good offices: intermediation by corporate bodies in early modern french public finance

Economic History Association

Good Offices: Intermediation by Corporate Bodies in Early Modern French Public FinanceAuthor(s): Mark PotterSource: The Journal of Economic History, Vol. 60, No. 3 (Sep., 2000), pp. 599-626Published by: Cambridge University Press on behalf of the Economic History AssociationStable URL: http://www.jstor.org/stable/2566432 .

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THE JOURNAL OF ECONOMIC HISTORY

VOLUME 60 SEPTEMBER 2000 NUMBER 3

Good Off ces: Intermediation by Corporate Bodies in Early Modern

French Public Finance MARK POTTER

The old-regime monarchy, particularly during the reign of Louis XIV, did much of its borrowing through the mediation of privileged corporate bodies that sought lenders on the private market and then acted as guarantors against royal default. After comparing the creditors ofvarious privileged bodies and considering the reasons why some were more successful than others in attracting a wide circle of creditors, this study argues for a reconsideration of the constitutional-absolutist dichotomy in the historiography of the early modern financial revolution.

O Id-regime France was a society ofprivileged corporations. The outcome of a centuries-long process by which the Crown expanded the scope of

its authority, French society comprised an incalculable number of legally distinct groups, each enjoying its own rights and duties. These groups-we shall follow French usage in terming them corps-were in some cases territorial, representing parishes, communes, or in some cases entire provinces. Most, though, were professional corps, such as guilds, merchant companies, and royal courts of law. Corps had always served a financial function. Cal- culating and collecting taxes at the level of the parish or commune was a much simpler task for royal officials than taxing each individual subject of the Crown. Likewise in that handful of provinces with estates in place to negotiate tax obligations with royal authorities, the costs and risks of partitioning and then collecting the agreed-upon taxes went to the local authori-

The Journal of Economic History, Vol. 60, No. 3 (Sept. 2000). C) The Economic History Association. All rights reserved. ISSN 0022-0507.

Mark Potter is Assistant Professor, Department of History, University of Wyoming, Laramie, WY 82071-3198. E-mail: [email protected].

A version of this article was delivered at the Annual Meeting of the Economic History Association in 1996; I thank Nathan Sussman for his helpful comments at that gathering. More recently, I presented my findings to the UCLA Von Gremp Workshop in Economic History and the History of Entrepreneur- ship, and I received constructive questions and comments from all the participants. Three anonymous reviewers also provided very useful critiques. Naomi Lamoreaux and Jean-Laurent Rosenthal both read several incarnations of this article, and I owe a special debt of gratitude to each of them. This article stems in part from an ongoing project with J.-L. Rosenthal, and it would not have been possible to produce without the support that he has offered me over the course of several years.

599



600 Potter

ties. Under Louis XIV (reigned 1643 to 1715), this financial function of privileged corps became their virtual raison d'e-re, as the Crown pressured them to borrow funds for the benefit of the royal treasury to a degree and at an intensity greater than ever before. By bringing to the fore what had been an implicit role for so many corps, and by transforming many of them into a sort of financial intermediary, the Crown opened up the political balance between royal authority and elite interests to important changes that would have a lasting impact up through the financial crisis that helped destroy the Old Regime in 1789.

Much of the literature on the early modern financial revolutions in the Netherlands and in Britain suggests that there were constitutional preconditions for efficient public borrowing. Douglass North and Barry Weingast argue that regimes had to be constitutionally bound to honor their own com- mitments and to uphold property rights before public finance could be regu- larized, capital markets developed, and economic growth sustained. The British parliamentary regime established after the Glorious Revolution of 1688, with its built-in checks and balances, was ideal for its credible commitment to property and contract. Likewise, James Tracy argues that an essential element of financial revolutions is the creation of a legislature whose members "obligate themselves in their collective capacity" to honor its debts, thereby engendering confidence among potential creditors. This was achieved in the decentralized states system ofthe Habsburg Netherlands in the 1540s when the provincial estates, particularly those of Holland, began to fund long-term debt with specifically earmarked revenues. In so doing they succeeded in lowering the costs of borrowing to around 3 percent.1

Implicit in these arguments is the idea that absolutism was constitutionally incompatible with the conditions necessary for low-cost, long-term borrowing. Only after parliamentary sovereignty was firmly established in 1688 was there sufficient "credible commitment"; likewise the almost total devo- lution of power to states and towns in the sixteenth-century Dutch Nether- lands created the constitutional preconditions for a financial revolution. Conversely, Tracy argues that in sixteenth-century France these institutional foundations for a financial revolution had crumbled: the Estates-General no longer took a leading role in setting taxes, and "parliamentary bodies were thus in no position to act as guarantors of the royal debt." Without constitutional checks, the argument goes, kings tended to renege on contracts, sell privileges and monopolies, and manipulate property rights. Short-term loans, often coerced and never realistically guaranteed, were typically chosen over

I North and Weingast, "Constitutions," pp. 803-08; and Tracy, Financial Revolution, pp. 1-3, 45, and 71-107. John Brewer (Sinews, pp. 88-91) also writes of the constitutional significance of the Glorious Revolution, but he adds that the ensuing financial revolution would not have been possible without effective tax collection by a government bureaucracy.



French Public Finance 601

voluntary, long-term, funded debt. Not even a concern for preserving a creditworthy repute always sufficed to prevent confiscatory practices, since the immediate needs of war often pressed statesmen to sacrifice future opportunities for immediate gain.2

This study will demonstrate that French royal finances under Louis XIV did not face stark choices between "traditional" absolutist policies and "modern" constitutional arrangements. Through the mediation of various privileged corps, elements of a financial revolution-voluntary, long-term, funded debt at low interest rates-did evolve. And yet there were no fundamental constitutional changes in old-regime France. Privilege, so anathema to parliamentary ideology, continued explicitly to underpin the whole system of French public finance.

The last half of Louis's reign was marked by two long and costly wars fought against broad coalitions: the Nine Years' War of 1689 to 1697, and the War of the Spanish Succession from 1701 to 1713. To finance these wars, Louis had at his disposal several possible strategies. Taxes were of course raised, though this option quickly ran up against structural and political limits in a depressed, predominantly agrarian economy. Other financial expedients included the direct solicitation of long- and short-term loans, and the sale of offices and privileges.'

Louis came to depend more and more upon this last source of extraordinary finance during the final decades of his reign. While the capital value of privately possessed offices totaled approximately 420 million livres in 1664, the sale of newly minted government offices to private individuals, along with capital infusions from holders of preexisting offices, brought as much as 700 million livres to the royal treasury during the 25 years preceding Louis' death in 1715.4 Officeholders, like all others arrayed in corps and enjoying specific privileges, found themselves under unrelenting pressure to pay for the continued recognition oftheir status. Thus venal officer corps, along with municipalities and provincial estates, paid the Crown to keep competing or overlapping offices and privileges off the market. In general terms, there was nothing new about this practice, especially as a response to wartime exigencies. Yet under Louis, privileged corps took on much more explicit roles as financial intermediaries. Whereas heretofore the money from venal office most often came from the holder's personal savings, now the corps more likely borrowed the sums and then serviced their debts with increased stipends (gages) paid by the

2North and Weingast, "Constitutions," p. 807; and Tracy, Financial Revolution, p. 21. 3 Collins, Fiscal Limits; and Dessert, Argent, pp. 158-61. 4Dessert, Argent, p. 167. Marion (Histoirefinanciere, vol. 1, p. 64) places the capital value of offices

created during this "disastrous end of the reign" at 542,067,078 livres. "End of the reign" presumably refers to the period of the War of the Spanish Succession. Doyle (Venality, pp. 53-55) argues for a net increase of 246 million livres in the capital value of offices from 1664 to 1722, but only after a suppres- sion of about 454 million livres to officeholders beginning in 1714 and 1715.



