ALBERT-EDOUARD JANSSEN (1883-1966) "Albert-Edouard Janssen was born in Antwerp on April 1, 1883. Bachelor in political and diplomatic sciences of the University of Louvain. Doctor in right, it was during long years professor at the same university. Senator and large specialist in the financial questions, it was three times Minister for Finance, respectively under the reigns of Kings Albert 1st, Leopold III and Baudoin 1st. It was named Minister of State in 1949. Its eminent qualities led it to ensure of innumerable functions within various Belgian and foreign financial organizations. It was in particular, to quote of it only two among most significant, National Bank manager of Belgium and President of the financial Committee of the Company of the Nations. One can say that during nearly forty years, the life of this great man was identified to some extent with the financial and economic history of our country. As an international financial expert, it was also called, within specialized missions, to put its remarkable gifts at the service of many foreign countries. Austria in particular, owes him much as regards financial economy. Informed mediator, and large broadmindedness noble-hearted man, A.E. Janssen was interested in the most various fields where the general wellbeing remained always its principal concern. That they are personal cases or companies in difficulties, one never struck in vain with his door. Its remarkable faculties and its great kindness helped innumerable people and helped of many companies. It was a large Belgian, friend of all, who put himself entirely at the service of the University, his country and Europe. This "great gentlemen", like called it Douglas Mac Arthur, former ambassador from the United States in Brussels, had been withdrawn at the evening of its life, in his/her daughter with Hamme-Mille. It is there that it died out on March 29, 1966. te Antwerpen op 01-04-1883 - Echtgenoot van Dame Marie Henriette Scheyven ( Voorzitter van de Society Belge en gewezen minister van Financiδn ) overleden te Hamme - Mille op 29 maart 1966 1. Minister van Staat. 1.Minister van Financing, 1925-1926, 1938-1939, 1952-1954. Lid van de Kamer van Volksvertegenwoordigers. Gouverneur van de Nationale Bank van Belgium, 1938-1941. Commandeur Leopoldsorde, Burgerlijk Kruis 1ste Klasse, Herinneringsmedaille van het Eeuwfeest. Grootkruis Orde van het Gouden Graan China, Groot Officier Polonia Restituta Orde Polen en Kroonorde Italia, Commandeur Orde van de Eiken Kroon Luxemburg en Officier Legioen van Eer Frankrijk. Brants recommended his student Albert-Edouard Janssen for the job. Janssen had obtained a degree in law (1907), had taken classes and seminars in political economy, and was preparing a Ph.D. thesis on les conventions monetaires, an analysis of international monetary relations from both a legal and an economic perspective (Annuaire, 1906-1908). In a period when the University of Brussels was the only place offering a degree in economics, Janssen fitted the profile of a monetary expert. Janssen's appointment at the NBB in 1908 did not stop him from finishing his Ph.D. dissertation. It focused on a detailed, partly historical discussion of the German, Scandinavian and, especially, the Latin monetary union. But Janssen's perspective was also very forward-looking (Maes and Buyst, 2003). His general assessment of currency unions presented a bleak outlook for the Latin monetary union. He understood that, from the late 19th century, nation-states increasingly considered monetary affairs as an integral part of their national sovereignty. Therefore, monetary unions could only survive if they were preceded by political unification, a process that was not on the cards in the early 20th century (Janssen, 1911, pp. 433-435). In 1911 Janssen's dissertation was awarded the prestigious Belgian Royal Academy prize. In the same year he became a part-time professor at the School of Political and Social Sciences of Leuven/Louvain University, teaching courses on 'Banks of Issue' and 'Money and credit' (Annuaire, 1911). Albert-Edouard Janssen was clearly very successful on the academic front, but what about his position at the NBB. We argue that the ideas which Janssens developed in his Ph.D. dissertation contributed to an important change in the Bank's monetary policy. As already mentioned, Belgium suffered from a massive drain of silver coins to France. Switzerland, another member of the Latin monetary union, had faced similar difficulties, but by the late 1900s had managed to solve the problem. For Janssen this was reason enough to investigate carefully the Swiss case and to draw some tentative policy conclusions for Belgium (Janssen, 1911, pp. 384-408). He recommended that the NBB abandoned its traditional policy of keeping minimal metal reserves and should systematically buy large quantities of gold. His analysis and recommendations were taken up and made more explicit in a comprehensive memorandum for the NBB's Board of Directors (Lepreux, 1911). The NBB's decision to execute most of Janssen's action programme meant de facto a move from a so-called limping gold standard towards a pure gold standard in Belgium (Janssens, 1976). Albert-Edouard Janssen was one of the first in Belgium to warn against the danger of inflation. However, he soon became very much involved in international monetary matters. In 1919, he was a member of the Allied Mission in the United States, where he gave a well-documented lecture about Belgium's financial situation (Archives UCL, Papiers Janssen, No. 639). Moreover, he became the Belgian representative in various international committees. Most important was his membership and, on two occasions his chairmanship, of the Financial Committee of the League of Nations. For the League of Nations he participated in many international missions, e.g. in Austria, Hungary and Danzig. During the Austrian mission, he was even offered the governorship of the Austrian central bank (1976). So Janssen was increasingly under time pressure. Also, with Belgium's gigantic economic problems, the need for reinforcing economic analysis at the Bank became paramount. During discussions in the Board, Janssen pleaded for the formal creation of a "Service d'Etudes Economiques" (Van der Wee and Tavernier, 1975).
