Mathieu Augeard trying to succeed Necker, was his main opponent, and attacked him on his foreign origin, his faith, and economic choices. A series of pamphlets appeared. The main reason behind this was the action of Necker "cooking the books" or falsifying the records.  In revenge, Necker made the Compte rendu au roi public and 200.000 copies were sold.
In his most influential work, which brought him instant fame, Necker summarized governmental income and expenditures to provide the first record of royal finances ever made public. As a specific example his compte rendu showed the king would spend more on his brothers than on public health. The Account was meant to be an educational piece for the people, and in it, he expressed his desire to create a well-informed, interested populace. Before, the people had never considered governmental income and expenditure to be their concern, but the Compte rendu made them more proactive. (This birth of public opinion and interest played an important role in the French Revolution.)
The classical interpretation of his statistics, given in the Compte rendu, is that they were false and misleading, but the state revenues were revised upwards and it was not allowed to publish military expenditures.
The compte rendu made Necker quite popular with the masses, but it had another effect he was not expecting. Publicizing the royal finances exposed and confirmed the excessive lifestyle of the crown. Many French citizens were fed up with this lavish living. Although it was not Necker’s intention, his compte rendu helped precipitate the fall of Louis XVI.
When Necker was dismissed on 19 May 1781 people pilgrimaged to his estate. Madame Necker went as far as Utrecht to buy the libels that appeared in the name of Turgot against her husband. She even tried to have arrested the booksellers. It seems he and his brother Louis received annually 8 million livres as a pension? Anyhow Jacques bought an estate in Coppet and Louis in Cologny in the surrounding of Geneva. In retirement, Necker, believing in "credible policy", occupied himself with law and economics, producing his famous Traité de l'administration des finances de la France (1784). Because of difference in the gabelle salt was smuggled all over the country. Necker reported that a minot of salt, which was 49 kilograms (107.8 pounds) cost only 31 sous in Brittany, but 81 in Poitou, 591 in Anjou, and 611 in Berry. Each year about 3000 citizens (men, women, and children) were being imprisoned, sent to the galleys, or put to death for crimes against the gabelle. All the while, religious persons, nobility, and high-ranking officials were often exempt from the gabelle or paid much lower taxes.
The family returned to the Paris region in 1785. The impending national bankruptcy of France caused Calonne to convene an Assembly of notables under the elimination of parlements in order to enforce tax reforms. It had not met since 1626. However, the assembly of notables decided otherwise and forced his dismissal. Calonne was dismissed by the king on 7 April 1787. Two days later the king banished Necker to 40 leagues from Paris by a lettre de cachet for his very public exchange of pamphlets and memoirs attacking his successor Calonne. The next minister of finance Loménie de Brienne resigned on 24 August 1788.
Significant deficits through increased spending on the magnificent court in Versailles and costly, foreign policy failures let the debt grow from 67% to 100%. By August the state needed 240 million livres and France was effectively bankrupt. On 25 August Necker was called back to office accompanied by fireworks and an impressive rise of the stock exchange. This time he insisted on the title of Controller-General of Finances. Necker was appointed as head of the governement. In the summer of 1789 when the population suffered from famine Necker intervened personally and successfully at the Amsterdam bank Hope & Co. to supply the 'King of France' with grain. The two million in the royal treasury he used as a deposit.
Necker succeeded in doubling the representation of the Third Estate to satisfy the nation, c.q. the people. His address at the Estates-General on 5 May 1789 about the fundamental problems as financial health, constitutional monarchy, and institutional and political reforms lasted three hours. Necker suffered from a cold and after fifteen minutes he asked a clerk to read the remainder. He invited the representatives to leave aside their factional interests and take into consideration the general, long-term interests of the nation. Personal rivalries and radical claims had to give way to a pragmatic spirit of moderation and conciliation. Necker's last sentence of the speech: "Finally, gentlemen, you will not be envious of what only time can achieve, and you will leave something for it to do. For if you attempt to reform everything that seems imperfect, your work will lead to poor results." According to Simon Schama he "appeared to consider the Estates-General to be a facility designed to help the administration rather than to reform government". Two weeks later Necker seems to have sought to persuade the king to adopt a constitution similar to that of England and advised him in the strongest possible terms to make the necessary concessions before it was too late. According to François Mignet "He hoped to reduce the number of the orders, and bring about the adoption of the English form of government, by uniting the clergy and nobility in one chamber, and the third estate in another." By this refusal he became the ally of the assembly, which determined to support him.
