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'Midas, transmuting all, into paper': the Bank of England and the Banque de France during the Napoleonic Wars

Chadha, Jagjit and Newby, Elisa (2012) 'Midas, transmuting all, into paper': the Bank of England and the Banque de France during the Napoleonic Wars. In: Modern and Comparative Seminar, 3 May 2012, London School of Economics and Political Science. (Unpublished)

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This paper assesses Revolutionary and Napoleonic wartime economic policy. Suspension of gold convertibility in 1797 allowed the Bank of England to nuture British monetary orthodoxy. The Order of the Privy Council's decision to suspend gold payments on Bank of England notes a¤orded simultaneous protection to the government and the Bank in pursuit of the conflicting goals of price stability and war finance. The government, the Bank of England and the commercial banks formed a loose alliance drawing on due political and legal processes and also paid close attention to public opinion. We suggest that the ongoing solvency of the Bank of England was facilitated by suspension and allowed the Bank to continue to make substantial profits throughout the Wars. It became acceptable for merchants to continue to trade with non-convertible Bank of England notes and for the government to finance the war e¤ort, even with significant recourse to unfunded debt. These aspects combined to create a suspension of convertibility that did not undermine the currency. By contrast, the assignats debacle had cost the French monetary system its reputation in the last decade of the 18th century and so Napoleonic finance had to evolve within a more rigid and limiting framework.

Item Type: Conference or Workshop Item (Paper)
Official URL:
Additional Information: © 2012 The Author
Subjects: D History General and Old World > DA Great Britain
D History General and Old World > DC France
H Social Sciences > HC Economic History and Conditions
H Social Sciences > HG Finance
Sets: Departments > Economic History
Date Deposited: 10 May 2012 13:03
Last Modified: 11 May 2012 08:32

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