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The case of the undying debt

  • François R. Velde (a1)

The French government currently honors a very unusual debt contract: an annuity that was issued in 1738 and currently yields €1.20 per year, payable to the descendants of its original recipient. I tell the story of this unique debt, which serves as an anecdotal but symbolic summary of French public finances since the eighteenth century. Created by a powerful nobleman for one of his servants, it survived the turmoil of the French Revolution, became part of the public debt and has been scrupulously honored to this day, even though its value has been eroded away by decades of inflation.

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2 See Bordo M. D. and White E. N., ‘A tale of two currencies: British and French finance during the Napoleonic Wars’, Journal of Economic History, 51 (1991); Velde F. R. and Weir D. R., ‘The financial market and government debt policy in France, 1746–1793’, Journal of Economic History, 52 (1992); White E. N., ‘The French Revolution and the politics of government finance, 1770-1815’, Journal of Economic History, 55 (1995); Sargent T. J. and Velde F. R., ‘Macroeconomic features of the French Revolution’, Journal of Political Economy, 103 (1995); White E. N., ‘France and the failure to modernize macroeconomic institutions’, in Bordo M. D. and Cortes-Conde R. (eds.), Transferring Wealth and Power from the Old to the New World: Monetary and Fiscal Institutions in the Seventeenth through the Nineteenth Centuries (New York, 2001); Dincecco M., ‘Fiscal centralization, limited government, and public revenues in Europe, 1650–1913’, Journal of Economic History, 69 (2009).

3 Munro J. H. A., ‘The medieval origins of the modern financial revolution: usury, rentes, and negotiablity’, International History Review, 25 (2003).

4 Weir D. R., ‘Tontines, public finance, and revolution in France and England, 1688–1789’, Journal of Economic History, 49 (1989).

5 Archives parlementaires, 1re série (Paris, 1862–), vol. 87, pp. 117–18.

6 Cramer M., ‘Les trente Demoiselles de Genève et les billets solidaires’, Revue Suisse d'Économie Politique et de Statistique, 82 (1946); Velde and Weir, ‘The financial market’.

7 Forbonnais F. V. Duverger de, Recherches et considérations sur les finances de France, depuis l'année 1595 jusqu'à l'année 1721 (Liège, 1758), vol. 4, p. 148.

8 Archives parlementaires, vol. 87, pp. 76–127.

9 See Jonckheere W. G., ‘La table de mortalité de Duvillard’, Population, 20 (1965); Crépel P., ‘Les calculs économiques et financiers de Condorcet pendant la Révolution’, Économies et Sociétés, série PE, 13 (1990); Thuillier G., Le premier actuaire de France: Duvillard (1755–1832) (Paris, 1997); Biondi Y., ‘Les “Recherches sur les rentes” de Duvillard (1787) et le taux interne de rentabilité’, Revue d'histoire des mathématiques, 9 (2003).

10 Marion M., Histoire financière de la France (Paris, 1914–31), vol. 4, pp. 5581.

11 Deparcieux A., Essai sur les probabilités de la durée de la vie humaine (Paris, 1746), table XIII.

12 Archives parlementaires, vol. 87, pp. 122–3.

13 I use the method of Deparcieux, Essai, pp. 111–12, to infer Duvillard's life table. Duvillard published another life table in 1806, which became standard in nineteenth-century France, although the source data were never clear (Jonckheere, ‘La table’).

14 Nicolas C., Les budgets de la France depuis le commencement du XIXe siècle (Paris, 1886), pp. 204–6.

15 See Assemblée Nationale, Annales (Paris, 1881–1940), vol. 44, p. 683, vol. 50, p. 10, vol. 58, p. 2277, vol 64(2), p. 1506, vol. 71(1), p. 962, vol. 75, p. 886, vol. 79, p. 1555; Archives économiques et financières, Ministère de l'Économie et des Finances, Paris, B 47 371.

16 I do not know how these rentiers born after 1794 managed to obtain these annuities.

17 Marion, Histoire financière, vol. 6, p. 163.

18 See Ozeray M.-J.-F., Histoire de la ville et du duché de Bouillon (Brussels, 1974) for a general history of Bouillon.

19 See Prévost M. and d'Amat J.-C., Dictionnaire de Biographie Française (Paris, 1933–), vol. 6, pp. 1323–32 and Levantal C., Ducs et pairs et duchés-pairies laïques à l'époque moderne: 1519–1790 (Paris, 1996), pp. 466–73, on the La Tour d'Auvergne family, and Dickerman E. H. and Walker A. M., ‘The politics of honour: Henri IV and the Duke of Bouillon, 1602–06’, French History, 14 (2000); Hodson S., ‘Politics of the frontier: Henri IV, the Maréchal-Duc de Bouillon and the sovereignty of Sedan’, French History, 19 (2005) on Henri.

20 See Blanquie C., ‘Le prix de la pairie: les évaluations du duché d'Albret’, Revue d'histoire moderne et contemporaine, 50 (2003), for the exchange.

21 Other opportunistic marriages followed. In 1720, the next duke's younger brother Frédéric-Jules, prince d'Auvergne, married Olive Trant, an Irish member of Jacobite circles, who had made a great deal of money speculating on the stock-market during John Law's System. In 1707, their youngest brother, the comte d'Évreux, married the daughter of the financier Antoine Crozat, John Law's predecessor in Louisiana.

