Revolutions - 3.4- Necker and the Necklace

Episode Date: August 10, 2014

Just as the financial situation was about to explode the monarchy was hit by a public relations nightmare.

and welcome to revolutions. Episode 3.4, Necker and the Necklace. Last week, we talked about the efforts of successive royal ministries in the early 1770s to reform some of the more glaring problems with the ASEAN regime, and we saw how those efforts were frustrated by those who stood to lose the most from reform, whether they be aristocrats who weren't about to let their privileges be ignored, or peasants who weren't about to let free market experiments literally take bread off their table. With the failure of those reforms, the ministries of the late 1770s and early 1780s

took a slightly different approach to solving France's problems. And though it would be an unfair exaggeration to say that that approach was, hey, let's pretend like nothing's wrong, as you'll see, that unfair exaggeration is not too far off the mark. Once we get done talking about that, we're going to switch gears and trace the steadily declining reputation of Queen Marie Antoinette, because that steadily declining reputation finally cursed splatted for good, just as the hey, nothing's wrong attitude was blowing up in the monarchy's face. So we left off with the ousting of the physiocrat reformer Tergoe in May 1776. As his reform package of spending cuts in the palace and free market economics out in the provinces

left him with a list of enemies a mile long, it wasn't hard to see that Tergoe would soon be on his way out the door. So, as the controller general's influence waned, one man positioned himself as the best and frankly only candidate to replace him, Jacques Nacare. After Tergo got the boot, it would take the king's advisors a good six months to get Nekhear elevated into the ministry, but when he was finally brought on board, everyone was convinced that he would be able to lead the royal treasury out of danger and into the promised land of permanent solvency. Now, one of the reasons it took a little while to get Nacare into the ministry, was that he had three pretty big strikes against him.

He was a commoner, he was Swiss, and he was a Protestant. Any one of those alone would have made him suspect to the inner circles of Versailles. Combined, they would have torpedoed a lesser candidate. But Nacare was no lesser candidate. He was widely viewed as a financial genius who had the answers to all of France's problems. Born in Geneva in 1732, Nacare had been sent to Paris at the tender age of 15 to work as a bank clerk for an uncle. It became apparent immediately that an aptitude for banking didn't even begin to describe his talents. He worked his way quickly up the ranks and was made a full partner in his uncle's bank just after turning 30.

Now a wealthy young superstar in the world of finance, Nekhear founded his own bank and made even more money lending to the royal treasury and speculating in the grain trade. Around this same time, he got involved with a wealthy widow, but when said wealthy widow brought around a pretty Swiss girl named Suzanne Kerr fell in love with Suzanne, and dropped, said wealthy widow. Interesting side note is that Suzanne had previously been engaged to none other than Edward Gibbon, but the engagement was broken off when she took up with Nakar. The couple was married and then had a daughter in 1766 named Germain, who Madame Nekir raised on the educational theories of Rousseau, and when she grew up, Germain became a literary celebrity in her own right as Madame de Staal, who waged a ceaseless

intellectual war against Napoleon, but now I'm starting to drift off topic. With the assistance and or prodding of his wife, Nicar started aiming for government office. In the late 1760s, he was appointed director of the East India Company, which, like its British counterpart, was a privately chartered corporation that held a legal monopoly on the Indian trade markets. The company was failing badly from corruption and mismanagement, and despite his efforts to maintain its independence, the company was liquidated in 1769, and all its assets and debts were taken over by the crown. But this will not be the last we've seen of the East India Company. It will be reconstituted in 1785, and then be at the epicenter of a massive scandal in 1793 that was a big part of

explaining when and why the revolution began to eat its own children. So watch out for that. Returning to private business, the Nekhehr spent the next few years building up Jacques's reputation as a financial wizard. Madame Nacare hosted a well-attended salon that saw most prominent intellectuals and government officials pass through at one point or another. When Tergo took over as Comptroller General in 1774, Nekir started publishing economic tracks that attacked the physiocrat reforms, denouncing most especially the free trade in grain. So by the time Tergoe was driven from the ministry, it was well known that Nekere was sitting on a slate of ideas that ran in the opposite direction to the discredited policies of the physiocrats. Still, as I said, it took a few months to bring him in,

