Hostname: page-component-cd9895bd7-mkpzs Total loading time: 0 Render date: 2024-12-26T20:50:30.144Z Has data issue: false hasContentIssue false
  • English
  • Français

Baring, Wellington and the Resurrection of French Public Finances Following Waterloo

Published online by Cambridge University Press:  27 November 2014

Kim Oosterlinck ,
Loredana Ureche-Rangau  and
Jacques-Marie Vaslin
Kim Oosterlinck
Affiliation:
Professor, UniversitéLibre de Bruxelles, SBS-EM, Centre Emile Bernheim, 50 avenue F.D. Roosevelt, CP 114/03, 1050 Brussels, Belgium. E-mail: [email protected].
Loredana Ureche-Rangau
Affiliation:
Associate Professor of Finance, Université de Picardie Jules Verne, Faculty of Economics and Business CRIISEA, Pôle Universitaire Cathédrale, 10 placette Lafleur, BP 2716, 80027 Amiens Cedex 1, France. E-mail: [email protected].
Jacques-Marie Vaslin
Affiliation:
Associate Professor of Finance, Université de Picardie Jules Verne, IAE School of Management CRIISEA, 10, Placette Lafleur BP 2716, 80027 Amiens Cedex 1, France. E-mail: [email protected].
Get access Rights & Permissions [Opens in a new window]

Abstract

Following Waterloo, managing French public finances represented a daunting task as the country had lost a substantial part of its population and territory and had to pay huge amounts as reparations to the victors. Despite this, in just ten years, France managed to issue substantial amounts of debt with a spread, compared to the British consol, falling from more than 400 to 100 basis points. We argue that the Duke of Wellington was key in creating an environment in which Baring had an incentive to lend to France and all actors had an incentive to see French debts reimbursed.

Type
Articles
Information
The Journal of Economic History , Volume 74 , Issue 4 , December 2014 , pp. 1072 - 1102
Copyright
Copyright © The Economic History Association 2014 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

The authors wish to thank the editor, Jean-Laurent Rosenthal, three anonymous referees as well as Patrice Baubeau, Stéphanie Collet, Nicholas Dimsdale, Benoit D'Udekem D'Acoz, Marc Flandreau, Georges Gallais-Hamonno, Oscar Gelderblom, Jane Humphries, David Le Bris, Larry Neal, Kris Mitchener, Patrick O'Brien, Kevin O'Rourke, Catherine Pouget, SébastienPouget, Erwan Quéinnec, Angela Redish, Christian Rietsch, Albrecht Ritschl, Angelo Riva, Hugh Rockoff, Marti G. Subrahmanyam, Dick Sylla, Ariane Szafarz, Eugene N. White for comments and suggestions. We also thank participants in seminars at ESCP-Europe, Kedge Business School, Oxford University, Toulouse School of Economics and the Université d'Orléans, and at conferences held by the CEPR and the Economic History Association.

