The Doctor is a Quack: The Delahaye Brothers, or How Fringe Politicians Framed the 1930s Financial Crisis Narrative in the French Senate

The French banking sector remained unregulated until the law of June 1941, a very late date compared to other comparable countries. This lag has often been interpreted as a sign that the financial crisis that swept the world in the 1930s largely spared France. But recent work has shown that the French financial crisis of the early 1930s was quite comparable to that of other countries. This is why the question of the belated regulatory response to financial distress must be addressed again. Contrary to a naïve conception of political action, the absence of comprehensive regulation did not stem from a reluctance to pass laws regulating the financial sector, but rather from a skewed perspective on the nature of the financial sector and its problems. To document this phenomenon, I propose to analyze how the upper house of the French Parliament—the Senate—dealt with financial issues during the interwar period. This analysis shows that the Senate did not hesitate to pass financial laws but that it did so from an outdated perspective on banks and the financial sector, consistently promoted by quack doctors since the 1880s. Post-WW1 conceptions and various episodes of Ponzi finance and outright scandal helped promote this narrow-minded analysis, along with the lack of the broader perspective a regulatory body or consistent statistics could have provided. Failing to grasp the full scope and nature of the problems facing the French financial sector, the quack doctors’ narrative became entrenched until WW2 broke out.