Markets, Productivity, and Happiness in a Historical Perspective

Public Opinion and Credit: The controversies around the Caisse d'Escompte (1776-1789)

Fleider Marchevsky Julia, Universidade Federal de Minas Gerais

The Caisse d'Escompte (Discount Bank) – established by Turgot in 1776 following a project of the banker Isaac Panchaud – became a subject of conflict by two distinct political groups in the years preceding the French Revolution. One group, which was even called the Panchaud committee, included Panchaud and other distinguished figures such as the Comte de Mirabeau, Talleyrand, and Étienne Clavière. They were opposed to a second group headed by the Swiss banker and finance minister Jacques Necker. Our presentation examines their main theoretical and political differences, and how they tried to convince the public of their ideas by a series of pamphlets aiming a broader audience. The dispute involved the publication of many pamphlets trying to convince the general public of which should be the role of the bank in relation with public debt and the issue of banknotes. Inspired by the Bank of England, Necker defended that if the public opinion entrusted the government with great confidence, then the Caisse d'Escompte could issue banknotes against public loans. However, Mirabeau conceived state loans as an intrinsically precarious asset (against which no notes should be issued), since they were simply based on public opinion, and not on real wealth. The two parties also quarreled about how the government should guarantee its loans, by necessarily a tax or not. As we will show, those questions were not merely technical ones, but involved different conceptions of the role of public opinion in financial matters, and of how public confidence should be acquired to guarantee credit.


Keywords: Caisse d'Escompte; Public Opinion; Credit; Jacques Necker; Isaac Panchaud; Comte de Mirabeau,