and even when he was brought in in October 1776, Nekar had to take a less prestigious post because Protestants were not allowed to hold a major office like controller general of finances. But whatever the title, Nekir was now more or less in charge of the royal treasury. Like everyone else these days, he could see that taxes, needed to be distributed a little more evenly across the three estates. But being a banker, Nacare was utterly convinced that actually raising taxes was unnecessary, and that the Royal Treasury would be best served by floating more loans. He was also in complete agreement with Mersian

about the benefits of France getting into the American war, and he scoffed at Turgot's complaints that they just couldn't afford it. We won't even have to raise taxes, he said. We can just finance the whole thing, and it'll be fine. Trust me, I'm a financial genius, remember? So I'll Offie went to raise the money, offering good rates and utterly self-confident assurances that the royal treasury was in great shape. On the strength of his personal reputation more than anything else, Nekhear got his loans. Even skeptics in the parliama only fought him a little bit on the first loan, and then started registering future requests without complaint. Now, trying to figure out exactly what Nekheir was up to here is a little tricky. And though I haven't got a good source on this, I would bet that he was interested in taking France in the direction of the British.

who, when they created the Bank of England back in 1694, more or less invented the idea of a permanent national debt serving as an engine for growth. As long as the interest is being paid, the state would always have a ready supply of cash. This would help explain NICARE's bookkeeping, without resorting to words like con artist, charlatan, and complete fraud, because NICARE started dividing royal expenditures up into two categories, ordinary expenses and extraordinary expenses. As the loans piled up to fund the American war, Nekir filed the interest on those loans as ordinary expenses. But he dumped the principal off into extraordinary expenses. He was happy to show anyone who asked the tally for the ordinary expenses,

and with those apparently in good order, no one thought to ask about the extraordinary expenses, which would have sent potential lenders running for the hills rather than happily handing over more money. The peak of Nekhear's power, popularity, and influence, at least on this first go-around in the ministry, came in February 1781 when he convinced the king to let him publish for the first time ever a complete accounting of the royal finances. The resulting Comptrandue was meant to silence all critics and put to rest any whispers that all was actually not well in the king's pocketbook. The Comptorandu was a bona fide sensation, as nearly every educated. man and woman in France wanted to get a look at the king's books. I mean, this was an unprecedented lifting of the veil. There were even mentions by later writers who were children at the time, that they literally learned how to read from the Comptorondeu. It was seriously that big of a deal.

And what did it show? It showed that the Royal Treasury had a 10 million livres surplus. But this was because the Comptorandu only dealt with those ordinary expenses, the regular cost of government, compared to the regular streams of revenue. But as I just said, things like, you know, the massive load of loans taken on to finance the war in America were just not even mentioned. Had they been, all France would have seen that the Treasury was actually running deep in the red. In the long run, the legacy of the Comptorandu was not just that it swept France's financial problems under the rug, but that it became impossible to believe Nacare's successors when they revealed that the king was not only broke,

he was catastrophically broke. I mean, how do you convince someone who literally learned how to read by flipping through the Comte Rondeu that in less than five years the monarchy had somehow gone belly up? There were guys who right up until the end just couldn't believe it and thought that Cologne was running some sort of shakedown operation when he presented his reform package to the Assembly of Notables in 1787. In the short term, though, the Comptor Rendu led directly to Nacare, getting himself kicked out of the ministry. Believing that he was now indispensable, he demanded that the king let him into the

inner circle of decision makers where he would resign. But like everyone in government, Nacare had his enemies, and they convinced the king not to bite. His bluff called, Nacare had to make good on his threat, and he resigned in May 1781. Though, critically for future events, his popularity with the public only grew as he was martyred by evil nobles who feared the influence of this commoner, the people of France had come to believe could do no wrong. Nacare was succeeded by a guy named Jean-François Jolie de Florey, who was far more conservative in his outlook, coming from a staunchly anti-enlightment family. He's not of major importance, and his name will not be on the test.

But he was the bridge between Nekir and Cologne, and so I have to mention that Floree took one look at the books and said, holy crap, we have got to raise taxes. And thanks to his long-standing conceding, connection to the parlamas, he was able to push through a third Vatiem that would run through 1786. But the additional money raised was only going to cover interest payments on all the previous loans. So just to keep going, Floree had to borrow even more money and then go back to selling venal offices, a practice that had been slowly ratcheted down by previous ministries.