602 Potter

9

A Royal voluntary

[3 Royal forced -Burgundian Estates A

8 A

7 A A A A A

o El~~~ ~~ ~~~~~~~ A A A A

6

A

5 DEE U Ela

4 A

3

1680 1685 1690 1695 1700 1705 1710

FIGURE 1

COMPARATIVE INTEREST RATES ON RENTES

Sources: Forbonnais, Recherches; and A.D.C.O., C4577-4584.

Crown. Likewise, provincial estates came under royal pressure to turn an occasional practice into a defacto fixed arrangement as they borrowed sums against regularly renewed Crown-granted revenues.'

Few privileged corps, if any, were immune to the Crown's pressure; if they hoped to preserve their exclusive status they had no choice but to serve as financial intermediaries. The Crown, for its part, realized important savings through such arrangements. The king was a poor credit risk and could attract voluntary lenders only by paying a premium. As Figure 1 illustrates, the Crown frequently paid more to borrow than did the Estates of Burgundy, even though the latter were essentially borrowing on behalf of the former. The uncertainties of war drove rates on royal bonds toward 7 or 8 percent, while the Estates never had to pay more than 5.55 percent. Furthermore, the Estates' bonds were fully subscribed. The Crown, by contrast, was rarely able to sell its bonds at face value on a free market, such that their yield (and thus the Crown's cost of credit) was higher than the coupon rate. Thus, during the last years of the War of the Spanish Succession, the yields on voluntary royal bonds continued to surpass the Estates', despite their lower coupon rates.6

'Bien, "Offices," pp. 89-114; Doyle, Venality, pp. 37-42; and Robin, Compagnie, pp. 109-10. 6Velde and Weir, "Financial Market," pp. 19-22; and Hoffman, Postel-Vinay, and Rosenthal,

"Redistribution," p. 261.




For legal and practical reasons explored later, privileged corps could borrow at rates much lower than the Crown's, closer to the 4 to 5 percent paid by private borrowers with good credit. The Crown gave up much less in revenues granted to estates and in gages paid to venal officer corps than it would have to pay leery creditors directly. There were, however, important political rami- fications to these arrangements of financial mediation.7 By this strategy, the Crown was essentially transferring the political responsibility for public finance to provincial bodies and to semiprivate groupings of officials. Examples of such mediation are numerous. During the Nine Years' War, the Estates of Burgundy, a local tax authority representing that province in regular negotiations with the Crown, borrowed around 5.6 million livres, of which 4.8 million went to the Crown. Slightly more than halfofthis (2.75 million) supplemented tax revenues in the province's regular annual contributions; the remainder (2.06 million) represented extraordinary payments, falling under such designa- tions as "emergency aid" to the Crown and "repurchases" of edicts and offices.8 Numerous examples of the mediation of venal officer corps date from this period as well. The secretaires du roi of the Grande Chancellerie in Paris mortgaged their own offices so that their corps could borrow 6.37 million livres for the Crown over the period from 1701 to 1707.9

A rough estimate of total borrowing through privileged corps in the period from 1689 to 1715 suggests that such arrangements made up a significant proportion of total war finance. The total debt incurred by the Crown through direct solicitation of loans was 1.537 billion livres.10 In addition, Doyle has estimated that venality brought the Crown approximately 700 million livres during Louis's final two wars. Ordinary taxes on officeholding, such as muta- tion fees and payments to guarantee succession rights, accounted for about 61 million of this sum; the remainder derived from sales of new offices and extraordinary payments demanded of officeholders for which they would likely have borrowed. Meanwhile, the four "largest" provincial estates-Bur- gundy, Brittany, Languedoc, and Provence-borrowed an estimated 55.4 million livres in extraordinary support of the Crown.11 Total borrowing thus

7The attention of historians has focused mostly on the political impact of these financial arrangements in the pre-Revolutionary era at the end of the eighteenth century. See Bien, "Offices"; and Bossenga, Politics.

8 Potter and Rosenthal, "Politics," p. 593. 9Bien, "Secretaires," p. 162. '1 Briggs (Early Modern France) puts the debt at 240 million livres in 1683; outstanding debt in

1719, according to one source, was 1.777 billion. See F6lix, "Dettes," pp. 606-08. 11 Doyle, Venality, p. 51; and Boislisle, Correspondence, vol. 1, pp. 583-97, and vol. 2, pp. 583-605. The

precise amout borrowed by the Estes of Burgundy was 12,191,030 lirs. Marion (Histoirefinanci&re vol. 1, pp. 52-58) offers figures for the total debts held by these four provincial estates in 1789, which they had raised specifically for th purpose of extrardinary support to the Crown I have applied the proportions derived from the 1789 figures to the known figure of borrowing by the Burgundian Estates to aive at my figure for al four between 1689 and 1715. It is, to be sure, an imperfect methodthat offers avery roughestinate, but my present interest is merely to suggest the approximate weight of financing trugh such intermediation.



604 Potter

equaled 2.231 billion livres, of which 28.6 percent came through the mediation of venal officer corps and 2.5 percent from four provincial estates. The figure for mediation through venal officer corps is slightly overestimated.12 I have not, however, accounted for the financial mediation of guilds, municipalities, and the fnancially important Assembly of the Clergy."3 One-third is thus a conservative estimate of the proportion of extraordinary borrowing attributed to privileged corps. In short, the mediation of privileged corps provided a key source of wartime financial support.

The privileged corps that mediated royal finances were not sovereign representative institutions. The very privileges by which they existed and which spelled out their prerogatives, depended on continued royal recognition and goodwill. Where they existed, provincial estates could claim certain rights based on custom, but the Crown could, and in some cases did, circum- vent them and raise taxes without their accord. Corps of venal officeholders existed by virtue of the Crown having initially created the property rights and privileges that constituted their positions; and while the Crown was bound in theory to uphold property and contract, the history of royal defaults suggests that the practical reality was different. In short, the mediation of finances by privileged corps was distinctly different from the sovereign parliamentary control over taxing and borrowing seen in the both the sixteenth-century Dutch and the post-1688 English cases. Indeed, it was largely their dependence on royal recognition that drove privileged corps to accept their positions as financial intermediaries; failure to do so might have led to their circumvention or disfranchisement. On the other hand, if the Crown were to expect any financial gains from borrowing through intermediaries, some degree of political independence had to be accorded the mediating corps so that they could assure their lenders that their investments were reasonably safe.

The ability to attract sufficiently wide networks of creditors assured privileged corps that they would be able to meet royal demands and protect themselves from attacks on their status. To do this, corps pieced together lending clienteles, turning first to local notables who had an interest in defending local privileges and who were well informed of corps's financial dealings. The more successful corps were able to attract lenders from beyond such local clienteles, drawing loans from afar, both geographically and socially. Indeed, in this corporate society not all privileged corps were created equal. Some were stronger and more independent than others, able to offer guarantees and assurances to a wider array of lenders, as evidenced through their

12 We can expect most, though not all, of the extraordinary sums paid by officeholders to have been borrowed by venal officer corps acting as intermediaries. According to Robin's study of the corps of secretaires du roi (Compagnie, pp. 108-10), the transition to borrowing through corps, rather than meeting exactions from personal assets, was abrupt andvirtually total with the outbreak of war in 1689.

13 For the Assembly of the Clergy, see Michaud, Aglise.




borrowing records. Different types of corps attracted networks of creditors that varied in scope and makeup. Indeed, identifying the lenders offers keen insight into the corporate intermediaries themselves. To attract coalitions of lenders with no apparent personal or political ties to the corps to whom they lent must have required some political power to guarantee that debt. The data on lenders presented here suggest that provincial estates in particular were on the forefront of mediation for the Crown. While the innumerable venal officer corps together raised significantly more than did estates, individual provincial estates nonetheless raised very substantial amounts, and they did so with stronger guarantees offered to wider clienteles of lenders. To show how and why these divergent patterns of mediation developed, I will first examine the private credit market in France under Louis and the roles of brokers and intermediaries within that market. I will then turn to the methods by which different corps guaranteed their debts and the resulting risks for lenders. Identifying the lenders, then, will indicate not only which corps were most successful in attracting a wide array of investors, but also why they were more successful. By way of conclusion, I will place this system of mediated public debt in a broader historical framework.

