In the Red and in the Black

Debt, Dishonor, and the Law in France between Revolutions

Erika Vause

• Publisher: University of Virginia Press
• Year: 2018
• ISBN:
  9780813941424
• Topic: Geschichte
• Subtopic: Französische Geschichte

"The most dishonorable act that can dishonor a man." Such is Félix Grandet's unsparing view of bankruptcy, adding that even a highway robber—who at least "risks his own life in attacking you"—is worthier of respect. Indeed, the France of Balzac's day was an unforgiving place for borrowers. Each year, thousands of debtors found themselves arrested for commercial debts. Those who wished to escape debt imprisonment through bankruptcy sacrificed their honor—losing, among other rights and privileges, the ability to vote, to serve on a jury, or even to enter the stock market.

Arguing that French Revolutionary and Napoleonic legislation created a conception of commercial identity that tied together the debtor's social, moral, and physical person, In the Red and in the Black examines the history of debt imprisonment and bankruptcy as a means of understanding the changing logic of commercial debt. Following the practical application of these laws throughout the early nineteenth century, Erika Vause traces how financial failure and fraud became legally disentangled. The idea of personhood established in the Revolution's aftermath unraveled over the course of the century owing to a growing penal ideology that stressed the state's virtual monopoly over incarceration and to investors' desire to insure their financial risks. This meticulously researched study offers a novel conceptualization of how central "the economic" was to new understandings of self, state, and the market. Telling a story deeply resonant in our own age of ambivalence about the innocence of failures by financial institutions and large-scale speculators, Vause reveals how legal personalization and depersonalization of debt was essential for unleashing the latent forces of capitalism itself.

Part One

A Revolution in Commercial Personhood

1

Hard Contracts and Hard Money

Honor, Commerce, and Debtors’ Prison during the French Revolution

In the spring of 1797, the play Appel à l’honneur ou Les remboursements en assignats debuted on the stages of Paris. Set during the previous year, the play centered on the moral dilemma faced by a merchant named Deslandes who had to choose between paying back his creditors in assignats, the Revolution’s increasingly worthless paper money, and risking bankruptcy when the Revolutionary government decided to completely demonetize the inflated currency. Torn between the prospects of financial disaster and personal dishonor, Deslandes unwisely opted for the latter. This choice provoked a rift with his wise and virtuous wife, who compared repayment in assignats to guillotining his creditors. Deslandes, however, argued that he could not be asked to bear “the entire weight of the Revolution’s ravages” on his own financial shoulders.1 The merchant soon reaped the consequences of his unethical decision. The entire town turned violently against him and his family, outraged by his “crime” in repaying with “paper without credit” all those who had trusted him.2 His daughters were attacked in the streets. Suitably penitent, Deslandes at last heeded the advice of his wife, who demanded that the family sacrifice everything in order to repay their creditors in metallic currency. Insisting that “children and creditors are in the same family,” Madame Deslandes affirmed that “when, by the force of events, a man is placed in the necessity of sacrificing either his lines of blood or his lines of honor, he holds the contract of trust even more sacred than that of nature.”3

This play, based on the true story of a commercial house in Lyon, was only one of many similarly themed theatrical pieces written between 1795 and 1798 as French citizens struggled to make sense of the massive inflation wrought first by the assignat and then by a brief-lived successor currency, the mandat territorial. Like Appel à l’honneur, works such as L’agioteur, Les modernes enrichis, Tout le monde s’en mêle ou la Manie du commerce, and Les parvenus aujourd’hui possessed edifying as well as satirical elements, simultaneously depicting and inveighing against the social ills of speculation during the paper-money regime. Bitterly aware of the significant gap between behavior that was legal and behavior that was moral, these plays often invoked the Revolutionary rhetoric of duty and civic virtue to curtail excesses attributed to the Revolution itself. In Appel à l’honneur, these stern dictums were most clearly enunciated by Madame Deslandes, who upheld the sacrifice of familial ties for the greater national good and assimilated economic contracts between creditors and debtors to the social contract that maintains the polity. There was little subtlety in the play’s message: the good citizen placed his duty to his country above religious and regional ties, even as a creditworthy economic agent placed contractual obligation above personal self-interest or familial well-being.

While Madame Deslandes’s counsel triumphed on stage through pure persuasive power, legislators sought to compel borrowers to honor their engagements through more coercive means. Sharing Madame Deslandes’s insistence on the need to sacrifice personal gain for the public good, and largely indifferent to the dire straits into which the government’s own financial behavior had placed many borrowers, lawmakers invoked the necessity of reestablishing debt imprisonment, which had been abolished in March 1793, as a means of reining in the purported excesses of Revolutionary individualism run amok. Combining Revolutionary discourse on contract with invocations of honor that recalled the old regime, legislators hoped not only to restore trust in the circulation of hard currency after years of economic turmoil but also to burnish the Directory’s own shaky image as defender of an emergent moderate republican order in the aftermath of political instability and terror.