Given what he had to work with, Floree's days were always numbered. I mean, how do you ask courtiers and ministers to cut back on spending and submit to new taxes when the Comptor-on-Due is sitting on their desk, telling them that everything is fine. He finally called it quits in March 1783, just as negotiations to end the American war were getting underway. Fleury was succeeded by a guy whose name will absolutely be on the test. Charles Alexandre de Calon. Because it will be Calon, who will spark the so-called pre-revolution, when he finally gives up

the ghost and says it's either major reforms or the kingdom collapses. Those are your options. Unfortunately, as we'll see, Calone was not a particularly good messenger for this dire warning, given his previous embrace of a little thing called useful splendor. So as we'll see next week, when it came time for major reform, there was major pushback. Cologne had been born in 1734 in Flanders into a respectable family of the Roeb nobility. He was trained as a lawyer and then slowly rose up through the political judicial ranks, serving in the Flanders Parlamas and then securing positions in the central bureaucracies,

and eventually rising up to be an intended. Along the way, he earned a reputation as a man far more interested in nailing down his next promotion than really doing the job that was in front of him, but he was savvy in business and at least clever enough to always land that next promotion when it became available. With the help of Foreign Minister Vergen, who was by now Louis's most trusted advisor, Cologne was brought in to serve as Comptroller General of Finances in November 1783, and he brought with him the rather novel idea that the best of the best of, way to get out of debt was to spend more money. Now this is crazy, of course, and it didn't work,

but Cologne did have a plan. Like his predecessors, Tercot and Nacare, Cologne believed that raising taxes was, at least for the moment, a political non-starter. His immediate predecessor, Florey had pushed the limits of the nobility's patience by initiating the third Vatiem. Anything more would require a concerted royal push that the ministry did not have the stomach for, especially since it might eventually involve recalling the estate's general, which was a surefire way to completely lose control of the situation. So Cologne decided that the only way out was to keep borrowing and hope that maybe in time new loans taken at lower rates would pay off the loans with higher rates, and then they could start getting ahead of this thing. So instead of cutting back spending at Versailles, Cologne conspicuously jacked it up. The idea being that if creditors saw that the monarchy was spending lavishly, they would be assured that the king was in good shape and see more royal loans as a safe investment.

And for a while it worked, as Cologne took out hundreds of millions of livres more in debt. But even the useful splendor was not enough to quiet doubts, and in December 1785, the Paris Parhamma balked at approving yet another loan, and they had to be marched as a group to Versailles and basically ordered by the king to approve it. and so they did. But as you might guess, spending your way out of debt turned out to be not a very good solution to the problem, especially when Cologne took to the books to survey the situation now that Flouris Vatiem was set to expire at the end of 1786. He was mortified to discover that the Crown was about to start running an annual deficit

of well over a hundred million livres, which was a full quarter of expected revenue, and it was only going to get worse as the interest started coming due for all the loans over the last few years. Once those started kicking in, something like half of all annual revenue was going to be going to debt servicing. This was a grind-the-wheels to a halt revelation.

Cologne realized that there could be no more tricks, no more kicking McCann down the road, the crisis everyone had been trying to avoid for the last decade was finally upon them. And so he retired to his offices and started drawing up a plan to completely overhaul the Crown's finances, a plan that would touch on almost every part of the ASEAN regime,

a plan that would ruffle every feather in the kingdom, and a plan that the king would not be able to implement by his own royal will. But we're going to leave the financial crisis there for the moment, on the eve of Cologne presenting his reform package to the king, because I want to close out today's episode by getting into a royal scandal that would break just as all of this financial stuff was coming to a head. It is a scandal too crazy to just breeze by without stop. to smell all the delicious details. Plus, it offers the perfect opportunity to talk a bit about

Marie Antoinette, who wound up losing whatever popularity she had left as a result of the scandal, even though, as we're about to see, she had nothing whatsoever to do with anything. So, let's talk about Marie Antoinette and the Diamond Necklace Affair. Marie Antoinette was born Maria Antonia in 1755 in Austria, the eighth child and youngest daughter of Maria Teresa and Francis I, who were Holy Roman Empress and Emperor, respectively, and in that order, Maria Teresa having inherited the throne from her father in 1740. Little Maria Antonia grew up in a fairly private and relaxed environment, and though she never took much to formal education, she excelled at singing and dancing and seems to have had a fairly happy childhood.