PRIVATE MARKETS AND PUBLIC INTERMIEDIARIES

Recent research has shed much light on private credit markets in old- regime France. Despite a lack of lending or deposit institutions, private capital markets were quite dynamic both in rural and urban settings. Notaries played an important role in matching borrowers with lenders, and in supply- ing the latter with information about the former. During Louis XIV's reign, the commonest long-term credit instrument was the perpetual rente, which entitled the holder to annual interest payments at or below the legally desig- nated maximum rate. In accordance with usury laws, the lender received interest payments but could not demand repayment of the principal; rentes were amortized only if the borrower chose to repay the principal.14

Information was thus crucial, since lenders needed strong assurances that the value and integrity of collateral pledged by borrowers would be pre- served over indefinite periods. There was no national registry of mortgages, and hence no sure way for lenders to know whether a borrower's property was pledged to multiple lenders, or whether mortgaged property even remained in the borrower's possession. Notaries were well placed to broker this type of information, and were therefore crucial to the functioning of the private credit market.

14 Rosenthal, "Credit Markets," pp. 129-57; and Hofflnan, Postel-Vinay, and Rosenthal, "Private Credit Markets," pp. 293-306, and "What Do Notaries?"



606 Potter

Still, notaries could not completely resolve the problem of asymmetric information. A borrower's reputation was thus crucial for instilling confidence in potential lenders, and for this reason members of the elite, whose status signified wealth and the secure possession of property, found willing lenders much more readily than did the common run. Much private credit activity thus represented a transfer of funds among the elite, from those with capital to lend to those with the property and reputation (credit) on which to borrow.15

The Crown was long aware that the lack of public information on mortgages had shackled the credit market, and it made several attempts to create a central registry in which all creditors would have to declare their liens. Most notably, Louis XIV tried to create a central registry of mortgages with an edict of April 1673, Louis XV by another in June 1771. The motivation was clear. A commission studying the edict of 1771 referred to the secrecy of mortgaged property (la clandestinite de I 'hypotheque), and the consequent risk for lenders of not knowing whether borrowers had already mortgaged their property, as the primary reasons why a central registry was needed.16

Opposition from the parlements, the highest courts of law responsible for examining and registering royal legislation, forced the Crown to renounce all these plans. In response, the Crown set up a commission in 1775 to study the reasons for this resistance, and it found that most opposition sprang from a concern for privacy. Perhaps more relevant to the final decades of the eighteenth century, a period when political thinkers grew increasingly concerned about royal despotism, was the fear that public information on mortgages could aid the Crown in its search for taxable wealth. 17 What remained constant throughout the Old Regime, though, was a concem for dignity and the feeling that a universal requirement publicly to declare private patrimonial matters would violate it. Members ofthe elite-the very same individuals who were politically well placed to oppose these royal edicts-also benefited from the common use of reputation as a gauge of creditworthiness, and mortgage information made public might have seriously undermined their ability to borrow on the basis of cr&dit. "

While these royal reform efforts ended in failure, Louis XIV did establish strong incentives to declare mortgages held on privately possessed government offices. According to an edict of February 1683, creditors who registered their

'5 Hofflman, Postel-Vinal, and Rosenthal ("Private Credit Markets," pp. 294-99) found that of their sample, 64 percent of Parisian borrowers from 1730 to 1788 were nobles and venal officers; among lenders, 39 percent were nobles and officers and 33 percent were merchants, bourgeois, notaries, and financiers.

16 A.N., E 37071, Resume' duprojet de la loi sur les hypotheques. 7 A.N., K 871, Reflexions ge'nerales et particuliers sur le projet d 'dit portant etablissement des

offices de conservateurs des hypotheques, 1770. 18 A.N., K 871, Reflexions ge'nerales. See also Hoffman, Postel-Vinay, and Rosenthal, "Redistribu-

tion," p. 265.




liens on offices were to be granted seniority in the event of default."9 Thus only nine years after abandoning his attempt at overall mortgage reforn, Louis succeeded in establishing a source of public information on pledged offices.

Why were offices an exception to the Crown's otherwise bleak record of eliciting public mortgage informnation? One answer surely lies in the semipublic nature of offices and the greater degree of royal prerogative in fixing property rights over them. The edict of 1683 also suggests that Louis recognized the importance of offices as a source of royal credit, and the need for officeholders to be able to borrow against them on his behalf. With mortgage information made public, officeholders would be able to tap up to the full market value of their offices or the capital value of any anticipated increases in gages. Indeed, both their reputation as members of the elite and the public disclosures regard- ing their mortgageable property help to explain why officeholders made up a disproportionate share of borrowers on the Parisian private credit market.20

If we turn away from individual borrowers and focus instead on the privileged corps, we see that they and their lenders confronted the same issues of information and security. What follows focuses specifically on borrowing by venal officer corps on the one hand, and by provincial estates on the other. Both borrowed important sums of money for the Crown, acting as guarantors of those debts and servicing their subsequent obligations with either gages paid or revenues granted by the Crown. Both types of corps agreed to act as financial intermediaries for the Crown in order to prevent changes in their privileged status. Yet important differences separated the two as well. Both offered assurances to their lenders, but they did so in ways specific to their corporate characteristics. When venal officer corps borrowed for the Crown, they mortgaged their offices and the increased gages that were the personal property of their members. For example, when the officeholding members of the Bureau des Finances in Rouen sought a loan from the dean of the Rouennais Parlement, they agreed to pledge as collateral not only the office of Treasurer of France, which they were repurchasing and merging into their corps, but also their individual offices.21 It was common practice for venal officer corps to stipulate that all members remain equally responsible for the timely payment of interest on rentes taken out in the name of the corps, an obligation extending to members who joined after the borrowing agreements were reached.22

l9 Louis-Lucas, Etude, vol. 2, p. 398. 20 Hoffln, Postel-Vinay, andRosenthal ('Private Credit Markets," p. 299) group nobles and officers

into a single category in their study of Parisian borrowers and lenders. Comprising only 9 percent of the Parisian population, these groups made up 64 percent of the private borrowers from 1730 to 1788 and borrowed 85 percent of the money on the market in those years.

21 A.D.S.M., C 2297. 22 See, for example, the deliberations of the parlementaires of Rouen that mention loans taken out "in

collective name and in solidarity" among all the members. A.D.S.M., 1 B 226.



608 Potter

Such mortgages, though, were only as secure as the property rights over the collateral; and as semipublic property, offices remained a risky pledge. Most notably, the Crown held final say over the heritability of offices. The ministries of Richelieu and Mazarin had used that leverage to gain political concessions from officeholders earlier in the century, a strategy that ulti- mately backfired and resulted in conflict. After assuming personal rule, Louis XIV showed greater respect for the patrimonial possession of offlcs than had his predecessors. Negotiations over succession rights had by his reign become transparent and predictable, with few important offices ever reverting back to the Crown for resale.23 In more ways than one, Louis showed himself to be interested in facilitating the mortgaging of offices.

