The Bank of France, contrary to its British, American or German counterparts, never had its full-fledged well-researched academic history. This book by Yves Leclercq, Assistant Professor at the University of Saint-Etienne, aims at filing this gap for the nineteenth century, a period during which the Bank played a major role in the world's monetary history.

The title, “the superior bank,” brings back a sentence used by contemporaries in order to suggest that despite being de jure mostly a bank of issue, the Bank played from the very start the role of a central bank (a term also used sometimes back then), even if with instruments that were somewhat different from today. As this title exemplifies, Leclercq doesn't start with a modern definition of a central bank, its functions and tools, the progressive discovery of which would give an easy organization of the book, although an anachronistic one. He doesn't use a chronological exposition either, something which may make the reading difficult for people unfamiliar with the main events (a chronology would have helped).

Instead, the organization is thematic. The book has three parts and eleven chapters. The first part presents the “institution,” the second one the issuing monopoly, and the third one focuses on the Bank's policies. Actually, a number of questions—such as monopoly—are discussed in various parts, because they are difficult to disentangle from one another.

The first part deals mostly with the creation of the bank as an alliance between the state and “commerce,” i.e., the most renowned Parisian merchants. The context is important: the state needed some reputation-enhancing mechanism after the assignats hyperinflation and the two-thirds default on the public debt of 1797. The merchants considered the competition between banks of issue that existed in the aftermath of the liberalizing revolutionary abolition of privileges as too risky and unable to provide a stable instrument for large payments. As a result of this context-specific and unexpected path of development, the Bank became an institution differing both from a state administration and from a bank, with a unique capacity for developing credit and dealing with either political, economic, or financial crises. It was controlled by the most important bankers (and some industrialists) of the time, some families staying on the board (the Conseil général) for decades, but the stock being owned by an increasing number of rentiers who appreciated its low but stable return. Actually, the Régents (members of the board) soon accepted “public duties” and renounced maximizing profits in order to benefit from their central position in the credit market. As analyzed in chapter 8 (“face au pouvoir”), the government obtained at each privilege renewal (1806, 1840, 1857, and 1897) not only loans, but also a development of services for the public, particularly the opening of branches in more cities and the extension of the products proposed by the Bank.

Despite the early dominance of the Bank (it was much larger than its nearest competitors until mid-century), its monopoly was at length because laissez-faire dominated the public sphere. As discussed in chapter 5, there were many banks issuing notes in the immediate aftermath of the Revolution, from “banques de sol” issuing small denomination notes guaranteed by copper coins, to relatively large Parisian banks, through banks bringing together the main merchants and bankers in a city or region, such as the Bank in Paris. One issue that was debated was whether a monopoly was even possible, since issuing bills payable on demand and to the bearer was free, and the difference between such bills and the Bank's notes was not clear. The end to the practice of getting multiple signatures (as when bills of exchange were transferred by endorsement) in order to obtain the superior quality of the Bank's signature alone was a matter of experience, not law. But the Bank then took advantage of the situation to eliminate its competitors without bringing them to court for violating its monopoly. The case of the “banques départementales,” described in detail in chapter 6, is telling: these banks had been created in various cities under the demand of local merchant elites, first during the early Restauration, and then again in the 1830s. They had a right to issue banknotes by discounting local bills. The Bank was able to limit their growth by obtaining restrictions on their ability to discount bills on other cities and those payable in Paris, arguing this was too dangerous an activity because of the personal knowledge required for granting credit. The banques départementales dangerously leveraged their capital, perhaps in order to counter these restrictions, which led them to a crisis in 1846–1848, during which the Bank absorbed them.

Contrary to later views of metallic currency regimes, the metallic reserve was not central to the Bank, which was considered strong because of its capital stock (invested mostly in government debt) and, more important, because of its investments in three-signatures bills. Even if the commercial nature of the bill was emphasized just as in the Anglo-American real bills doctrine, the stress was on the guarantee provided by the signatures of three well-known merchants and bankers. Intimate shared knowledge of the situation of the most important firms on the French trade and credit markets was the true superiority of the Bank and its Régents. This helped them to start developing a monetary policy in order to soften fluctuations. This also allowed them to resolve some crises in the best of their interest, as suggested but not discussed in detail in the last part of the book.

In contrast to earlier accounts, Leclercq doesn't insist a lot on the debate between the Bank's orthodoxy and its challengers, the saint-simoniens and the Pereire brothers, who opposed the monopoly and argued that the Bank should stimulate industrialization through low interest rates. He is probably right. Another little developed discussion is the comparison with foreign central banks. It is limited to the Bank of England, which was probably the only discussed during the period. Leclercq briefly but clearly shows that the Bank of France acted quite differently, partly for doctrinal reasons, partly because of a different context—the absence of a money market and a much more hierarchical banking system, at least during the two first-thirds of the century.

The strengths of Leclercq's book result from its focus on the first half of the nineteenth century, a period of major choices that determined the future of the institution. This explains why the discussion about the Second Empire is more sketchy and dependent on secondary sources such as Flandreau and Plessis. The same is true for the Third Republic: the role of the Bank in the gold standard is not much discussed (but the cooperative relations with the Bank of England are proven to start much earlier than normally assumed), and the evolving relationship with the state is presented without reference to some of the recent literature (e.g., Régine Vignat's dissertation on the governorship of Pallain from 1898 to 1920). Leclercq confirms that the French monetary system was not backward in 1900; it was simply dominated by deposits, notes, and circulating commercial bills, rather than coins. He also describes the Bank's network in the provinces, but he doesn't analyze its role and how it fit in with the development of other large banks, a new feature of that period that challenged the dominance and very role of the Bank.

The book's style is unusual, for while it is analytical, it doesn't use any explicit model, and it does not make many references to the recent theoretical or empirical literature on central banking or monetary policy. It is excellent at presenting the public debates of the time and the debates within the Bank itself about its role and functions, something he does by using a number of quotations and even by writing in the style and vocabulary of the contemporaries. The advantage is that he avoids anachronism and makes readers feel they are participating in the debates and gaining an understanding of the main bankers and economists of the time. The progressive transformation of banknotes from bills into currency is much easier to understand with such an approach. The problem, though, is that many issues won't be clear to modern economists who would prefer that the discussion be phrased in modern terms. In the same vein, Leclercq also avoids any modern statistical tools. Some eleven tables provide important data, such as notes circulation, discounts, reserve ratio, etc. (mostly in the last chapters), but no explicit model is tested, and no statistical appendix is available for other scholars.

Some editing choices are rather curious: the list of references includes only books, when many articles are mentioned in the footnotes. The text is literally full of quasi-quotations but precise references are seldom given. No list of tables is given. Despite these few shortcomings and a peculiar organization and style (or because of these), this book is a must-read for anyone interested in the origins of central banking.