the public funds rose and the interest of money fell, to a degree of which there had been no example in France. The English funds, on the other hand, experienced a considerable fall; and the capitalists of all countries subscribed eagerly to the loans opened at Paris, as if the virtues of an individual could supply the place of the stability of law.
M. Necker has been blamed for the system of loans, as if that system were necessarily ruinous. But what means has England employed to arrive at that degree of wealth which has enabled her to sustain with such vigor twenty-five years of a most expensive war?3 Loans, of which the interest is not secured, would, no doubt, be ruinous if they were practicable; but, fortunately, they are not practicable, for creditors are very cautious in their transactions, and will make no voluntary loans without a satisfactory pledge. M. Necker, to secure the interest and the sinking fund necessary as a guarantee, balanced each loan with a corresponding reform, and the result was a lowering of expense more than sufficient for the payment of the interest. But this plain method of reducing expenditure to increase disposable revenue does not appear to be ingenious enough to the writers, who aim at being profound when they treat of politics.
It has been alleged that the life annuities granted by M. Necker for the loan of money had a tendency to induce fathers of families to encroach on that property which they ought to leave to their children. Yet it will be found that a life interest, on the plan combined by M. Necker, is as fair and prudent an object of speculation as interest on a perpetuity. The most cautious fathers of families were in the habit of advancing money on the thirty livres at Geneva, in the hope of an eventual increase of capital. There are tontines4 in Ireland, and they have long existed in France. Different modes of speculation must be adopted to attract capitalists of different views. But no one can doubt that a father of a family, if he wants to bring his expenses in order, may accomplish a great increase of capital by placing out a portion of his funds at a very high interest rate and by saving yearly a portion of this interest. I should be almost ashamed to dwell on arrangements so familiar to bankers in Europe. But in France, when the ignorant oracles of the saloons have caught, on a serious subject, a phrase of which the turn is plain to everybody, they are in the habit of repeating it on all occasions, and this rampart of folly it is very difficult to overturn.
Must I also answer those who blame M. Necker for not having changed the mode of taxation and suppressed the gabelles5 by imposing a uniform salt tax on those parts of the kingdom which enjoyed exemption from it? But local privileges were so fondly cherished that nothing short of a revolution could destroy them. The minister who should have ventured to attack them would have provoked a resistance pernicious to the royal authority without succeeding in his object. Privileged persons of one class or other were all powerful in France forty years ago, and the national interest alone was devoid of strength. Government and the people, who form, however, two main parts of the state, were unable to cope with a particular province or a particular body; and motley rights, the inheritance of the past, prevented even the King from taking measures for the general good.
M. Necker, in his treatise On the Administration of the Finances of France,6 has pointed out all the evils of unequal taxation in France; but it was a further proof of his judgment to attempt no change in this respect during his first ministry. The incessant demands of the war7 made it wholly unadvisable to incur the risk of domestic contention. A state of peace was indispensable to the introduction of any material change in finance, that the people might at least have the satisfaction of not finding their burdens increased at the time the mode of levying them was about to be altered.
While one class of persons have blamed M. Necker for leaving the system of taxation untouched, another have charged him with too much boldness in sending to the press his Compte Rendu, or official report to the King on the state of the finances.8 But he was, as has been already mentioned, in much the same circumstances as the Chancellor de l’Hôpital, and could not take a single step of consequence without being censured for prudence by the innovators, or for rashness by the partisans of the old abuses. The study of his two administrations is therefore, perhaps, the most useful that can occupy a statesman. He will trace in it the road marked out by reason between contending factions, and will discover efforts incessantly renewed to accomplish a pacific compromise between the innovators and their opponents.9
The publication of the Compte Rendu was intended to answer, in some measure, the purpose so amply attained in England by parlementary debates, that of apprising the nation at large of the true state of the finances. This, however, said some, was derogatory to the royal authority by informing the nation of the state of its affairs. A continuance of such mystery might have been possible if the Crown had had no demands to make on the public purse; but the general discontent had by this time reached a height, which rendered the further collection of taxes a most difficult matter, unless the nation had the satisfaction of knowing the use that had been made, or was intended to be made, of them. The courtiers exclaimed against a system of publicity in finance, which alone can constitute a basis of credit; while they solicited with equal vehemence, both for themselves and their connections, all the money which even such a credit could be made to supply. This inconsistency may, however, be explained by their just dread of exposing to the public eye the expenditure in which they were concerned; for the publication of the state of the finances had the very material advantage of giving the minister the support of public opinion for the various budget cuts that had to be made. To a resolute character like M. Necker the resources offered in France by a plan of economy were very considerable. The King, although personally the reverse of expensive, was of so complying a disposition as to refuse nothing to those who surrounded him; and the grants of every kind under his reign, strict as was his own conduct, exceeded the expenses even of Louis XV. To accomplish a reduction of such grants appeared to M. Necker both the first duty of a minister and the best resource of the state: by acting firmly on this plan he made himself a number of enemies at court, and among persons in the finance department; but he fulfilled his duty, for the people were at that time reduced by taxes to great distress, and he was the first to make that distress the object of examination and relief. To sacrifice himself for those whom he knew not, and to resist the applications of those whom he knew, was a painful course; but it was prescribed by conscience to him who always took conscience for his guide.
At the time of M. Necker’s first ministry the most numerous part of the population was loaded with tithes and feudal burdens, from which the revolution has delivered it; the gabelles and other local taxes, the general inequalities arising from the exemption of the nobility and clergy, all concurred to render the situation of the people much more uneasy than it is at present. Each year, the intendants decided to sell the last pieces of furniture of the poor, who found themselves incapable of paying the taxes that were demanded from them; in short, in no country in Europe were the people exposed to so harsh a treatment. To the sacred claim of this numerous body was joined that of the Crown, which ought, if possible, to be spared the odium arising from the opposition of parlements to the registry of new taxes. All this shows how signal a service M. Necker rendered to the King, by keeping up the public credit and by meeting the expense of war with progressive retrenchments; for the imposition of new burdens would have irritated the people, and given popularity to the parlement by affording it the opportunity of opposing them.
A minister who can prevent a revolutionary convulsion by doing good has a plain road to follow, whatever may be his political opinions. M. Necker cherished the hope of postponing, at least for some years, the crisis that was approaching, by introducing order into the finances; and had his plans been adopted, it is not impossible that this crisis might have terminated in a just, gradual, and salutary reform.
M. Necker’s Plans of Administration.
A finance minister, before the Revolution, was not confined to the charge of the public treasury; his duties were not restricted to a mere adjustment of receipt and expenditure; the whole administration of the kingdom was in his department; and in this relation the welfare of the country in general stood in a manner under the jurisdiction of the General Controller