In theory, therefore, loans to venal officer corps were safe investments for which lenders had legal recourse in the event of default. Indeed, the high credit risk for which the Crown was at this point well known was, in these cases, transferred from lenders to the officeholders. These offices-legally considered the holder's real property-as well as the income accruing from them, guaranteed the loans, leaving officers in the position of having to service their debts with their own savings whenever the Crown was late in paying their gages. Indeed, in 1709, in the midst of the War of the Spanish Succession and a severe harvest shortfall, the Crown fell into arrears in its gages payments to officeholders for the first time since the 1 640s. Unlike the king, venal officer corps were legally bound to uphold their own contractual commitnents, and they thus had to search for alternative revenue sources to service their debts. Reception fees levied against new officeholders were an alternate revenue source at this point, but by raising the costs to newcomers they made offices a less attractive investment.24

Provincial estates, on the other hand, did not pledge properties as collateral for their loans. Instead, they usually mortgaged Crown-granted revenue streams. The Estates of Burgundy, for example, typically secured their loans with revenues from the octrois de la Saone (tolls on goods shipped along the Saone river) and the crues de sel (taxes on the consumption of salt), the rights to which they held over determinate periods. Like mortgages on venal offices, these loans were only as secure as the Estates' hold over the revenues. Since the Crown was the original grantor of the earmarked revenues, it could, and in fact did, try on several occasions to redirect them for its own benefit. Each time, though, the Estates appealed for the maintenance of their reputation, and in fact they almost always succeeded in preserving control over the revenues. The Estates also vigorously supervised the accounts oftax farners who leased the rights to collect these taxes and pursued delinquent

23 Potter, "Institutions," chap. 2. 24 Doyle, Venality, pp. 52-53,71. Bien ("Secretaires," p. 163) reports that as of 1711, the secr taires

du roi of the Grande Chancellerie in Paris were owed 1.8 million livres in unpaid gages.




lessees to the point of condemning some to debtor's jail.25 Commercial slumps caused the earmarked revenues to diminish, as in 1691 when the returns from the crues de sel fell short of the obligations funded by them. Concerned about their credit and "4not wanting their lenders to suffer any harm," the Estates opted not to reschedule their debt and instead ordered their administrators to raise the necessary sums from other sources. The Estates thus understood the importance of the guarantee they had extended to their creditors, and they appear to have had the discretionary authority to make up at least slight and occasional shortfalls.26

Another important characteristic distinguished the intermediation of estates and venal officer corps. Because all borrowed with perpetual rentes, none were legally required to repay principal. But whereas venal officer corps did in fact pay only the interest on their debts, the Estates of Burgundy used their revenues also to reimburse principal, in accordance with an informal schedule. This practice likely reassured lenders since the Estates offered no tangible assets on which lenders could foreclose. Does this suggest that loans to venal officer corps were safer investments than loans to provincial estates, since specific assets backed them? Or was it overbalanced by the Burgundian Estates' self-imposed reimbursement schedule? The available evidence on who lent to these different corps will speak to these questions.

THE DATASET

Two primary data series offer comparative insight into how privileged corps pieced together their lending clienteles. The first ofthese series brings together the individuals and organizations lending to the Estates of Bur- gundy. The second consists of lenders to various venal officer corps in both Upper Normandy (the generalite of Rouen) and Burgundy, along with lenders to the Burgundian municipality of Dijon.27 The sources of these data are detailed in the Appendix. The first series contains evidence on all 5,756 rente contracts issued by the Estates of Burgundy between 1681 and 1715, totaling 34,308,852 livres. The second series, comprising 647 contracts

25 A.D.C.O., C 5366-5367. 26 A.D.C.O., C 3018, Decree of the Estates, 1691. 27 The municipality of Dijon was a territorial corps like the Estates of Burgundy. I have grouped its

borrowing records with those of venal officer corps, though, because it borrowed much of its fumds in the same manner as officer corps, offering newly merged offices as collateral and paying the interest on its loans with gages from those offices. When the town borrowed 26,400 livres to repurchase and merge the offices of colonel, major, captain, and lieutenant ofthe bourgeois guard in 1694, for example, those offices were offered as the primary collateral, and in addition lenders were given rights to claim the "fumds and revenues, both patrimonial and Crown granted of the said town" in case of default. This is very similar to the venal officer corps's practice of offering their newly united offices as collateral in addition to pledging shared responsibility and to offering up their individual offices as further collateral. A.M.D., M 26.



610 Potter

totaling 2,671,877 livres, captures the borrowing of a sample of venal officer corps within the two regions during this same period. My sources for this latter series do not include some prominent corps in both Rouen and Dijon. Nevertheless the sample is large enough, and covers enough corps in both regions, to serve as a representative cross-section of the borrowing undertaken by provincial venal officer corps in this period. (See the Appendix for further explanation). Both data series contain information on certain social indicators of lenders, including their titles, professions, residences, and gender, permitting cross-series and longitudinal comparisons of the makeup of the lending clienteles. (Using these series to compare total borrowing volume would be misleading, though, since only the first is all-inclusive.)

Finally, I have compiled a third data series comprising lenders to individual officeholders in Upper Normandy who borrowed to purchase increases in their gages.28 I will use this third series to study borrowing over time by individual officeholders, but it is less useful in providing social information on lenders.29

EVOLVING PATTERNS OF BORROWING

Examining the changing levels of borrowing over this period presents some surprises. Table I shows that the borrowing activity of the Estates of Burgundy grew steadily over the last decades of Louis XIV's reign, increasing from about 1.5 million livres borrowed during the five years between 1681 to 1685 to over 10.5 million livres during the last five years of his reign. The sevenfold nominal increase in borrowing (fivefold, if adjusted for the changing silver content of the livre) over this period corresponds to the growing role of the Burgundian Estates as a financial intermediary for the Crown. Their importance as a source of extraordinary finance increased significantly during the War of the Spanish Succession, reaching new heights in 1710 when the Estates agreed to repurchase various edicts and the capitation tax for 1 and 2.4 million livres, respectively.30

Borrowing by both venal officer corps and individual officeholders also increased over this period (see Tables 2 and 3). Both data sets show significant increases over the final 15 to 20 years of Louis's reign, roughly during the War of the Spanish Succession. This expansion in borrowing came just

28 This data series includes 148 contracts, totaling 473,292 livres, from the same time period as the others. The sources for this series are the same as for the second. (See the Appendix.)

29 Thanlcs to their more informative sources, Hoffnan, Postel-Vinay, and Rosenthal ("What Do Notaries?") can likely better address this sector of the private credit market.

30 Not all of the 34.3 million livres that the Estates borrowed between 1681 and 1715 was for payment of ordinary and extraordinary obligations. Some of the loans, especially during the last years of Louis's reign, were raised to refinance outstanding debt at lower rates. These figures thus do not reflect changing debt levels, but rather the sum of all credit contracts undertaken by the Estates. Figures for the changing silver content of the livre can be found in Goubert, Beauvais, vol. 1, pp. 396-400.




TABLE 1 BORROWING BY THE ESTATES OF BURGUNDY

Total Value (livres)

Quinquennium Number of Contracts Nominal Reala Average Value (livres)

1681-1685 251 1,546,964 1,546,964 6,163.2 1686-1690 232 1,929,300 1,867,562 8,315.9 1691-1695 587 2,961,221 2,555,534 5,044.7 1696-1700 684 4,121,260 3,367,069 6,025.2 1701-1705 1,068 5,345,142 4,302,839 5,004.8 1706-1710 1,663 7,814,693 6,103,275 4,699.2 1711-1715 1,271 10,590,272 7,667,358 8,332.2 Total 5,756 34,308,852 27,410,601 5,960.5 a Real values are calculated relative to the silver content of the livre in 1681 through 1685. Sources: See the Appendix.

as constraints on it were hardening. Louis's reign coincided with a long period of stagnation, punctuated by occasional crises in the private credit market. Frequent monetary and interest-rate manipulations in particular hampered the growth of credit. According to recent studies based on notarial contracts, nominal levels of indebtedness in the Parisian market were fairly stable between 1662 and 1715, increasing only modestly in the last decade of this period from roughly 170 million to 200 million livres. The doubling of credit activity by venal officer corps within the same time frame, and the even greater increase in borrowing by individual officeholders, appears to have diverged significantly from the overall stagnation of the private credit market.31 These were also years when the payment of gages fell into arrears and thus could not be offered as firm collateral. Several venal officer corps, still under pressure to meet their obligations to the Crown, advertised quite forcefully their difficulties finding lenders.32

Thus, contrary to William Doyle's assertion that the Crown' s 1709 default on gages payments signaled the end of venality as a major source of finance for the War of the Spanish Succession, royal pressure on officeholders to mediate extraordinary finances drove a steady and swift expansion of their borrowing.33 Furthermore, only a small portion of the borrowing by venal officer corps and individuals detailed in these data represents refinancing.34

31 True, the Parisian private capital market in this period might not be an entirely neutral basis for gauging the activity of venal officer corps: the two trends may lhave been inversely correlated as the massive build-up of government debt between roughly 1702 anid 1714 drew capital away from private borrowers.