22 This correspondence is in the French Archives Nationales [henceforth AN] R/2/182.

23 His father, Auguste-François Linotte (d. 1693) was greffier du parc civil du Châtelet or clerk of the civil court in Paris; his mother was Marie-Antoinette de Walland (d. 1719). On the Linotte and Noirfontaine families, see Neyen A., Biographie Luxembourgeoise, Supplément (Luxemburg, 1876), pp. 42–5, 252–4, and Bodard P., Histoire de la cour souveraine du duché de Bouillon sous les La Tour d'Auvergne (Brussels, 1967), pp. 63–8, 77.

24 See an undated Mémoire in AN 257/AP/5.

25 AN R/2/182, p. 50.

26 AN Minutier Central [henceforth MC] LXVIII/405, 22 Apr. 1738; copy in AN R/2/182, p. 48; see the Appendix, document 1.

27 Marion M., Dictionnaire des institutions de la France aux XVIIe et XVIIIe siècles (Paris, 1923), p. 56.

28 A copy of the warrant is in MC LXVIII/422, 23 Jul. 1743.

29 AN R/2/182, pp. 48, 49.

30 AN R/2/182, pp. 43, 45–7, 50, 53.

31 MC XVII/967, 19 Aug. 1775; MC LXVIII/431, 7 Mar. 1746; MC LXVIII/422, 23 Jul. 1743.

32 AN 273/AP/207bis, 384*.

33 Besenval P. –V. de, Mémoires sur la cour de France (Paris, 1987), pp. 288–92; the Navy's budget was 31m livres, Necker J., Compte rendu au Roi (Paris, 1781), p. 110.

34 Archives parlementaires, vol. 20, pp. 316–22, 653–6.

35 Details are found in several petitions by La Tour d'Auvergne in AN AF/IV/32, as well as in the report on the law of 8 floréal II; see below.

36 Archives parlementaires, vol. 79, pp. 104–10.

37 The relevant decrees and documents are in AN AF/IV series: 32, 157, 259/1, 349, 528 dossier 4113, 717 dossier 5753.

38 AN AF/IV/259–1; see the Appendix, document 3.

39 The castle's name comes from the fact that the counts of Évreux were once kings of Navarre. The castle was inherited by the prince Eugène and razed in 1836; the estate was confiscated in 1855 after Eugène's descendants had settled in Russia and become part of the Russian imperial family. The Parisian hôtel, on the quai Malaquais, is now the École des Beaux-Arts.

40 AN 273/AP/384*.

41 AN AF/IV/717 dossier 5753; see the Appendix, document 4.

42 During the American War of Independence, Godefroi-Charles-Henri met a young English naval officer who had been taken prisoner of war. The prisoner, of modest origin, was named Philip Dauvergne. The duke was amused by the resemblance in their surnames and took a liking to the prisoner. Expecting his own son to have no heirs, he decided a few years later to appoint the Englishman as the successor of his son in the principality. In 1814 Dauvergne duly took possession of the duchy and was recognized by the Bouillonnais, but the validity of the will was vigorously contested by relatives of the last duke. The European diplomats assembled in Vienna initially contemplated recreating the duchy, just as they recreated the principality of Monaco, but in view of the disputes they found it simpler to award sovereignty over the territory to nearby Luxembourg, leaving the claims over the real estate to an arbitration court. Dauvergne's claim was rejected in 1816 and he committed suicide; the disputes between collateral heirs continued until 1825; see Balleine G. R., The Tragedy of Philip d'Auvergne, Vice-Admiral in the Royal Navy and Last Duke of Bouillon (Chichester, 1973).

43 Nussbaum A., Money in the Law: National and International (Brooklyn, NY, 1950), pp. 262–7.

44 Internal documents of the ministry of finance show that the government had also lost track of the annuity's origins. In 1908 it was thought that the annuity originated in the acquisition by Claude-Henri Linotte of three life annuities issued by the monarchy before 1764.

45 Compte de la dette publique (Paris, 1989), p. 16.

46 Letter from the Ministry of the Economy, Finances and Industry, 31 Jul. 1988.

47 I am most grateful to Mme Marie Verrier, grand-daughter of Hugues Chabiel de Morière, for access to the family archives.

48 Lucas R. E. Jr. and Stokey N., ‘Optimal fiscal and monetary policy in an economy without capital’, Journal of Monetary Economics, 12 (1983).

49 Goetzmann W. N. and Rouwenhorst K. G., ‘Perpetuities in the steam of history’, in Goetzmann W. N. and Rouwenhorst K. G. (eds.), The Origins of Value: The Financial Innovations that Created Modern Capital Markets (Oxford, 2005), cite a perpetual annuity issued by a Dutch water board in 1624 that is still honored, but the Linotte annuity may be the oldest government debt in existence: British consols only go back to Goschen's conversion of 1888.

50 in 1738.

51 Philbert Orry (1730–45).

1 The author wishes to thank Mme Verrier for the extreme kindness with which she made her family's archives available, and Danielle Velde who did most of the leg-work in this investigation. Tim Le Goff provided encouragement and a referee helped improve the paper.

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