Abstract

"Banking Monopoly or Pluralism: Michel Chevalier's War Against the Banque de France (1855–1867)"

Teddy Paikin, McGill University (teddy.paikin@mail.mcgill.ca)

This paper examines the conflict over the Banque de France’s monopoly of note issuance between 1855 and 1867. Michel Chevalier and the Péreire brothers—founders of the Crédit Mobilier—called on the state to rescind the Banque’s exclusive privilege of note emission, while defenders such as Louis Wolowski insisted that the monopoly was indispensable for economic and political stability. Existing literature often misreads the stakes, equating Chevalier and the Péreires with the laissez-faire “free banking” views of orthodox liberals like Courcelle-Seneuil and Joseph Garnier, and treating the Banque as a forerunner of modern macroeconomic regulation. I argue instead that Chevalier and the Péreires advocated banking pluralism as a state-backed tool to discipline the Banque’s conservative, rentier practices, which they saw as anti-developmental and harmful to small producers—the foundation of political order and the benchmark for economic improvement. Granting note issuance to other banks – such as the Banque de Savoie – was not a retreat to the free market but an instrument of state discipline over the Banque de France. Conversely, the Banque’s defenders did not promote countercyclical regulation but an automatic interest-rate policy designed to protect reserves and shareholders. Despite their loss at the hands of the Banque, Chevalier and the Péreire brothers pushed the banking system to compromise with their commitments, transforming the structure of French banking well into the 20th century. Revisiting this debate clarifies the contested relationship between banking structures, state power, and development in the Second Empire.