32 Hofihnan, Postel-Vinay, and Rosenthal, "Redistribution," p. 260; Bien, "Secretaires," p. 163; Potter, "Institutions," chaps. 2 and 5; Doyle, Venality, pp. 37-38.

33 Compare Doyle, Venality, p. 52. 34 In 1714 the Chamber of Accounts of Dijon borrowed 149,081 livres at 4.16 percent to reimburse

loans which had been floated earlier at 5.55 percent, and the municipality of Dijon refimanced some of its debt contracts on only an irregular and infrequent basis to satisfy creditors' requests for reimbursement, even though it was under no legal obligation to do so (A.D.C.O, B 6 bis). The total borrowing activity of the Chamber of Accounts between 1682 and 1714 amounted to 1,287,479 livres. In 1695,



612 Potter

TABLE 2 SAMPLE OF BORROWING BY BURGUNDLAN AND ROUENNAIS OFFICER CORPS



1681-1685 16 117,889 117,889 7,368.1 1686-1690 28 113,350 109,723 4,048.2 1691-1695 84 377,250 325,567 4,491.1 1696-1700 24 64,370 52,590 2,682.1 1701-1705 134 597,128 480,688 4,456.2 1706-1710 190 581,459 454,119 3,060.3 1711-1715 171 820,431 593,992 4,797.8 Total 647 2,671,877 2,134,568 4,129.6

a Real values are calculated relative to the silver content of the livre in 1681 through 1685. Sources: See the Appendix.

Most loans represented new borrowing to satisfy new royal demands. Any precise quantification ofthe debts of venal officers would constitute a significant undertaking involving widely dispersed notarial documents. But we can infer from these data that the nominal debt level of venal officeholders, both as individuals and as corps, increased significantly in the final decades of Louis's reign, a time when private borrowing was stable.

CORPS-LENDER CONTACTS

Who were the lenders fueling this expansion in borrowing by the Estates of Burgundy and the various venal officer corps? To compare how these different types of privileged corps pieced together their finances, I have placed their creditors into three categories: corps members themselves and their relatives; other members of the local elite who likely had some professional or personal contact with the officers, or who at the very least shared their overall interests; and persons with no such apparent contacts or connections. This grouping permits us to measure the role of personal relations in fnance and the ability of corps to reach beyond their immediate associates in attracting investors.

Among those lending to the Estates of Burgundy, the first category includes: deputies and their families; agents ofthe Estates, including treasurers Chartraire (and their families) and collectors of the taille; and the Conde princes and their domestics or clients, who, as members of the most prominent political constituency inBurgundy, had close ties to the province's most prominent institution.35 The second category includes members of the pro-

the municipality of Dijon borrowed 12,570 livres from Jean Gault, treasurer of France in Burgundy, to reimburse the procurator Joseph Fallavier (A.M.D., M 24).

35 Several sources serve to identify deputies to the Estates. From archival records, I have assembled lists of all deputies who attended the meetings of 1694, 1702 and 1712. 1 have also assembled complete lists of e'lus and alcades, who were chosen from among the full deputation, for each triennality from




TABLE 3 SAMPLE OF BORROWING BY INDIVIDUAL ROUENNAIS OFFICERHOLDERS



1681-1685 8 17,400 17,400 2,175.0 1686-1690 14 22,170 21,460 1,583.6 1691-1695 16 29,600 25,545 1,850.0 1696-1700 27 78,283 63,957 2,899.4 1701-1705 22 99,549 80,137 4,525.0 1706-1710 43 104,495 81,611 2,430.1 1711-1715 18 121,795 88,180 6,766.4 Total 148 473,292 378,290 3,197.9 a Real values are calculated relative to the silver content of the livre in 1681 through 1685. Sources: See the Appendix.

vincial nobility and clergy along with town officials, who were not themselves deputies but who by virtue of their titles or positions were represented indirectly in the Estates. I have also included in this category Burgundian judicial and financial officers who, as members of the local elite, benefited from the Estates' protection of provincial privileges. This category thus represents individuals who, though not directly represented within the cham- bers ofthe Estates, nonetheless belonged to the rather close-knit landholding elite whose interests were served by their fellows in the Estates. The third, residual category includes lenders with no apparent contacts with the Estates, especially commoners and non-Burgundians.

Identifying individuals who held direct personal or professional contacts with venal officer corps is a simpler task: this category includes the officeholders themselves, along with their family members.36 For each corps, this circle of direct contacts was much more limited in scope than was the corresponding group attached to the Burgundian Estates, since there was no rota- tion of membership within venal officer corps as there was in the Estates. The category of lenders who held indirect ties to officer corps includes officers who belonged to other corps in the same province, along with members of the local nobility or clergy. Again, the lenders with no apparent contacts include mostly commoners and outsiders.

On the basis ofthese categories, some important distinctions can be drawn between the lenders to whom the Estates of Burgundy turned and those to whom venal officer corps turned as they sought funds to meet extraordinary royal demands (see Table 4). From 1681 to 1715 the Estates of Burgundy

1679 to 1718 (A.D.C.O., C 3018-3019, Registres des transcriptions des decrets des Etats). Finally, Beaune and Arbaumont (Noblesse, pp. 36-60) have published a list of deputies attending each of the meetings in the chamber of the Second Estate.

6 The sources usually indicated whenever lenders were themselves officeholders of the corps. I also used Arbaumont's Armorial to help identify family members of officers in the Chamber of Accounts in Dijon.



614 Potter

TABLE 4 LENDERS' CONTACTS WITH BORROWING CORPS, 1681-1715:

BY TYPE OF BORROWER

Number of Value Percentage Average Value Contact Type Contracts (livres) of Total (livres)

Estates of Burgundy

Direct 899 7,696,818 22.43 8,561.53 Indirect 2,714 13,368,102 38.96 4,925.61 None 2,143 13,243,932 38.60 6,180.09 Total 5,756 34,308,852 100 5,960.54

Venal Officer Corps

Direct 187 767,649 30.97 4,105.10 Indirect 225 1,013,122 40.87 4,502.76 None 183 697,882 28.16 3,813.56 Total 595 2,478,653 100 4,157.49

Sources: See the text.

borrowed between one-fifth and one-fourth of their funsds from individuals with direct contacts to that institution, slightly less than 40 percent from individuals with indirect contacts, and about the same amount from those with no apparent links. Venal officer corps, on the other hand, depended more on their professional and personal contacts to raise extraordinary funds. Almost one-third of the principal borrowed by officer corps came from individuals with direct personal contacts to those corps-a group much more circumscribed than the corresponding group for the Burgundian Es- tates.37 Individuals with indirect contacts lent slightly more than 40 percent of the total principal to the venal officer corps, and those with no obvious ties lent only 28 percent. Officer corps, then, appear to have depended more on the personal and professional contacts of their members to attract lenders than did the Estates of Burgundy.

The data suggest that geography played a role in piecing together lending clienteles, most notably in comparing the creditors of Burgundian and Nor- man officer corps. Here, the second data series presents some shortcomings: lenders to Norman officer corps are not nearly as well represented in this sample as are their Burgundian counterparts. Nonetheless, the figures in Table 5 suggest at least tentatively that there were differences in the borrowing patterns of the two groups of venal officer corps, with Burgundian corps depending to a much greater degree on personal and professional contacts to attract lenders. Rouen is relatively close to Paris, and members of that city's offlceholding elite likely had professional contacts with Parisian notables. My system of classification, however, would not capture such links

37 The social identity of the lender in 52 of the 647 contracts in this data series could not be found; the following calculations are based upon the remaining 595 contracts, totaling 2,478,653 livres in principal. See comments in the Appendix.