For several decades now historians have debated the novelty of the French Revolution: did it mark a fundamental rupture with the old regime and the beginning of modernity? Generations of scholars throughout the nineteenth and twentieth centuries certainly believed this to be the case. For liberals, the French Revolution ushered in the age of human rights and democracy. For Marxists, it represented the bourgeoisie’s overthrow of the decadent feudal aristocracy. However, revisionist scholars have argued that instead of breaking with the past the French Revolution accelerated the monarchy’s tendency toward centralization of key institutions and structures. For these scholars, the Revolution marked a radical break not in material conditions but in discursive modes for describing them: in short, the idea of revolution itself was the real novelty. More recently, historians have sought a middle ground between these two extremes. This move has coincided with a turn away from the Reign of Terror to its previously little studied aftermath. In examining the Thermidorean Convention and the Directory, a period when Revolutionaries turned away from the discourse of a radical break and instead sought to create enduring republican institutions, scholars find evidence of a much more complicated interplay between novelty and continuity.

This chapter follows the fate of one institution, contrainte par corps, over the course of the eighteenth century. A long-established feature of old regime law, over the centuries the usage of contrainte par corps had gradually become identified with commercial activity. As such it played an important role in the debates about commerce and honor stirred by the burgeoning economy of the eighteenth century, and it found both critics and supporters among Enlightenment thinkers. During the early years of the Revolution, opinion swung decidedly toward the hostile side. Condemned as an abuse of the old regime, debt imprisonment was abolished by the National Convention in March 1793 only to be reestablished in 1797 as the desire to encourage the circulation of the newly reestablished metallic currency inspired the Directory to reestablish what it saw as the norms of the pre-Revolutionary marketplace. The case of debt imprisonment is particularly revelatory not just for what it can tell us about the nature of revolutionary change at the structural level, but also because of the relationship between discourses, notably surrounding commercial honor and credit, and the material realities of finance that coalesced in the debates surrounding the procedure.

Like so many other developments of the Directory and Empire, it might be easy to dismiss the reestablishment of debt imprisonment as a return to the old regime past, or at least what was believed to be the old regime past, rather than a foundational moment in a new order. The economic historians Philip Hoffman, Jean-Laurent Rosenthal, and Giles Postel-Vinay have noted that although the Revolution transformed French society in deep and lasting ways, it had little effect on legislation involving credit.4 The form of debt imprisonment reestablished in 1798 closely resembled debt imprisonment as it had been practiced for a century preceding its abolition in 1793. Moreover, the broader cultural context of debt seems to show more continuity than rupture with its old regime past. Corroborating Clare Crowston’s claim that credit continued to be used well into the nineteenth century to signify social, political, and economic forms of reciprocity and power, critiques both of debtors and of debt imprisonment bear striking resemblances across the Revolutionary divide.5

This is not to say, however, that the Revolution changed nothing. Rebecca Spang has suggested that credit reveals a narrative of this tumultuous era that departs from the linearity of either the traditional story of the Revolution as rupture or the revisionist account of linear continuity. She argues that the Revolutionary period followed a “dialectical logic, in which the so-called ‘modern’ emerges only haltingly and only through sustained conflict with the old.”6 The case of debt imprisonment bears out such an interpretation. While the laws put in place following the Revolution may have resembled those of the old regime, they were new in several important respects. Primarily, they systematized a patchwork of dispersed customs and regulations into a coherent national approach to creditor-debtor relationships, and they solidified an understanding of debt based on notions of contractual obligation. Revolutionary legislators cast themselves as crusaders against both the supposed evils of old regime credit, with its incestuous links to political power and its corrosive connection to luxury, and the excesses of Revolutionary disorder, allegedly the result of unfettered individualism. In using notions of the social contract to uphold the rights of lenders in commercial credit contracts, legislators also created an understanding of debt imprisonment with penal implications.

