Post-war France, between ruins and fragile hopes
To understand the origin of this affair, it is necessary to plunge back into the context of France of the immediate post-war period. The country comes out of six years of conflict. The funds are empty, the economy is to be rebuilt, and confidence in the national currency, the franc, is fragile. One of the pillars of this economic reconstruction and monetary stability lies in the gold reserves. Unfortunately, these were largely melted to finance the war effort.
France, like other nations, is then linked by the Bretton Woods agreements, signed in 1944. These agreements have established a new international monetary system, making the American dollar the reference currency, the only one directly convertible into gold. All other currencies, including the franc, were defined in relation to the dollar, and therefore, indirectly, compared to gold. Maintaining a stable parity between the franc and the dollar was therefore crucial, not only for the economic credibility of France on the international scene, but also to facilitate trade and attract foreign investments.
The situation becomes even more tense when France contracts, in 1952 and 1954, two state loans whose reimbursement is indexed to the value of gold. This means that if the Price of gold were to increase, the cost of reimbursement of these loans would rise too, jeopardizing already fragile public finances. The stability of the gold market is no longer just an economic question, it becomes a real political issue.
The “False Napoleons” operation: a bold solution, but illegal
In this context of crisis, the Minister of Finance of the time, faced with a gold shortage and the need to stabilize the market, makes a radical decision and, retrospectively, illegal. He ordered, with the more or less formal downstream of the Banque de France, the manufacture of copies of pieces of 20 golden francs, the famous “Napoleons”, also known as “Coqs” because of the Gallic rooster struck on one of their faces.
These pieces, struck between 1907 and 1914, had been demonetized in 1926, that is to say that they were no longer legal. However, their design is resumed identically, including vintages. The operation is carried out in the utmost discretion, without official decree, which is completely unusual. A simple letter from the Minister of Finance to the Banque de France is enough to launch production.
The exchange stabilization fund, the organization responsible for regulating the gold market, is at the heart of the system. It is he who will use these “false” parts to intervene on the market, buying or selling gold (or rather, “false napoleons”) in order to maintain the courses at an acceptable level and to avoid speculation excessive that could destabilize the franc.
The objectives of this risky maneuver
The “False Napoleons” operation pursued several objectives, all linked to the stabilization of the French economy:
First, it is a question of controlling the gold market. By massively injecting these parts on the market, the exchange stabilization fund can influence the courses and avoid prices outbreak. Such an outbreak would have disastrous consequences, not only on frank-dollar parity, but also on the cost of reimbursement of borrowings indexed to gold, further aggravating the country’s financial situation.
Secondly, and this is a controversial point raised by Yannick Colleu, the operation would have allowed the state to save a significant quantity of gold. According to the expert, the “false” pieces have a gold content slightly lower than that of the original parts. The difference, although minimal at the scale of a single room (897.3 thousandths of fine gold instead of 900 thousandths), becomes significant when it is multiplied by the 37.5 million parts manufactured. In total, the state would have saved approximately 654 kilograms of fine gold. The Banque de France formally disputes this assertion, arguing that the parts were in accordance with the manufacturing tolerances of the time and that the natural wear of the parts may explain a slight loss of mass.
When rumor becomes scandal
Despite the care given to the manufacture of these copies, details end up betraying their true nature. The professionals of the gold market, used to manipulating these parts, note subtle differences. “False Napoleons” are too brilliant and too new compared to the original parts which, even well preserved, generally bear the traces of time. In addition, Yannick Colleu claims that their color is slightly different, more red, due to an alloy containing a little more silver and a little less gold.
The rumor swells, and in January 1952, the Banque de France was forced to get out of its silence. She discreetly published a press release to try to justify the presence of these documents on the market, a crisis communication that only fits suspicion.
A controversial heritage
The case of “false napoleons”, although largely forgotten by the general public, has legal and fiscal ramifications that last until today.
On the criminal level, the manufacture of counterfeit money, even demonetized, is an offense. Article 442-3 of the French Criminal Code is clear on this subject. The action of the French State in the 1950s would therefore be, if it was judged today, considered to be criminal.
In terms of tax, the situation is complex. Yannick Colleu denounces the fact that these “false” parts are taxed during resale as real golden currencies, with a tax of 11.5% on the sale price. According to him, these documents should be considered as simple tokens, and therefore benefit from a tax exemption up to 5000 euros. The Banque de France, for its part, maintains its position: these parts have always been treated as real currencies when it was involved in the gold market, and current taxation is therefore justified.
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