Ouvrard’s experience helped loosen the purse-strings of other bankers

Monday, September 16th, 2024

Napoleon by Andrew RobertsWith renewed fighting against Austria and her allies looming, Andrew Roberts explains (in Napoleon: A Life), Napoleon needed to replenish the near-empty Treasury:

He instructed Gaudin to borrow at least 12 million francs from the fifteen or so richest bankers in Paris. The best they would offer was 3 million francs, helpfully suggesting that a national lottery be established to raise the rest. Unimpressed, on January 27, 1800 Napoleon simply arrested Gabriel Ouvrard, the most powerful banker in France and the owner of the vast navy supply contract from which he was rumoured to have made a profit of 8 million francs over the previous four years. (It cannot have helped Ouvrard that he had refused to help finance the Brumaire coup.) Ouvrard’s experience helped loosen the purse-strings of other bankers, but Napoleon wanted to place France’s finances on a far surer footing. He could not continue, in effect, to need bankers’ and contractors’ permission before he could mobilize the army.

On February 13, Gaudin opened the doors of the Banque de France, with the First Consul as its first shareholder.

[…]

In April 1803 the bank was granted the exclusive right to issue paper money in Paris for fifteen years, notes which in 1808 became French legal tender, supported by the state rather than just the bank’s collateral. In time the confidence that Napoleon’s support gave the bank in the financial world allowed it to double the amount of cash in circulation, discount private notes and loans, open regional branches, increase revenues and the shareholder base, lend more, and in short create a classic virtuous business circle. It was also given important government business, such as managing all state annuities and pensions.

Comments

  1. Bruce says:

    Napoleonic paper currency was put out of business by a herculean counterfeiting effort by William Playfair, mentioned in Isegoria for his amazing knack for graphs:
    https://www.isegoria.net/2008/05/magic-ink/

    Bruce Berkowitz wrote a good biography of Playfair, titled ‘Playfair’. James Watt used Playfair as a draftsman, which he was great at, but first he chased Watt’s patent infringers, then he did the patriotic counterfeiting, then he took on and lost to the Bank of England. Give or take some land fraud implicating America’s Founding Fathers he slowed down after that.

  2. Jim says:

    Since Napoleon, banker-defying statesmen have done substantially less well. Andrew Jackson, Abraham Lincoln, Adolf Hitler, John F. Kennedy, Muammar Gaddafi…the list marcheth onward.

    Occasionally, for a time, there is an exception.

    https://youtube.com/watch?v=fmcIrsPH1FU

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