Jacques Necker - Finance Minister of France

Finance Minister of France

In October 1776 Necker was made director-general of the finances – he could not be controller because of his Protestant faith. He gained popularity in regulating the finances by attempting to divide the taille capitation tax more equally, by abolishing the vingtième d'industrie, and establishing monts de piété (establishments for loaning money on security). His greatest financial measures were his usage of loans to help fund the French debt and his usage of high interest rates rather than raising taxes. He also advocated loans to finance French involvement in the American Revolution.

In 1781, France was suffering financially, and because Necker was Director-General, he was blamed for the rather high debt accrued from the American Revolution. While at court, Necker had made many enemies because of his reforming policies. Marie Antoinette was his most formidable enemy, so Louis – listening to Antoinette – would become a factor in Necker's resignation: Louis would not reform taxation to bring in more money to cover debts, nor would he listen to Necker and allow him to be a special adviser, because this was strongly opposed by the ministers.

Also in 1781, Necker published his most influential work: the Compte rendu au roi. In it, Necker summarizes governmental income and expenditures, giving the first-ever public record of royal finances. It 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 statistics given in the Compte rendu were completely false and misleading. Necker wanted to show France in a strong financial position when the reality was much worse. He "cooked the books", hiding the crippling interest payments that France had to make on its massive £520 million in loans (largely used to finance the war in America) as normal expenditure. When he was criticized by his enemies for the Compte rendu, he made public his 'Financial Summary for the King', which appeared to show that France had fought the war in America, paid no new taxes and still had a massive credit of £10 million of revenue.

In retirement he occupied himself with literature, producing his famous Traité de l'administration des finances de la France (1784). He also spent time with his only child, his beloved daughter, who in 1786 married the ambassador of Sweden and became Madame de Staël. In 1787 Necker was banished by the lettre de cachet 40 leagues from Paris for his very public exchange of pamphlets and memoirs attacking his successor as minister of finance, Calonne. Yet in 1788 the country had been struck by both economic and financial crises, and Necker was called back to the office of Director-General of Finance to stop the deficit and to save France from financial ruin.