TABLE 5 LENDERS' CONTACTS WITH VENAL OFFICER CORPS, 1681-1715:

BY LOCATION OF CORPS

Number of Value Percentage Average Value Contact Type Contracts (livres) of Total (livres)

Burgundy

Direct 184 738,449 38.69 4,013.3 Indirect 204 716,922 37.56 3,514.3 None 147 453,436 23.75 3,084.6 Total 535 1,908,807 100 3,567.9

Normandy

Direct 4 29,200 5.12 7,300.0 Indirect 21 296,200 51.98 14,104.8 None 36 244,446 42.90 6,790.2 Total 61 569,846 100 9,341.7


within the credit networks. And in view of Normandy's prominent commercial sector, local merchants were likelier to have lent to officer corps there than in Burgundy. Again, merchants would not show up in my classification scheme as having informal ties to venal officer corps, though in the Rouen- nais case they shared space at the top of the local hierarchy, and they were surely well placed to make informed investments in venality.38 These facts suggest why the Rouennais were able to reach a wider clientele of lenders with no apparent personal or professional contacts.

The Rouennais case suggests that geography and socioeconomic struc- tures affected the makeup of lending clienteles. If we hold these factors constant by considering the borrowing patterns ofjust Burgundian corps, my argument that the Estates depended less on personal ties than did venal officer corps is actually strengthened. Whereas the Estates of Burgundy borrowed almost 40 percent of their funds from individuals and institutions with no clear personal or professional contacts, Burgundian officer corps could only fund about 24 percent of their borrowing from individuals across such informational barriers, and a full 38.7 percent came from individuals with direct ties to the corps.

Considering once more the two data sets in their entirety, if we examine borrowing patterns over time there appear again important differences between Es- tates and venal officer corps. I have divided both data series into two periods, 1681 to 1700 and 1701 to 1715. The first period includes about nine years of relative peace until 1689, then the Nine Years' War, and two or three years of peace thereafter. The second encompasses roughly the War of the Spanish Suc- cession and the last two years of Louis's reign, and coincides with the swift expansion of borrowing by both the Burgundian Estates and by venal officer corps.

38 Bardet, Rouen, p. 192.



616 Potter

TABLE 6 LENDERS' CONTACTS WITH BORROWING CORPS, 1681-1715:

BY PERIOD AND TYPE OF BORROWER

1681-1700 1701-1715

Number of Value Percentage Number of Value Percentage Contact Type Contracts (livres) of Total Contracts (livres) of Total

Estates of Burgundy Estates of Burgundy

Direct 281 1,968,867 18.7 618 5,727,951 24.1 Indirect 1,003 5,513,183 52.2 1,711 7,854,919 33.1 None 470 3,076,695 29.1 1,673 10,167,237 42.8 Total 1,754 10,558,745 100 4,002 23,750,107 100

Venal Officer Corps Venal Officer Corps

Direct 86 398,972 60.3 101 368,677 20.3 Indirect 38 137,777 20.8 187 875,345 48.2 None 24 125,143 18.9 159 572,739 31.5 Total 148 661,892 100 447 1,816,761 100


The Estates of Burgundy show slight change in their borrowing patterns across the two periods (see Table 6). There was a minor increase in the proportion of lenders with direct contacts, and a larger increase in that of lenders with no clear contacts at all, both at the expense of those with indirect contacts. Dependence on the local elite diminished as the Estates found that they could turn elsewhere to satisfy their growing demand for funds. Venal officer corps, on the other hand, saw greater change over these two periods. In the earlier period, less than one-fifth of their borrowings were from individuals with no contacts at all, and individuals with direct personal and professional contacts provided a striking 60 percent oftheir funds. Then in the later period, as demand for loans increased, the greatest expansion occurred in the proportion of funds provided by lenders with indirect links to the corps.

In the earlier period officers were in essence borrowing from themselves, or perhaps across generations within the same families, in order to finance the extraordinary transfers expected by the Crown. This peculiarity suggests much about venal officer corps as financial intermediaries. To begin with, they seemingly did not enjoy at this time the prestige and prominence needed to attract lenders in large numbers and instill confidence as guarantors of pubic debt. Yet at the same time, since the members of these corps were more or less borrowing from themselves (or from their families), there is no reason why they could not instead have lent directly to the king as individuals by purchasing augmentations de gages. That they chose instead to lend as corps suggests that collective action provided negotiating leverage that they would lack as individuals. Strength, therefore, appears to have




come from numbers and prominence: groups of notables sharing a set of functions and privileges held stronger bargaining positions vis-'a-vis the Crown than did individual notables. The threat of an uncooperative parlement or chamber of accounts surely instilled greater royal commitment to meeting gages obligations than the lesser threat of disgruntled individual magistrates here and there. The changes that we see in the later period, then, came as the Crown called upon offlcer corps to borrow more to help meet the costs of the War of the Spanish Succession. Members of officer corps apparently were unable to provide the extra funds themselves; most of the financing came from fellow members of the local e'lite.

The Estates of Burgundy, by contrast, were better able to attract lenders outside their immediate circle. On average, people were also willing to lend greater sums to the Estates.39 What accounts for this success in piecing together a wider clientele of lenders? One possible explanation is the interest rates that the different types of corps paid their creditors. If the Estates paid higher rates than venal officer corps, then the significance of their broader lending clientele would be diminished. We could simply argue that the Es- tates attracted investors from afar (both socially and geographically speak- ing) by virtue of the greater returns on their bonds. The data, though, do not support such an argument.

Figure 1 shows that the Estates paid 5.55 percent on their bonds during wars, and 5 percent in peacetime. Venal officer corps did not leave such thorough records of their debt management, so it is more difficult to recon- struct the rates they paid. Records from the Dijon Chamber of Accounts mention paying a rate of 5.55 percent on loans floated in 1702 and 1705, as did the municipality of Dijon on loans floated in 1694 and 1704. Then, following the Crown's lead, the Chamber of Accounts reduced the rates on almost all its rentes to between 4.166 percent and 4.55 percent in 1713 and 1714. Only during these few years was there any divergence between the rates paid by the Estates and those paid by other Burgundian corps, and by then the Estates' success in attracting creditors was already well established. By 1717 virtually all corporate intermediaries were following the trends of the private credit market and reducing rates in the midst of the Law Affair.40

If interest-rate differentials do not explain the Estates' relative success in reaching beyond local notables for finance, then the answer must lie in the greater security they offered. But the question remains: How were they able to offer such assurances? We can begin by eliminating some explanations that the evidence does not support.

Mortgage laws offering legal recourse to lenders in case of default fail to explain why lenders were attracted to the Estates. Mortgage laws provided

39 Likewise, venal officer corps were able to raise larger loans than were individual venal officeholders. 40 HoffmIan, Postel-Vinay, and Rosenthal, "Redistribution," p. 261.



618 Potter

no concrete assurances to the Estates' creditors that they did not also extend to the officer corps's. If anything, the reverse is true, since lenders to officer corps enjoyed liens on specific assets for the life of their perpetual rentes, while the Estates offered no such specific collateral.

Nor can we argue, as Daniel Dessert does in the case of individual financiers and moneyhandlers, that a more politically influential clientele of lenders made the bonds of the Burgundian Estates less likely victims of royal default.4" Examining those lenders without apparent contacts with the Estates suggests otherwise. Only about 26 percent of funds from outside the Bur- gundian elite came from judicial or financial officers, 14 percent from the sword nobility, and 6 percent from the clergy; thus less than half of all "outside" funds came flom elite groups well placed to defend their interests. Women, both widowed and unmarried, meanwhile, provided almost one- fourth of these fumds, and bourgeois, merchants, and professionals provided about one-fifth (see Tables 7 and 8). Therefore, if the presence of powerful notables as creditors explains the relative attractiveness of the Estates and their ability to piece together a broader clientele of lenders, it must have been those elite individuals with personal or professional ties, either direct or indirect, who offered such assurances.