But it just so happened that she was born right as Europe was undergoing the diplomatic revolution of 1756, which we're going to talk about, I think, in two weeks when we pull back to survey the international scene within which the French Revolution is about to explode. The diplomatic revolution meant that Austria had a whole new set of partners it needed to cement alliances with, including its longtime enemy France. It looked for a while like Maria Antonia wouldn't be called upon to play a major role in the new alliance system, but smallpox took its toll on the Austrian royal family, and by the time she turned 12 in 1767, negotiations were underway with the French to marry her to the future Louis XVI, himself just 13 years old.

All the arrangements over the dowry and whatnot were finalized over the next few years. Maria Antonia was restyled Marie Antoinette and shipped over to the custody of the French royal family. where she and Louis were officially married in May 1770. Now, given that she was 14 and he was 15, and there was probably a roomful of people milling around, as was the weird royal custom, it is not surprising that the marriage was not consummated on the actual wedding night. But as the days, and then weeks and then years past,

the missing act of consummation became a mild concern, then a running joke, and then a downright threat to the Franco-Austrian alliance. Not that many in France were much concerned about that, though Marie herself was fairly popular in the early going, the alliance with Austria was most assuredly not. And that's up to and including Foreign Minister Virgin and King Louis himself, who both chafed under an alliance and marriage that had been arranged by their predecessors. So as the time passed and Marie Antoinette continued to be ignored by King Louis, who preferred

hunting and tinkering with locks, she took comfort with a small circle of friends and indulged in whatever frivolities happened to present themselves, shopping for clothes, gambling, horse racing, attention from discreet male admirers. She was, after all, basically still just a kid, and was only 18 years old when her husband descended to the throne, and she became Queen of France. This title bump changed little for her, though, including the constant barrage of letters from her mother berating her for not having betted the king yet. A harsh spotlight hit this failure of royal intimacy when the king's younger brother

had a son in 1775, and by now the gossipy underground press was having a field day, and there were rumors that Louis actually had a physical defect that eventually required surgery to fix, though that seems to have been just a rumor. Finally, in 1777, Marie's brother Joseph II, now Holy Roman Emperor, came to visit, and he was very much concerned about the state of the Franco-Austrian Alliance. After badgering the couple to do their duty, the king and queen finally went to bed. seven years after they were married. But Marie and Twinnett only enjoyed temporary relief from public mockery when their first child

turned out to be a daughter. But then, in October 1781, she gave birth to the son everyone had been waiting for the last 11 years. Unfortunately, as we will see, the new Dauphin, that is the crown prince, was a sickly kid, and he would die at just about the worst possible moment in the spring of 1789. A few years later, though, the royal couple had a third. second son, who would also come to a miserable end at the hands of the evil revolutionaries, and then in 1786, a second daughter, who would not live to see her first birthday.

Now, through all of this, Marie Antoinette continued to spend money, by property, pushed for her own favorites to be given offices and pensions and gifts, and her standing with the French public was not good at all. She was just too frivolous and extravagant and out of touch, and she took a constant beating in the press. But up until the diamond necklace affair, which we're about to talk about. She may have been the object of scorn and mockery, but it wasn't like she was hated. And what's hilarious is that the thing that really got her hated was something that she had nothing at all to do with. Okay, so, the diamond necklace affair. Here's how it goes. Way back in 1772, King Louis XIV, ordered an incredibly elaborate

diamond necklace from a Paris jeweler. It was meant to be a gift for his mistress, my Madame du Barry. But the piece was so complex that it was not completed by the time the king died, and Madame du Barry was kindly asked by the royal family to take a hike. The jewelers, now out the money they fronted to put the thing together, tried to sell it to Marie Antoinette in 1778, but she said no. It wasn't her style, and she wasn't too keen on Madame DuBerry herself, so why would she want to wear her jewelry? After failing to sell the piece of bra, the Jewelers again tried the queen in 1781, and again she said no. Okay, so far so good, there's a fancy necklace, the queen doesn't want it, simple. But here's where it starts to get complicated.

