Bank of France
Central bank of France, founded by Napoleon in 1800
Also known as: Bank of France, Banque de France
The Banque de France was founded by First Consul Napoleon Bonaparte in January 1800 and given a Paris note-issue monopoly in 1803 (later extended to all of metropolitan France). Quigley discusses it across Tragedy and Hope as one of the four central banks — with the Bank of England, the Federal Reserve, and the Reichsbank — that anchored the late nineteenth- and early twentieth-century international financial system, and as the institutional vehicle of the French haute banque (the Rothschild, Mallet, Hottinguer, Vernes, Mirabaud houses) that dominated French finance from the Restoration through the inter-war period.
Napoleonic Origins
Quigley's doctoral work The Public Administration of the Napoleonic Kingdom of Italy (1938) treats the Banque de France in the context of Napoleon's broader institutional consolidation — the Civil Code, the prefects, the Concordat, the lycées, and the Banque all date from the same five-year span of post-Brumaire reconstruction (1800–1804). The Banque was modelled in part on the Bank of England but with a more centralized administrative structure: shareholder ownership but day-to-day operation through a Governor and Council appointed by the state. Its 1803 note-issue monopoly for Paris and the 1848 extension to all of metropolitan France made it the principal organ of French monetary policy through the entire long nineteenth century.
The Bank, the Haute Banque, and the French Empire of Capital
Tragedy and Hope analyses the Banque de France as the institutional capstone of the French international banking system. The Council of Regents was, through the nineteenth century, dominated by the great Paris banking houses — Rothschild, Mallet, Hottinguer, Vernes, Mirabaud, Demachy — Quigley's "Demachy family, 516, 522" (T&H 1332) being one such Regent-family. Through these houses the Banque was tightly connected to the Banque de Paris et des Pays-Bas (Paribas), the Crédit Lyonnais, the Société Générale, the Comité des Forges, and the Comité Central des Houillères — the integrated steel-coal-banking complex that financed French heavy industry, the Russian railways, the Ottoman debt, and the Suez Canal. Quigley's discussion at T&H 215–219 of pre-1914 French foreign investment (chiefly to Russia and the Ottoman Empire) traces French diplomacy directly through the Banque and the Paris money market.
1922–1936: Charles Rist, Poincaré, and the Inter-War Crisis
Quigley's most detailed treatment of the Banque is in his account of the inter-war monetary system. Like the Bank of England under Norman, the Banque under successive Governors (Robineau, Moreau, Moret, Tannery, Labeyrie) was "in the hands of men like Montagu Norman of the Bank of England, Benjamin Strong of the New York Federal Reserve Bank, Charles Rist of the Bank of France, and Hjalmar Schacht of the Reichsbank" who "sought to dominate [their] government by [their] ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity… and to influence cooperative politicians by subsequent economic rewards in the business world" (T&H 337). The Poincaré stabilization of 1926 and the de jure return to gold in 1928 at 65 milligrams (a substantial under-valuation of the franc relative to the pound's over-valuation of 1925) gave France a structural trade and gold-flow advantage that shaped the early stages of the 1929–1931 crisis.
Recall of French Funds and the 1931 Crisis
Tragedy and Hope assigns the Banque a precipitating role in the 1931 international financial collapse. After the Austro-German customs-union proposal of March 1931, "the French, to discourage such attempts at union, recalled French funds from both Austria and Germany. Both countries were vulnerable" (T&H 324). The recall triggered the May 1931 collapse of Vienna's Credit-Anstalt — "a Rothschild institution" with extensive interests — which then propagated to the German banks (the July 1931 failure of the Darmstädter and the run on the Reichsbank), and from there to London (the September 1931 suspension of gold). Quigley reads this episode as a case study in how central-bank decisions reflecting national diplomatic preferences could destabilize the entire system.
Post-War Nationalization and the Modern Banque
The Banque de France was nationalized by the de Gaulle Provisional Government in December 1945, together with the four largest deposit banks. Quigley's later chapters of Tragedy and Hope note this transformation but treat the post-war Banque chiefly as one of the central banks coordinating European monetary policy through the European Payments Union, the IMF, the Bank for International Settlements, and (from 1958) the EEC institutional system. The Banque's policy autonomy from the French Treasury was substantially reduced after 1945 and only restored (in formally independent form) by the EU's Maastricht Treaty in 1992 — well after Quigley's writing.
Cited in
- tragedy-and-hope · p. 70 Quigley
The Bank of France, in the same year, set its note cover at 35 percent.
- tragedy-and-hope · p. 324 Quigley
the French, to discourage such attempts at union, recalled French funds from both Austria and Germany. Both countries were vulnerable.
- tragedy-and-hope · p. 337 Quigley
Each central bank, in the hands of men like Montagu Norman of the Bank of England, Benjamin Strong of the New York Federal Reserve Bank, Charles Rist of the Bank of France, and Hjalmar Schacht of the Reichsbank, sought to dominate its government.
- tragedy-and-hope · p. 349 Quigley
Bank of France, 55, 56, 324, 349, 355, 515, 520-1, 522.
- tragedy-and-hope · p. 515 Quigley
France, financial crisis, 354; (economic stagnation), 515; Bank of France, 515, 520-1, 522.
- tragedy-and-hope · p. 520 Quigley
Bank of France, 515, 520-1, 522.