No term featured more prominently in this debate than “commercial honor.” Honor first entered into discussions of mercantile activity in the decades preceding the Revolution when Enlightenment pamphleteers appropriated this traditionally aristocratic virtue as a means of extolling the superiority of “productive” classes, including merchants, over idle and parasitic ones. Although during the early years of the Revolution honor took a backseat to the patriotic notion of “virtue,” by the Directory “honor” again became the trademark of the good merchant. On the practical side, legislators desperately sought anything that could revive the languishing institutions of commerce after a decade of Revolutionary upheaval had severely threatened the trust on which they were based. As James Livesey has shown, many figures in the Directory adhered strongly to a doctrine of “commercial republicanism” that sought to reconcile the stern asceticism of Revolutionary practice with an appreciation of the benefits of commerce.7 The use of force to encourage trust in the circulation of money and, consequently, in public credit resembled actions taken by the British government one hundred years earlier when the death penalty had been utilized as a means of instilling faith in the newfangled innovations of the Financial Revolution.8 “Commercial honor” was not merely about words, or even about morality: it was about the very tangible value of money. Yet in inscribing the rhetoric of honor within the Revolutionary discourse of the social contract, according to which those who violated the obligations of honor could be equated to those who violated their patriotic duties, the Revolutionaries would create an apparent similitude between punishment and detention for debt that persisted into the decades that followed.9

Commercial Honor and Commercial Debt before the Revolution

In 1748, a half century before Appel à l’honneur ou Les remboursements en assignats graced the stages of Paris, Charles Secondat, Baron de Montesquieu, authored L’esprit des lois, a book whose influence on the French Revolution has only recently been fully appreciated by historians.10 The reflections Montesquieu offered in this work on the relationship between commerce, law, and honor prove a particularly useful place to begin a discussion of the changing meaning of debt imprisonment across the century of the French Revolution. In Book 20, dedicated to the intersections of commerce and the law, Montesquieu expressed his support for commercial debt imprisonment, using incarceration to show where commerce demanded a different law than that of “ordinary” affairs. He wrote: “In matters that derive from ordinary civil contracts, the law should not entail debt imprisonment; because in these the liberty of a citizen is more important than the ease or prosperity [aisance] of another. But, in relations deriving from commerce, the law should find the public wealth [aisance publique] more important than the liberty of a citizen.”11 Montesquieu’s praise of commercial contrainte par corps as necessary for the efficient functioning of commerce mobilized certain terms—public and private, wealth and liberty—that played a central role in Enlightenment understandings of commerce. On one hand, he linked commerce with liberty and believed commerce to be best cultivated under republican forms of government. However, Montesquieu argued against this freedom as a liberty that extended to the individual commerçant. Rather, he stated that “the freedom of commerce is not a power granted to the commerçant to do what they please” and, conversely, that “the constraint of the commerçant is not the constraint of commerce.” Such constraints existed because commerce’s justification was its link to the public good, public wealth, and public credit. In the chapter that immediately followed his excerpt on debt imprisonment, Montesquieu praised the “law of Geneva,” which excluded the sons of bankrupts from public office, adding that under such a regime “the credit of the individual has still all the weight of public credit.”12

Despite the amount of attention that Montesquieu famously lavished on explaining the emotional cores of individuals under republican, monarchical, and despotic regimes, he devoted little time to the internal motivations of merchants. Indeed, merchants seemed equally difficult to reconcile with Montesquieu’s definition of either republican or monarchical governments. Republics were defined by virtue, consisting of voluntary subordination of personal interest to the greater good of country. Monarchies, on the other hand, were dominated by the principle of honor, a much more complex passion that excited men to great acts serving the public good, but did so out of an ambition for preference and distinction rather than out of self-renunciation.13 In place of either of these two principles, the merchant was guided only by his self-interest, which in turn explained much in the long history of commerce. As indicated by his harsh attitude toward commercial debts, Montesquieu believed that individual self-interest could not be trusted to protect commerce by itself. Rather, the liberty of commerce demanded restrictions on the freedom of the individual commerçant.

Although Montesquieu separated commerce from honor, he belonged to an ongoing discussion in which many of his interlocutors came to argue for a close connection between the two. The century or so before the French Revolution witnessed not only remarkable growth in trade and commerce but also the emergence of the economy as a distinct subject of philosophical investigation and political concern. Attempts to compete with international rivals such as England and the Netherlands led French monarchs to copy their designs by carving out a commercial empire in the Americas and India. Colonial expansion enabled the import of raw materials as well as increasing wealth from trade in commodities like sugar and coffee. Spurred by significant gains in agricultural productivity and fed by the profits of oversea trade, urban centers became much wealthier. An ever-expanding variety of goods, particularly luxury items such as clothing and furniture, reached a widening spectrum of French society. With the expansion of trade in the eighteenth century, finance became an increasingly prominent part of this credit economy. The circulation of paper credit, in the form of bills of exchange and promissory notes, funded commercial transactions, while the state sustained its debts by heavy reliance on rentes, annuities bought up by private buyers. An increasingly heterogeneous assortment of investors pooled money into these loans, convinced of the long-term stability of the social order on which they rested. The rise of state-chartered joint-stock companies like the Compagnie des Indes tie...