References

REFERENCES

Aglan, Alya. “L'invention politique de la Foi publique (1816–1838).”In 1816 ou la genèse de la Foi publique. La fondation de la caisse des dépôts et consignations, edited by Margairaz, AlyaAglan, Michel, and Verheyde, Philippe, 67–94. Genève: Droz, 2006.Google Scholar
Ahamed, Liaquat, Lords of Finance.1929, the Great Depression and the Bankers Who Broke the World. London: Windmill Books, 2010.Google Scholar
Black, Fischer, and Scholes, Myron. “The Pricing of Options and Corporate Liabilities.” Journal of Political Economy 81, no. 3 (1973): 637–54.Google Scholar
Boiteau, Paul, Fortune publique et finances de la France.Paris: Guillaumin, 1866.Google Scholar
Borchard, Edwin M. “International Contractual Claims and Their Settlement.” Judicial Settlement of International Disputes, no. 13 (1913).Google Scholar
Bruguière, Michel.“Les techniques d'intervention de la Caisse d'Amortissement dans le cours de la rente (1816–1824).” Revue historique CCLVIII, no. 1 (1977): 93–104.Google Scholar
Bulow, Jeremy, and Rogoff, Kenneth. “Sovereign Debt: Is to Forgive to Forget.” American Economic Review 79, no. 1 (1989): 43–50.Google Scholar
Colling, Alfred. La prodigieuse histoire de la bourse. Paris: Editions S.E.F., 1949.Google Scholar
Cox, Gary W. “War, Moral Hazard and Ministerial Responsibility: England after the Glorious Revolution.” TheJournal of Economic History 71, no. 1 (2011): 133–61.Google Scholar
Francis, Démier, La France de la Restauration (1814–1830). L'impossible retour du passé. Paris: Gallimard, Folio Histoire, 2012.Google Scholar
Dincecco, Mark, “Fiscal Centralization, Limited Government and Public Revenues in Europe, 1650–1913.” TheJournal of Economic History 69, no. 1 (2009): 48–103.CrossRefGoogle Scholar
Mark, Dincecco, Political Transformations and Public Finances. Europe 1650–1913. Cambridge: Cambridge University Press, 2011.Google Scholar
Eaton, Jonathan, and Gersovitz, Mark, “Debt with Potential Repudiation: Theoretical and Empirical Analysis.” Review of Economic Studies 48, no. 2 (1981): 289–309.CrossRefGoogle Scholar
Eichengreen, Barry, and RichardPortes, . “After the Deluge: Default, Negotiation and Readjustment during the Interwar Years.” In The International Debt Crisis in Historical Perspective, edited by Eichengreen, Barry and Lindert, Peter, 12–47. Cambridge: MIT Press, 1989.Google Scholar
Feis, Herbert. Europe the World's Banker 1870–1914: An Account of European Foreign Investment and the Connection of World Finance with Diplomacy before the War. London: Oxford University Press, 1930.Google Scholar
Ferguson, Niall, The house of Rothschild v.1. : Money's prophets, New York: Viking, 1999.Google Scholar
Flandreau, Marc, and Flores, Juan. H. “Hamlet without the Prince of Denmark: Relationship Banking and Conditionality Lending in the London Market for Government Debt, 1815–1913.” CEPR Discussion Papers 7915, 2010.Google Scholar
Frey, Bruno, and Waldenström, Daniel. “Using Financial Markets to Analyze History: The Case of the Second World War.” Historical Social Research 32, no. 4 (2007): 330–50.Google Scholar
Gabillard, Jean, “Le financement des guerres napoléoniennes et la conjoncture du Premier Empire.” Revue Economique 4, no. 4 (1953): 548–72.Google Scholar
Bertrand, Gille, Histoire de la maison Rothschild, vol. 1&2, Génève: Librairie Droz, 1965.Google Scholar
Gelderblom, Oscar, and Jonker, Joost.“Public Finance and Economic Growth: The Case of Holland in the Seventeenth Century.” The Journal of Economic History 71, no. 1 (2011): 1–39.Google Scholar
Gontard, Maurice. La Bourse de Paris 1800–1830. Paris: Edisud, 2000.Google Scholar
C., Hansard Thomas, (published under the supervision of), The Parliamentary Debates from the Year 1803 to the Present Time, London, Volume 35, 1817.Google Scholar
Hoffman, Philip T., and Rosenthal, Jean-Laurent. “The Political Economy of Warfare and Taxation in Early Modern Europe: Historical Lessons for Economic Development.” In Frontiers of Institutional Economics, edited by Droback, John N and Nye, John V.C., 31–55. Academic Press, 1997.Google Scholar