The Jlus, who managed the financial affairs of the province while the Estates were out of session, expressed a preference for Burgundians over non-Burgundians as lenders, but this was not part of any strategy to assure the good standing of their rentes. Rather, they were interested in assuring that locals, regardless of their status or political position, benefited from the relatively secure investmnent opportunities already made available by the Estates. While the elus actively sought certain types of lenders, it was not with the express purpose of recruiting politically prominent investors.42

Furthermore, the close-knit nature of the privileged elite, especially in a provincial capital such as Dijon, which was known more as an administrative than a commercial center, undermines this "prominent clientele" argument. Members of the elite with direct or indirect ties to the Estates of Burgundy also held direct or indirect ties with many of the venal officer corps of that province, and many prominent Burgundians lent to both the Estates and to the local officer corps.43 The local elite lending to the Estates was not distinct from the elite lending to officer corps, and it is unlikely that

41 Dessert, Argent, p. 366. 421 In 1713 the e'lus reimbursed 422,257 livres to Lyonnais creditors with principal borrowed from

Burgundians. In their deliberations, they recognized "that it is to the advantage of individuals from this province to be able to invest their money in rentes on the Estates in the place of those who are not natives of the province." A.D.C.O., C 4562.

43 Jean Baptiste Canabelin and Andrd Bernard Bernardon, both maitres des comptes in the Chamber of Accounts of Dijon, lent extensively both to their own corps and to the Estates. And Fran9ois Char- traire de Biere, treasurer of the Estates, held a number of the Estates' rentes, and he lent 6,300 livres to the municipality of Dijon in 1706.




TABLE 7 LENDERS TO ESTATES WITH NO CLEAR CONTACTS, BY TYPE

Type Number of Contracts Value (livres)

Venal Officersa 329 3,485,646 Noblesb 239 1,848,057 Clergy 46 811,897 WomenC 605 3,157,253 Charitiesd 101 442,550 BourgeoiSe 697 2,888,048 Tradesmenf 95 218,015 Children 31 392,466 Total 2,143 13,243,932

a Includes secretaires du roi; maitres des comptes in Dole; Parisian magistrates; Lyonnais officers; and parlementaires from Metz. b Includes military officers and titled nobles holding no office. c Widowed and single. d Includes Pauvres de l'Hopital St. Anne de Dijon, Pauvres Malades de Chalons, and others. e Includes merchants surgeons, lawyers, architects, doctors, and notaries. I Includes craftsmen, bakers, apothecaries, printers, valets de chambre, and domestics. Sources: See the text.

they assured the safety of the former's debts while not also assuring that of the latter.

A related argument might point to the Conde princes as responsible for assuring the safety of the Burgundian Estates' debt, not by virtue of holding the debt themselves (Prince Louis III de Bourbon, for example, purchased only two rentes during this period, both in 1696 for a total of 40,000 livres) but by virtue of their role as provincial patrons. This argument has two prob- lems. First, the Conde princes were also the political patrons of such key Burgundian corporations as the Parlement and the Dijon Chamber of Ac- counts. Had they enhanced the financial independence of the Estates, we would also expect them to have enhanced the financial independence of the offilcer corps as well, thereby strengthening their ability to attract lenders. But this was clearly not the case. Secondly, the political prominence of the Conde princes within Burgundy declined after 1740, yet the Estates still attracted a wide network of lenders, indeed even wider than under Louis XIV.4

As already suggested, reputation (credit) was particularly important for private borrowers given the lack of public information on mortgaged hold- ings. Because oftheir semipublic nature and their relative prominence, privileged corps could likely count on their reputations surpassing in prominence and visibility those of most private borrowers. If the Estates' bonds carried interest rates no more attractive than those paid by venal officer corps, if mortgage laws did not make them safer, and if the political prominence of

I Kettering, Patrons, pp. 91-94; and Potter and Rosenthal, "Politics," pp. 594-611.



620 Potter

TABLE 8 LENDERS TO OFFICER CORPS WITH NO CLEAR CONTACTS, BY TYPE

Type Number of Contracts Value (livres)

Venal Officersa 5 66,100 NobleSb 8 116,465 Clergy 1 1,000 Women' 93 273,799 Institutionsd 32 66,100 Bourgeoise 39 170,118 Tradesmen' 5 4,300 Total 183 697,882

a Magistrates and financial officers from other provinces. b Titled and military, from other provinces. c Widowed and single. d Charitable and Religious.

Includes merchants surgeons, lawyers, architects, doctors, and notaries. Includes craftsmen, bakers, apothecaries, printers, valets de chambre, and domestics.


lenders or patrons did not serve to provide explicit assurances, then a wide reputation for responsible borrowing must have been key to the Estates in attracting a large network of lenders. It remains to understand how such a reputation could have developed.

The Estates approached their role of financial intermediary with much vigor, insisting on independent control of the revenues by which they serviced their debt. Their ability to protect the integrity of mortgaged revenues, even when confronted by a Crown ready to redirect them, and their resulting ability to adhere to their schedule of reimbursements surely attracted investors leery of lending in an era marked by frequent interest-rate changes and monetary manipulations. In such an environment, the Estates' creditors held a distinct advantage in that they could always count on recovering their principal in the near future. The average duration of the Estates' loans was about five years through the 1680s and 1690s, increasing to about eight years the following decade and to ten years in the 171 Os. Their policy of regular reimbursement enhanced liquidity and offered a greater range of options to bondholders. Upon reimbursement lenders could always shift their assets elsewhere; more often, though, they opted to roll their money over into newly issued rentes.45

By contrast, the gages paid to venal officers only allowed for interest payments to their lenders. There was no systematic attempt by venal officer corps regularly to reimburse their creditors. Indeed, they did not have the financial wherewithal to do so other than by seeking funds from members' own savings or personal credit networks. Thus, lenders to venal officer corps faced a secondary market where the capital value of their investnents was far from assured.

45 Potter and Rosenthal, "Politics," pp. 592-94.




There were thus real advantages to lending money to the Estates. Of perhaps even greater importance, merely adhering to their reimbursement schedule surely enhanced the Estates' reputation as credible borrowers. While the Estates never offered their creditors a formal commitment to adhere to a fixed schedule of debt management, lenders knew which future revenues were earmarked for their reimbursement. The Estates, for their part, understood the importance of publicizing their intent and sticking to their promises in order to enhance their reputation among potential lenders. We have already seen the Estates' concern in 1691 when a commercial slump threatened their reimbursement schedule. This vigilant attitude lasted as long as the Estates were in the business of guaranteeing public debt. In deliberations toward the end of the eighteenth century, administrators of the Estates admitted that timely reimbursement was a matter of "wise adminis- tration" which would prove "useful when [they] borrow again." Only a strong hold over their mortgaged revenues made such a strategy possible.46

Political differences, then, namely the Estates' ability to manage inde- pendently their debt with locally controlled revenues, explain their success in assuring investors and thereby piecing together a wide clientele of lenders. Venal officer corps, meanwhile, depended on the Crown's timely payment of gages merely to pay the interest on their debts; failing that, only by virtue of the officers' personal solvency could timely interest payments be made. The Estates of Burgundy bulked larger than most venal officer corps in terms of the size of their deputation, their jurisdictional reach, and the funds under their control. Sheer size surely helped the Estates protect their reputation. They also had the experience of handling royal funds, and they were therefore well placed to assert control over mortgaged revenues and manage their debt without interference from the Crown.47

It would be mistaken, however, to dismiss venal officer corps as politically irrelevant during this period. My findings suggest that as individual corps they did not enjoy the financial autonomy and the political strength that characterized provincial estates. Yet taken together, the countless number of venal officer corps across the kingdom mediated considerably more debt for the Crown than did the handful of provincial estates. No single venal officer corps rivaled the Burgundian Estates in terms of financial autonomy and effective mediation, but venality as a whole proved a crucial source of extraordinary funds for Louis XIV, and the extent of its spread during these decades carried with it long-term political costs just as great for the Crown as the concentration of power in the provincial estates.