Along comes a con woman named Jean de la Mott, who was successfully passing herself off as a descendant of King Henry II. At some point in 1784, she and her husband, an army officer who was also passing himself off as a noble, set their sights on fleecing the rich and and hapless, and hopefully pronounced correctly, Cardinal de Rohan. Rohan was one of those wealthy aristocrats who made up the top level of the first estate, and he had once upon a time been ambassador to Austria. It was well known around town, though, that Rohan, A, wanted a new position in the government, and B, was currently being iced out by the queen,

who did not approve of Rohan reporting on her activities to her mother, while the cardinal was serving as ambassador to Austria. So our con woman, Jean, takes up with the good cardinal and convinces him that she's developed an intimate friendship with the queen. Bait, the gullible Rohan could not pass up. Jean agreed to start delivering flattering notes from the cardinal to the queen, and then return with the queen's replies, replies that were, of course, forged. These forged replies were apparently affection enough in tone that Rohan started thinking maybe he and the queen had like something special. So he begged Jean to arrange a meeting. No problem, says Jean, and goes off, and I'm not making this up,

to hire a prostitute who looked like the queen. On a moonlit night in the gardens of Versailles, Rohan and the fake prostitute queen met and promised to put all their bad blood behind them. Now, of course, while this is going on, John is routinely taking money from Rohan to invest in the queen's charity work, which is a nice running scam, but then along comes the jewelers with the huge diamond necklace they can't sell. They have just found out that Jean has got the queen's ear, and they offer her a

commission if she can get it sold. So in January 1785, Jean forges a request from the queen to have Ho Han buy it for her. It would be too unseemly for me to go buy it myself, you see. Jumping at the chance to serve the queen, the cardinal arranges with the jewelers to buy the thing for two million livres to be paid off in four installments. He then takes the necklace and hands it off to the Queen's valet, who is of course just some guy in cahoots with Jean and her husband. Rohan is now absolutely giddy with the fine work he's done, not even suspecting for a moment that the husband has just taken the necklace up to London, where he will strip it and start selling the diamonds off one by one.

Eventually, though, Rohan started to get nervous, and may be a little suspicious, when he noticed that the queen had not yet worn the necklace and still hadn't sent any of the money to pay out the jeweler by the time the first installment came due in August 1785. When the payment deadline arrives and Jean reveals to Raham that there's no money coming, the angry jeweler goes directly to the queen. And the queen says something along the lines of, I don't know anything about this, and why are we still talking about this necklace? So the king and queen drag in Rohan for an audience and demand an explanation. He tells them everything and shows the forged purchase order, which sends King Louis into convulsions because it's obviously a forgery.

It was signed Marie Antoinette of France, and as Rohan full well knew, the royalty only ever signed with their given names. Terminally pissed off. The king has Rohan thrown in the Bastille. And from there, the whole plot unraveled, and everyone connected is hauled into court. Jean, the prostitute lookalike, the forger, the husband in absentia since he's still up in London. The trials were a sensation, one of those trials of the century that come along every few years. But in a crazy twist, the public chose to sympathize with the defendants. Cardinal Rohan had been duped simply because he was too honest and eager.

The prostitute was an innocent girl sucked into a sordid world. Even Jean was painted as a sympathetic noblewoman down on her luck who had been driven by poverty to make bad choices. Everyone, it seemed, was given a pass except the queen. who somehow came off as a vindictive harpy who had purposefully set the whole thing in motion to destroy Rohan, abscond with some pretty necklace, while all the while engaging in some fairly graphically depicted sexual manipulations. And the actual judges appear to have picked through all of this well enough. Jean and her husband were convicted, the forger was exiled, Cardinal de Rohan was acquitted, and the queen was found completely innocent.

But in the all-important court of public opinion, the diamond necklace affair was devastating. to the queens, and by extension, the entire monarchy's reputation. And what was really damning was just how easy it was to believe that she was this rotten manipulative shrew, who was all too eager to destroy anyone who stood between her and some shiny things. It was a devastating public relations nightmare, from which she would not recover, especially because over the next few years she would not have an opportunity to recover. Things were about to go from bad to worse for the Ancian regime. And next week, the public will be hit with the great bombshell that had been kept hidden for so long. The royal treasury is exhausted, and unless drastic

measures are taken, the entire kingdom is going to implode.