On 17 June 1789, the first act of the new National Assembly in revolutionary France declared all existing taxes illegal. Necker had legitimate reasons to be concerned about the implications of this unprecedented decision. On 23 June the king proposed to the royal council the dissolution of the Assembly. While at dinner on the 11th of July, Necker received a note from the king enjoining him to leave the country immediately. He finished dining very calmly, without communicating the purport of the order he had received, and then got into his carriage with Madame Necker, as if intending to drive to their estate in Saint-Ouen, but he took the road to Brussels. When the news became known the next day it enraged Camille Desmoulins. The threat of a counter-revolution, as well as bankrupt, provoked the armament of citizens and the storming of the Bastille on 14 July. The king recalled the immensely popular Necker on 16 July. Necker wrote his brother that he was going back to the abyss. His entry into Paris was a day of festivity and he demanded a general amnesty. He proved to be powerless as tax-income dropped quickly. The political scene came to be dominated by "clamorous spectators, passionate judges, and ungovernable agitators". In November 1789 ecclesiastical possessions were confiscated. Necker proposed the issue of assignats. He was partly backed by Comte de Mirabeau, his strongest opponent who called for "national money". "Consequently, a first decree was voted through on 21 December 1789, ordering the issue of 400 million assignats, certificates of indebtedness, with an interest rate of 5%, secured and repayable based on the auctioning of the biens nationaux (“national goods”: properties and assets recently seized from the Catholic Church)." Feudal rights were confiscated in March. In May 1790 the feudal and ecclesiastical properties were sold against assignats. Initially, the new money had a beneficial effect, but exchange rates dropped with 25% and the treasury stayed empty.
On 17 April 1790, the government, which was still short of cash, declared an emergency exchange rate for the assignat, and the interest was cut from 5% to 3% before being scrapped altogether. This is how it became genuine paper money. On top of that, the State was no longer destroying the assignats that it was getting back. Jacques Necker, Minister of Finance and fervent opponent of the paper money, disapproved of these decisions and handed in his resignation in September.
A first loan of thirty millions (1,200,000 livres), voted the 9th of August, had not succeeded; a subsequent loan of eighty millions (3,200,000 livres), voted the 27th of the same month, had been insufficient. Duties were reduced or abolished, and they yielded scarcely anything, owing to the difficulty of collecting them. It became useless to have recourse to public confidence, which refused its aid; and in September, Necker had proposed, as the only means, an extraordinary contribution of a fourth of the revenue, to be paid at once. Each citizen was to fix his proportion himself, making use of that simple form of oath, which well expressed these first days of honour and patriotism: "I declare with truth."
On 27 August 1790 the assignats became legal tender, c.q. banknotes, which could be acquired by anyone and used for ordinary business transactions. Necker was attacked by Jean-Paul Marat in his pamphlets, by Jacques-René Hébert in his newspaper and by Count Mirabeau in the Assembly, who accused him of complete financial dictatorship. Jacques Necker, resolutely against the transformation of the assignat into paper currency, handed in his resignation on 3 September. Necker's efforts to keep the financial situation afloat were ineffective and his intention to change the "Caisse d'Escompte" into a national bank project failed. His popularity vanished and he resigned with a damaged reputation.  Necker left leaving the two million livres in the public treasury.
Not without danger, Necker traveled north to Brussels in the Austrian Netherlands. Through Germany, he reached Switzerland and Coppet Castle. Here he occupied himself with law, history, and literature. At the end of 1792, he published a brochure on the trial against Louis XVI. Being put on the list of Émigrés in 1793 Necker was not paid any interest on the money he had left in the treasury. His house in Rue de la Chaussée-d'Antin, his estate in Saint-Ouen and the two million livres were confiscated by the French government? Late 1793 the Necker's moved to Beaulieu Castle, where his wife died. (Necker seems to have moved from Geneva to Lausanne because of the influence of the revolutionary committees?) He continued to live under the care of his daughter and his niece, Madame Necker de Saussure. But his time was past, and his books had except abroad no political influence. Early 1798 a momentary excitement was caused by French invasion of Switzerland when he burnt most of his political papers. In July 1798 Necker was removed from the list of Émigrés. His house in the 9th arrondissement of Paris was sold to (or occupied by?) the husband of Juliette Récamier. The publication of "Last Views on Politics and Finance" in 1802 upset the first consul Napoleon. Necker's claim on the two million was not recognized by the French Senate. After his death his daughter published "Vie privée de Mr. Necker". Necker was buried next to his wife in the garden of Coppet Castle; the mausoleum was sealed after Germaine had been buried there too.
His father, Karl Friedrich Necker, was a native of Küstrin in Neumark, Prussia (now Kostrzyn nad Odrą, Poland). After publishing some works on international law, Karl Friedrich was appointed in Geneva in 1724 as a professor in public law. After visiting London he started a boarding school for young Englishmen, assisted by his son Louis Necker, a mathematician and a banker, like as brother Jacques.
Necker's daughter Germaine married Erik Magnus Staël von Holstein; she was to become a prominent figure in her own right and a leading opponent of Napoleon Bonaparte. On 22 March 1814, she was promised 21 years of interest on her father's investment in the public treasury.
His nephew Jacques Necker (1757-1825), the son of Louis, married Albertine Necker de Saussure. It seems they took care of their uncle after his wife had died in 1794. Their son was the geologist and crystallographer Louis Albert Necker de Saussure.
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