{"id":74417,"date":"2019-10-19T11:11:04","date_gmt":"2019-10-19T09:11:04","guid":{"rendered":"https:\/\/blog.napoleon-cologne.fr\/creation-of-the-bank-of-france-by-napoleon-bonaparte\/"},"modified":"2019-11-27T10:59:28","modified_gmt":"2019-11-27T09:59:28","slug":"creation-of-the-bank-of-france-by-napoleon-bonaparte-2-2","status":"publish","type":"post","link":"https:\/\/blog.napoleon-cologne.fr\/en\/creation-of-the-bank-of-france-by-napoleon-bonaparte-2-2\/","title":{"rendered":"Creation of the Bank of France by Napoleon Bonaparte"},"content":{"rendered":"

[vc_row row_height_percent=”0″ override_padding=”yes” h_padding=”2″ top_padding=”2″ bottom_padding=”1″ overlay_alpha=”50″ gutter_size=”3″ column_width_percent=”100″ shift_y=”0″ z_index=”0″][vc_column column_width_use_pixel=”yes” gutter_size=”2″ overlay_alpha=”50″ shift_x=”0″ shift_y=”0″ shift_y_down=”0″ z_index=”0″ medium_width=”0″ mobile_width=”0″ width=”1\/1″ column_width_pixel=”900″][vc_custom_heading text_size=”h1″ text_weight=”300″ text_height=”fontheight-1-6″ text_color=”color-150243″ sub_reduced=”yes”]In this very young XIXth century, the moribund economy post Revolution urged the First Consul Napoleon Bonaparte to create the Bank of France January 18th, 1800 to promote the economic recovery of the country. The thrifty Napoleon wanted to create a stable and strong value in the heart of an institution that should not serve as a fund to the state but to promote its businesses.<\/span>[\/vc_custom_heading][vc_custom_heading heading_semantic=”h3″ text_size=”h3″ text_height=”fontheight-168105″ text_color=”color-150243″]A Stormy Political and Economic Context<\/span><\/p>\n

[\/vc_custom_heading][vc_column_text]The XVIIIth century was not beneficial to paper money. Scalded by the financial scandal of John Law (1671 – 1729) in 1720, the French had plenty of time to confirm their aversion to printed money when they were fooled a second time with brandishing revolutionary assignats that were nothing else than a lightning and spectacular inflation. Some, however, got rich. Among them, the Swiss financier Jean-Fr\u00e9d\u00e9ric Perregaux (1744 – 1808). Precisely preceding the perpetual neutrality that will later make the pride of his native Switzerland, our Helvetian, who, before the Revolution, mixed with the world’s most popular aristocratic circles, was careful not to display too clearly his political opinions during the brutal change of regime. He preferred, as many at that time, to adapt them to the necessities of the moment. It was certainly the right move since the members of the nobility – fiercely attached to their heads – were quick to flee abroad taking care to carry with them a considerable part of the metal currency of the late Kingdom of France. A financial crisis hit the people, who – having nothing to fear for their own head – had everything to fear for their finances. In an extremely unfavorable economic climate, bankruptcies were numerous and internal trade paralyzed. The Directory was unable to remedy the problem in a sustainable way and it was not until the Brumaire coup (November 9-10th, 1799) to see the emergence of hope for a government stability essential to an economic recovery of the country. It was then that our dashing Swiss banker approached Bonaparte, the context and Napoleon smiling at him in concert.<\/span>[\/vc_column_text][vc_column_text]Perregaux and a few banker friends (Le Couteulx, Mallet and Perier) first obtained the right to print bank notes for their own establishment named <\/span>Caisse des Comptes Courants<\/span><\/i>. They aim to collect the savings then hoarded by individuals and increase the amount of money in circulation. The <\/span>Banque de France<\/span><\/i> was created on 18th January 1800 by decree and quickly absorbed the <\/span>Caisse des Comptes Courants<\/span><\/i>. The very young <\/span>Banque de France<\/span><\/i> settled in the H\u00f4tel de Toulouse, rue de la Vrilli\u00e8re in Paris, of course. <\/span>[\/vc_column_text][vc_single_image media=”74401″ caption=”yes” media_lightbox=”yes” media_width_percent=”100″ lbox_title=”yes” lbox_caption=”yes”][vc_column_text]The first Consul wanted to be cautious and wanted to guarantee the stability and reliability of this new institution. The first issues of notes were thus guaranteed to find their equivalent in quantity of gold of the same value to any person who wished it. To proceed to the exchange, one should simply go to the Rue de la Vrilli\u00e8re. It was all about the reputation of the bank and its future, the first Consul was perfectly aware. The French, who enjoyed nothing less than being fooled three times in a row, were at first extremely suspicious. Then little by little, confidence returned. It must be said that Bonaparte’s personal, hard-hitting and irresistible involvement had something to do with this success. He placed some of his own funds in trust with the Bank and persuaded his family and relatives to do the same. The transaction, together with the capital contributed by wealthy shareholders, provided the institution with considerable capital, which was necessary to establish its essential importance. Soon, the Bank of France was the only bank authorized to issue monetary values \u200b\u200bhence its name “central bank”.<\/span><\/p>\n

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The main clients of the bank were ordinary banks, whose business was to lend money to individuals and businesses. The principle was therefore based on the promise of repayment made by the borrower to his banker, a promise referred to as a “bill of exchange”. At the same time, ordinary banks needed money to lend to new customers. They needed to have sufficient financial reserves to act without waiting for borrower clients to repay their debts. Ordinary banks turned to the <\/span>Banque de France<\/span><\/i> and bought him notes in exchange for the bills of exchange they had at their disposal. Naturally, the amount of money increased in the country and allowed to revive commerce and industry. In turn, the latter made profits that were inevitably taxed. Finally, the increasing value of taxes levied by the state allowed the country to get rich and the First Consul to finance his army (and not his campaigns).<\/span>[\/vc_column_text][vc_custom_heading heading_semantic=”h3″ text_size=”h3″ text_height=”fontheight-168105″ text_color=”color-150243″]The <\/span>Franc Germinal<\/span><\/i>, a Reliable Economic Value<\/span>[\/vc_custom_heading][vc_column_text]The first notes issued by the Bank of France were of such value that they were not accessible to all. The 500-franc notes represented a little more than a year’s salary for a worker, and that of 1000 was equivalent to double the work, naturally. Not being convertible into gold elsewhere than in Paris, the notes further restricted the circle of lovers of bundles. These notes occupied so well the only high Parisian business that they had confused any merchant if a citizen would have the idea to give one of these papers to pay for a chicken (not far from becoming Marengo). <\/span>[\/vc_column_text][vc_single_image media=”74403″ caption=”yes” media_lightbox=”yes” media_width_percent=”100″ lbox_title=”yes” lbox_caption=”yes”][vc_column_text]On the other hand, the memory of John Law and the revolutionary assignats remained tenacious, and the French countryside still preferred metallic values \u200b\u200bfor their trade. The Revolution, by a law of August 15th, 1795 had already decided to replace the <\/span>livre tournois<\/span><\/i> by the “franc d\u2019argent” but its will alone was not enough. Indeed, the fiery and first Republic had that in common with Josephine de Beauharnais (1763 – 1814) at the same time that no one had enough money – metal for one, ready for the other – to satisfy their needs. It was thus necessary to wait for the 7th germinal year XI (March 28th, 1803) to see reappear this franc which borrowed at its date of creation the name under which it will exercise until 1928 namely, the franc “germinal”.<\/span>[\/vc_column_text][vc_column_text]