46A.D.C.O., C 4569, 18 February 1773. The full statement from the Estates' deliberations is quoted in Potter and Rosenthal, "Politics," p. 589.

47 If indeed size mattered in effectively mediating finances for the Crown, then the kingdom-wide corps of secretaires du roi upon which Bien bases many of his conclusions may not be entirely representative ofvenal officer corps in general. See "Secre'taires" and "Manufacturing Nobles," pp. 445-86.



622 Potter

CONCLUSION

There were indeed significant political costs associated with Louis XIV's strategy of war finance, namely the shift in power toward particular corps that was necessary in order to reduce their borrowing costs. Because ofthese political perils, this strategy remained limited in both scope and time. Exist- ing provincial Estates, especially those in larger provinces such as Langue- doc and Brittany, not to mention Burgundy, proved indispensable for their ability to borrow large sums for the Crown. Yet despite their effectiveness in providing financial support, the Crown made no moves to create new bodies capable of mediating finances in the same way.48

Louis did however create waves of new offices, tapping the personal wealth of elites and aspirants, and engaging venal officer corps to borrow for his war efforts. Yet even this expansion was largely limited to Louis's own reign, slowing to a halt after 1715 and reversing itself under the Regency.49 Never again would venality prove such an important source of war finance. Meanwhile, existing provincial estates continued to provide extraordinary payments to the Crown right up to the Revolution, but their intermediation was increasingly overshadowed by the Crown's recourse to direct solicitation of loans as its primary source of extraordinary finance.

The unwillingness of Louis's successors to embrace his financial strategy-along with its political implications-highlights what is probably the most fundamental difference distinguishing French public finance from that of her maritime rivals. Leaving aside this exceptional interlude of the latter half of Louis's reign, during the Age of Absolutism the French Crown re- fused to share financial authority with, or even to disclose financial matters to, lesser members of the elite.50 The financial intermediation undertaken by privileged corps thus never amounted to the sovereign command over revenues and debt management enjoyed by the Dutch States as early as the sixteenth century, and by the English Parliament after 1688. Whereas the authority of those political bodies developed largely unbeholden to royal authority, in France the prerogatives of provincial estates and venal officer corps alike derived from the Crown.5" Indeed, the very privileges by which

48 Beik, Absolutism, pp. 245-78; Collins, Classes, pp. 218-26. 49 The capital value ofvenal offices was rolled back from 1.120 billion livres in 1715 to approximately 750

million in 1722, and had recovered only to about 850 million by 1789. See Doyle, Venality, pp. 55-60. 50 Louis XVI rejected all attempts by the Assembly of Notables in 1787 to establish a financial

oversight committee. Proposals put forth that same year for the creation of provincial assemblies met with less royal intransigence. These assemblies, though, were envisioned as having very limited powers restricted to the administrative realms of tax partitioning and collecting. See Egret, French Prerevolu- tion, pp. 31-35, 64-71.

51 While the Spanish Crown was initially instrumental in creating a funded debt under the States of Holland, the long history ofpolitical decentralization inthe Low Countries enhanced the degree of local financial autonomy early on. Once the "novel expedients" of 1542 created a funded debt for the first time, the royal government thereafter played a diminishing role in managing that debt and in authoriz-




these French corps existed and which made possible their financial mediation were conferred by, and thus dependent upon, the Crown. Louis did not merely choose a financial strategy that made use of existing arrangements. As king, he was the source of much of the power and authority that he ceded to privileged corps, in particular to provincial estates, in return for their good offices.

Some revision of our understanding of the early modem financial revolution is thus in order. Elements of the financial revolution were certainly present in absolutist France, most strikingly in the intermediation by the provincial estates. A representative body assumed responsibility for managing debt; earmarked revenues backed long-term loans; lenders came forth voluntarily. The result was a market for public bonds known to be more secure than the king's own bonds, and which therefore secured funds at much lower rates.

We are left with a rather mixed view of French finances under Louis XIV. Certain "modern" features associated with a financial revolution developed atop certain "traditional" elements of absolutism. These developments do not amount to a "revolution," not least because of the reversal after 1715. Yet they are important for breaking down the constitutionalism-absolutism dichotomy embedded in the literature on the financial revolution. While this fimancially effective yet politically costly arrangement did not win out in the end, that was due more to policy decisions by Louis's successors than to constitutional shortcomings. And while they never took on the importance of Dutch States or the British Parliament, it is important to note that provincial estates continued to manage their gradually increasing debt loads throughout the eighteenth century. Absolutism, in fact, was more flexible and capable of tapping, indeed of promoting, markets for credit than the traditional model of the financial revolution suggests.

Appendix: Data Sources

The first data series come from very detailed records compiled by the Estates of Bur-

gundy to track each rente floated.52 Scribes registered lenders' names and usually their occupations, residences, and titles. They also listed the amounts lent and the interest payments due annually. If holders ofthese rentes sold them on the secondary market before the Estates reimbursed their principal, the new purchasers were indicated. And for most contracts, the date of reimbursement was later marked in the margin.

Several sources provided data for the second series. The Bureau des Finances in Rouen gathered copies of quittances des finances for all offices in the generalite of Rouen and

ing future loans. Charles V essentially helped create the conditions for permanently placing the provinces of the Low Countries in a financially advantageous position. See Tracy, Financial Revolution,

pp. 34-35, 97. 52 A.D.C.O., C 4577-4584.



624 Potter

compiled them in registers.53 These were the receipts drawn up each time an individual officeholder or an officer corps purchased a new office or acquired an augmentation de gages. If the purchaser borrowed any or all of the capital, the treasurers writing the quittances listed from whom the funds were borrowed. From these four registers, I have ex- tracted evidence of borrowing by numerous officer corps, including the Bureau des Fi- nances itself, various e'lcttions and bailiwicks of the ge'ne'ralitct, the Cour des Aides Comptes et Finances, along with various corps of administrative officers such as the com- munity of 48 salt porters of Rouen or the wood millers of the same town.54

Members of the Dijon Chamber of Accounts drew up a list in 1713 of all its creditors, indicating the dates of the loans; and the municipality of Dijon retained copies of the notarial acts by which it borrowed funds for repurchases of offices and other extraordinary purposes." Also, registers compiled by the Chamber of Accounts which contain letters of provision and some quittances des finances for Burgundian offices include quittances that indicate the lenders to various bailiwicks of the province.56

Finally, the data on lenders to individual offlceholders in Upper Normandy came from the same registers of quittances compiled by the Bureau des Finances in Rouen that provided data on lenders to venal officer corps.

There are two potential weaknesses in the second data series, on which much of my argument depends: the limited number of contracts on which it is based relative to the first data set, and the greater proportion of contracts for which social indicators remain un- known. Most ofthese shortcomings stem from the Rouennais sources; data from Burgundy on the borrowing activity of the Chamber of Accounts and the municipality of Dijon are complete for the periods indicated, and they are much more inclusive of information on social indicators. Of the 52 contracts in this second series that I have tagged as problematic, only 14 come from Burgundian sources (comprising less than 1 percent of the Burgundian contracts in this series).

53 A.D.S.M., C 1370-1373. 54 Series P in the National Archives contains scores of registers of quittances desfinances for offices

throughout the kingdom and would therefore provide much the same information on a wider scale. Indeed, a comprehensive history of the financial aspect of venal offices under Louis XIV could be. written largely from this series. The registers of the Bureau des Finances in Rouen, however, offer the advantage of focus, since they detail the transactions of one specifclc gennralitj.

55 A.D.C.O., B 6 bis; A.M.D., M 24, 26-27. 56 A.D.C.O., B 53-61, Enregistrements de la Chambre des Comptes.

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