Homer, Sydney, and Sylla, Richard. A History of Interest Rates. New Brunswick: Rutgers University Press, 1996.Google Scholar
Ivanov, Martin, and Tooze, Adam. “Disciplining the ‘Black Sheep of the Balkans’: Financial Supervision and Sovereignty in Bulgaria, 1902–38.” Economic History Review 64, no. 1 (2011): 30–51.Google Scholar
Kairys, Joseph P., and Valerio, Nicholas III. “The Market for Equity Options in the 1870s.” Journal of Finance 52, no. 4 (1997): 1707–23.Google Scholar
Kang, Zheng.“L'Etat constructeur du marché financier.” In Le Marché financier français au XIXe siècle Vol 1. Récit,edited by Pierre-CyrilleHautcoeur, , 159–94. Paris: Publications de la Sorbonne, 2007.Google Scholar
Kaplan, Herbert H. Nathan Mayer Rothschild and the Creation of a Dynasty. The Critical Years 1806–1816. Stanford: Stanford University Press, 2006.Google Scholar
Laffitte, Jacques, Réflexions sur la réduction de la rente, et sur l’état du crédit. Paris: Galerie de Bossange Père, 1824.Google Scholar
Lacave-Laplagne, Jean. “Rapport fait au nom de la commission chargée d'examiner la proposition de M. Alexandre Gouin sur la Conversion des Rentes,”in Procès Verbaux de la Chambre des Députés, Tome Troisième, Paris, 1836.Google Scholar
Larousse, Pierre, Grand Dictionnaire Universel du XIXème Siècle, Paris: Administration du grand Dictionnaire universel, 1869.Google Scholar
Lee, Junsoo, and Strazicich, Mark C.. “Minimum Lagrange Multiplier Unit Root Test with Two StructuralBreaks.” Review of Economics and Statistics 85, no. 4 (2003): 1082–89.Google Scholar
Lindert, Peter H., and Morton, Peter. J. “How Sovereign Debt has Worked.” In Developing Country Debt and Economic Performance, Volume 1: The International Financial System, edited by Sachs, Jeffrey, 225–36. National Bureau of Economic Research, 1989.Google Scholar
Lipson, Charles.“International Debt and National Security: Comparing Victorian Britain and Postwar America.” In The International Debt Crisis in Historical Perspective, edited by BarryEichengreen, and Lindert, Peter, 189–226. Cambridge: MIT Press, 1989.Google Scholar
Longford, Elisabeth. Wellington: Pillar of the State. London: Weidenfield and Nicholson, 1972.Google Scholar
Margairaz, Michel, “Les Caisses d'amortissement et des dépôts et consignations, la trésorerie, la dette publique et la genèse du système de crédit en France dans le premier XIXè siècle ou Les paradoxes de la confiance.” In 1816 ou la genèse de la Foi publique. La fondation de la caisse des dépôts et consignations,edited by AlyaAglan, Michel Margairaz and Philippe Verheyde, 155–76. Génève: Droz, 2006.Google Scholar
Mitchener, Kris, and Weidenmier, Marc.“Empire, Public Goods, and the Roosevelt Corollary.” The Journal of Economic History 65, no. 3 (2005): 658–92.Google Scholar
Mitchener, Kris, and Weidenmier, Marc.“Supersanctions and Sovereign Debt Repayment.” Journal of International Money and Finance 29, no. 1 (2010): 19–36.Google Scholar
Moore, Lyndon, and Juh, Steve.“Derivative pricing 60 years before Black–Scholes: Evidence from the Johannesburg Stock Exchange.” Journal of Finance 61, no. 6 (2006): 3069–98.Google Scholar
Nervo Jean-Baptiste Rosario Gonzalve de. Les finances françaises sous la Restauration 1814–1830. Paris: Michel Lévy Frères, 1865.Google Scholar
Ng, Serena, and PierrePerron, .“Unit Root Tests in ARMA Models with Data-Dependent Methods for the Selection of the Truncation Lag.” Journal of the American Statistical Association 90, no. 429 (1995): 268–81.CrossRefGoogle Scholar
North, Douglas C., and Weingast, Barry R..“Constitutions and Commitment: the evolution of institutions governing public choice in seventeenth century England.” The Journal of Economic History 49, no. 4(1989): 803–32.Google Scholar
