Reminiscences of Prince Talleyrand, Volume 2 (of 2)

by active 19th century M. Colmache

Delivered in the National Assembly, on Friday, Dec. 4th, 1789.

“As a member of the committee whose report you have just heard, I consider myself entitled to address you, both for the purpose of submitting to you some ideas of my own on the subject of the caisse d’escompte, and more especially with the view of bringing to bear upon this subject some important questions, inseparable from it, and essentially connected with the great interests which now so urgently engage your attention.

“The idea of the establishment of a national bank in France, is one which has excited great attention, and which has gained great favour in public opinion.

“Many persons who entertain sound views on the subject of credit, consider such an establishment as indispensable, whilst even those who are least acquainted with the subject—those who scarcely know what a bank is, and who are totally ignorant of the organization suitable to a national bank, seem to derive confidence, amidst the present want of credit, simply from understanding that the National Assembly contemplates the establishment of a national bank. It would indeed seem as if the mere name of a bank were alone sufficient to settle everything; but we must be careful to observe that it is only a well-constituted bank that ought to be established, and not a national bank of any sort. Banks are by no means simple institutions; their object is indeed everywhere the same—to facilitate the circulation of exchanges, and to lower the interest of money; but the means they employ must vary extremely. Banks may be likened to highly-tempered instruments, which must be managed with caution and skill, because either great good or great evil may result from their use. Here, above all, you must be upon your guard against the various systems suggested by cupidity, by superficial knowledge, or by that half-acquaintance with the subject which is so common and so dangerous. It cannot, therefore, be entirely useless to recall to your attention, for the purpose of refuting them, the different ideas which have been promulgated on the creation of a national bank in France, particularly as some of these views have neither been opposed nor discussed, and are, perhaps, of a nature to mislead the well-intentioned. Let us take a cursory view of them.

“The creation of a national bank has been proposed. My opinion is, that a well-constituted bank ought not to be a national bank, whether by that title we understand simply the responsibility of the nation, or that the nation should have established the bank on its own account.

“People are led to believe that, because the nation is about to render itself responsible for the public debt, it might also be answerable for the funds of a bank; but it is very important that these two things should not be confounded.

“The nation ought undoubtedly to become responsible for the public debt, inasmuch as the sums which compose that debt have been lent to the nation, have been employed by the nation, and have been entrusted to the only recognised representative of the nation. In fact, properly speaking, the nation cannot be said to be security for the debt, for the nation is the debtor itself.

“The guarantee which the nation would grant to the bank should be of a totally different nature.

“So far from this national guarantee imparting credit to a bank, such an arrangement would have the effect of depriving of all credit the nation capable of adopting it. Who would place confidence in a nation which should be imprudent enough to entrust to a small number of individuals the management of a bank whose operations would necessarily be unlimited, and whereby all the national property would become mortgaged?

“It may readily be imagined that every possible precaution would be taken to prevent the managers of the bank from being unfaithful to their trust; but still the possibility will always remain, that, should a misfortune befal the bank, it would be necessary either to levy enormous contributions on the property of the country, or to declare the nation itself bankrupt. Would any prudent nation incur the risk of reducing itself to such an alternative? Would any honest nation, valuing a character for integrity, offer a responsibility which might prove illusory?