The End of the Old Regime in Europe, 1768-1776: The First Crisis

This was required reading for a graduate course in the history of the French Revolution. Jacques Necker was born in Geneva Switzerland in 1732, he died there in1804. His father Charles, a lawyer by training, was born in the Brandenburg province in Prussia; however, he accepted a chair to teach law at the Genevan academy. Charles married Jeanne-Marie Gautier, a daughter of an important Geneva family which helped Charles move up the ladder of Genevan society. Jacques Necker was a bright boy who had a keen interest in literature. Charles steered Jacques, his second son into pursuing a career in commerce. Jacques was sent by his father to Paris to work in the banking firm of Isaac Vernet, the brother of a friend. Jacques quickly proved his abilities and found himself assuming the duties of his employer in his absence. The childless Vernet retired in 1756 and turned the reins of the firm over to the 23-year-old Necker. Necker partnered with George-Tobie de Thellusson and formed Thellusson and Necker, with Jacques managing the daily operation of the bank. Both men retired from active participation in the bank in 1772 turning it over to Necker's son Louis and Thellusson's brother-in-law. When Necker accepted his post to the royal treasury in 1776, he publicly declared his worth at 3 million livres. The bank made its profits on grain speculations and short-term loans to the French government. Necker's first foray into government finance and politics came when he was appointed as a syndic, a specialist in commerce and finance representing the stockholders interests of The French Company of the Indies in 1763 for two years. The company owned exclusive rights for trade in the French colonies of East Asia and received official government military protection of its trade posts as well. In return, the French government insisted on appointing the managers of the company. The stockholders who were primarily interested in profits were chaffed by the way the royal appointees ran the company as typical government bureaucrats, with little regard for efficiency or profit. At the end of the Seven Years War, the company lost over 100 million livres, which moved them to look for reform-minded men to suggest ideas to save it from ruin. Necker's penchant for reforming the company telegraph's his economic philosophy that he later brought to the old regime as finance minister. He was a champion of continuing the company's exclusive trade concession this pleased the mercantilist stockholders. However, he also abhorred the inefficient government control of the company this displeased the physiocrats in the company. Thus, Necker's reforms were blocked by both factions, Necker believed that had his reforms been adopted the company would not have been liquidated in 1770. Although Necker failed to persuade the right officials to save the company, his astute reforms made him well known in the public eye, with the help of his wife, his ambition for economic