Peer-to-Peer Lending in Pre-Industrial France.

Financial History Review (forthcoming)


In early modern France, before the ascent of banks, the volume of mortgage debt was equal to 10% of GDP in 1807, a percentage highlighting the vitality of early financial markets. This figure, however, is only the tip of the iceberg, mostly because the calculation is based solely on transactions extracted from notarial records. In early modern France, as well as in Spain or Italy, the notary registered –and archived ­ several types of loan agreement, such as obligations and annuities. These records have helped historians to draw a sophisticated picture of early financial French markets, assuming that people lent and borrowed money primarily via these notarial intermediaries. Lately, however, this picture has been nuanced. While notarial obligations and annuities played a critical role in the allocation of credit, in the circulation of capital, and the backing of investment, non-notarized – and often undocumented – transactions have also appeared of significance. These private agreements, often between private individuals, were contracted outside of the notary’s scope. So far, however, these non-notarized credit networks and markets have been unduly neglected.


The aim of this paper is twofold. First, it explores the world of non-notarized financial transactions and networks, highlighting their characteristics and mechanisms. Often considered merely as simple daily transactions made to palliate a lack of cash in circulation and smooth consumption, the examination of these transactions reveals not only that they served various purposes, including productive investments, but also proved to be dynamic. Secondly, this article proposes to compare non-notarized transactions with notarized ones through the study of probate inventories and notarial records respectively. It is possible, thus, to compare these two credit circuits, their similarities and different characteristics and their various networks features. I am especially interested in how the non-notarized credit market compared to the notarial one in terms of volume, actors, purposes and networks. This article argues that non-notarized credit transactions surpassed in numbers and volume notarized loans. The size of the capital market in pre-industrial was certainly larger than historians have estimated thus far.


In order to explore these questions, I have selected the probate inventories and notarial records of a rural area in southern Alsace, between 1770 and 1790. The notarial records are continuous throughout the period studied. As often with probate inventories, it is challenging to estimate their representativeness. Some villages are missing from the sample for example and not all decedents had their estate evaluated. But the number of probates in the sample is sufficient nonetheless to offer a compelling picture of the rural credit market in the area studied. The first step is to present the socio-economic characteristics of the selected area, the seigneurie of Florimont, with special reference to wealth and available credit resources. A second step is to study the various characteristics of the non-notarized credit market revealed by the analysis of the probate inventories. And finally, I devote the last part to a comparison between the non-notarized credit market with the formal notarial credit market.