Occhino, Filippo, Oosterlinck, Kim, and White, Eugene N.. “How Occupied France Financed Its Own Exploitation During WW2.” The American Economic Review, Papers and Proceedings 97, no. 2(2007): 295–99.Google Scholar
Occhino, Filippo, Oosterlinck, Kim, and White, Eugene N..“How Much Can a Victor Force the Vanquished to Pay?” The Journal of Economic History 68, no. 1 (2008): 1–45.Google Scholar
Oosterlinck, Kim, “Reparations.” In The New Palgrave Dictionary of Economics,edited by Durlauf, Steven N. and Blume, Lawrence E., Palgrave Macmillan: Online Edition, http://www.dictionaryofeconomics.com/article?id=pde2009_R000279, 2010.Google Scholar
Oosterlinck, Kim, “Sovereign Debt Defaults: Insights from History.” Oxford Review of Economic Policy 29, no. 4 (2013): 697–714.Google Scholar
Oosterlinck, Kim, and Ureche-Rangau, Loredana. “Interwar Romanian Sovereign Bonds: The Impact of Diplomacy, Politics and the Economy.” Financial History Review 19, no. 2 (2012): 219–44.Google Scholar
Pasquier, Etienne-Denis. Histoire de mon Temps. Mémoires du Chancelier Pasquier, edited by d'Audiffert-Pasquier, M. le Duc, 6 volumes, Paris: Plon, 1893–1895.Google Scholar
Perron, Pierre.“The Great Crash, the Oil Price Shock, and the Unit Root Hypothesis.” Econometrica 57, no. 6 (1989): 1361–401.Google Scholar
Platt, Desmond C. M. Finance, Trade, and Politics in British Foreign Policy 1815–1914. Oxford: Clarendon Press, 1968.Google Scholar
Plessis, Alain, “Entre les caisses chargées de l'amortissement sous l'Ancien Régime et les deux caisses de 1816 : la Caisse d'Amortissement de Napoléon (1799–1815).”In 1816 ou la genèse de la Foi publique. La fondation de la caisse des dépôts et consignations,edited by Margairaz, AlyaAglan, Michel and Verheyde, Philippe, 43–64.Génève: Droz, 2006.Google Scholar
Pothier, Robert Joseph. Traité du Contrat de Constitution de Rente, Paris, 1773.Google Scholar
Stasavage, David, “Partisan Politics and Public Debt: The Importance of the “Whig Supremacy” for Britain's Financial Revolution.” European Review of Economic History 11, no. 1 (2007): 123–53.Google Scholar
Sussman, Nathan, and YishayYafeh. “Institutional Reforms, Financial Development and Sovereign Debt: Britain 1690–1790.” The Journal of Economic History 66, no. 4 (2006): 906–35.Google Scholar
Vaslin, Jacques-Marie.“Les rentes françaises au XIX è siècle, le marché des fonds d’état était-il efficient?” Unpublished Ph.D., Université d'Orléans, 1999.Google Scholar
Vührer, Alphonse.Histoire de la Dette Publique en France. Paris: Berger etLevrault, 1886.Google Scholar
Waresquiel, Emmanuel de.Talleyrand le prince immobile Edition revue et augmentée. Paris: Fayard, 2006.Google Scholar
Wellington, Arthur Duke of. Supplementary Dispatches, Correspondence and Memoranda of Field Marshal Arthur Duke of Wellington K. G., edited by Duke of Wellington K. G., Volume the Eleventh. Occupation of France by the Allied Armies; Surrender of Napoleon and Restoration of the Bourbons (July 1815 to July 1817), London: John Murray, 1864.Google Scholar
Wellington, Arthur Duke of. Supplementary Dispatches, Correspondence and Memoranda of Field Marshal Arthur Duke of Wellington K. G., edited by Duke of Wellington K. G., Volume the Twelfth. Settlement of Claims on France; Financial Situation of France; Differences between Spain and Portugal; Negotiations Respecting the Colonies of Spain in America; Plot and Attempt to Assassinate the Duke of Wellington; Evacuation of France by the Allied Armies, (July 1817 to end of 1818), London: John Murray, 1865.Google Scholar
White, Eugene N. “Was there a Solution to the AncienRégime's Financial Dilemna.” The Journal of Economic History 49, no. 3(1989): 545–68.Google Scholar
White, Eugene N. “The French Revolution and the Politics of Government Finance, 1170–1815.” The Journal of Economic History 55, no. 2(1995): 227–55.Google Scholar
White, Eugene N. “Making the French Pay: The Cost and Consequences of the Napoleonic Reparations.” European Review of Economic History 5, no. 3 (2001): 337–65.Google Scholar