Money, Banks and Finance in Economic Thought

The first French proposal for the introduction of banknotes in 1694: about an unknown economist and nearly forgotten polymath, Jean de Hautefeuille (1647-1724) (Joel Félix and Gabriel Sabbagh)

Gabriel Sabbagh, University Paris Diderot (retired)

' Je vous prie de me dire vôtre sentiment sur une Idée qui m'est venuë... touchant la rareté des Especes d'Or & d'Argent.. & sur un moyen que j'ai imaginé pour en rétablir l'abondance, & pour remedier aux désordres que cette rareté a causé dans le Commerce...' This is the beginning of the first of three pamphlets published by Hautefeuille in 1694, 1715 and 1716. The earliest one aired a proposal to use the king's 'Rescriptions' as 'Argent comptant' (running money). While these papers were designed to prevent counterfeiting, Hautefeuille paid attention to Economics by warning to not issue too many of them and to withdraw and refund them after the end of the war (compare with recent quantitative easing). In 1715 (his pamphlet was dedicated to the Régent) and in 1716, Hautefeuille, introduced other ideas, notably a European scheme of solidarity whereby the debts of each country would be guaranteed by the other ones. Contrary to Castel de Saint-Pierre in another context, Hautefeuille did not mention Turkey. These tracts have remained unknown, although part of Hautefeuille's work on lotteries (Hautefeuille, a perpetual inventor, suggested in 1721 to transform in lottery tickets the plethora of banknotes) is briefly mentioned by Legay. We propose to examine Hautefeuille’s thoughts and assess their originality in the age of the Financial Revolution characterized by a variety of financial experiences across Europe. Hautefeuille shared some of Law's concerns (in the first page of his 1705 book Law intended to 'Remedy the Difficulties the Nation is under from the great Scarcity of Money') and we know that he was acquainted with developments in England. Hautefeuille's scientific pamphlets confirm a good knowledge of English science. In 1715, he seems to take credit for having inspired 'feu Milord Comte d'Halifax' (who was instrumental in the creation of the Bank of England). He later on claimed to have anticipated John Law. Without committing ourselves to confirm that the Hautefeuille 1694 tract influenced what happened in England, we will put his pamphlets in perspective with the monetary events in France and England in the early eighteenth century.

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Keywords: banknotes, Hautefeuille, 1694, John Law, European solidarity, England