Royal Companies, Risk Management and Sovereignty in Old Regime France

Abstract

Abstract Shortly after William of Orange arrived in Devon at the outset of the Glorious Revolution in 1688, Dutch troops stationed in Dartmouth seized the Amitié, a ship laden with marble purchased for the French court at Versailles. This seizure precipitated an extraordinary insurance dispute in Paris between two little-known royal companies: the Royal Insurance Company and the Royal Marble Company. This article analyses the fractious dispute and the companies at its heart. In so doing, it reflects on the dispute as a product of the French state’s broader exploitation of companies as tools of risk management: the state leveraged private capital in order to spread the risks of its virulently anti-Dutch commercial policy. Yet the dispute also exposed the ambiguities of war and peace in seventeenth-century thought and practice. In justifying their refusal to pay out on the insurance policy they had signed on the Amitié, the Royal Insurance Company’s directors suggested that an insurer could decide unilaterally that France was in a state of war, thereby triggering a contractual clause that would shift the onus back onto the policyholder. Although Louis XIV himself stepped in to defuse the dispute at its most contentious moment, the state proved unable to respond to the challenge posed to its sovereignty, with significant consequences for the French insurance industry and maritime commerce up to the end of the Old Regime.