Moreover, Janssen had spotted a brilliant student at Leuven University, Paul van Zeeland. Van Zeeland very much resembled Janssen's profile 15 years earlier: he held a degree in law and showed considerable interest in monetary and financial affairs. On Janssen's advice, van Zeeland went, with a CRB fellowship, to Princeton University during the academic year 1920-1921, to take Professor E.W. Kemmerer's specialized classes in monetary economics. Towards monetary stabilization.The crisis of 1923 had centered the spotlight on the danger of Belgium's large floating debt - about 70% of GDP (Pirard, 1999; Buyst, 1997). Albert-Edouard Janssen and Paul van Zeeland realized that the continuous refinancing of these short-term loans also posed a threat to the country's monetary stability. Should investors prove unwilling to renew their short-term securities at maturity, the government had no alternative but to take up advances with the central bank. The consequences for inflation and the BEF's exchange rate were all too clear. Therefore, Janssen and van Zeeland suggested that the government should issue a series of foreign long-term bonds. The government should use the proceeds to consolidate part of its floating debt and to repay its debts to the NBB. The foreign exchange reserves that became available should be used to intervene on currency markets to support the BEF. Ultimately, the BEF should be pegged to gold again at an exchange rate considerably higher than the current market rate. The exact fixing of the new gold parity would depend on international circumstances In the course of 1924 the international climate improved substantially. The Ruhr crisis was resolved, the Dawes plan became operational, the German monetary reforms were successful, and the value of the British pound moved clearly in the direction of its pre-war gold parity. These favourable developments aroused American interest in investing in Europe. So the circumstances seemed right to put the Janssen-van Zeeland plan into practice. The NBB's Board of Directors approved the stabilization programme in September 1924. Even the government responded positively to the plan, although it did not agree with the repayment of its debts to the NBB, nor with the intention to stabilize the BEF at a considerably higher level than the prevailing exchange rate. In the government's view, a deflation policy was unacceptable because it would increase its real debt burden and hurt economic growth. After negotiations between the NBB and the government, Prime Minister Theunis largely succeeded in pushing through his agenda (Van der Wee and Tavernier, 1975). The issue of a first stabilization loan of 50 million USD in December 1924 - a 30-year bond at an interest rate of 6% - was a great success. The second stabilization loan met more difficulties because of quarrels between the Belgian and U.S. governments and mounting political instability in Belgium. In the elections of April 1925, the socialists secured major gains. This complicated the formation of a new government. After long and difficult negotiations, a centre-left coalition was formed and Albert-Edouard Janssen was asked to become Finance Minister. Janssen accepted the offer, so that a direct line of communication came into being between the NBB's economics department and the government. This opened a new chapter in the BEF stabilization process (Henau, 1995). Meanwhile, van Zeeland, at a very young age, became Secretary of the Bank. The Bank also decided to further reinforce its economics department. In 1924, the year that van Zeeland became Secretary, Louis Mahieu joined the group21. In 1925 two young brilliant economists were recruited, Leon-H. Dupriez and Robert Lemoine. Conclusion, Central banks, and especially their research departments, occupy a special place at the interplay of money and markets. In this paper it is argued that monetary controversies played an important role in the creation of an economics department at the National Bank of Belgium. In the mid-1900s, monetary unrest and speculative flows provoked sharp criticism of the Bank's monetary policy. Due to lack of monetary expertise, the NBB was unable to defend itself in a convincing way. The NBB therefore decided to hire Albert-Edouard Janssen. Janssen soon acted as a kind of one-person economic service dealing with a varied range of monetary and financial issues.
The First World War constituted a severe external shock for the Belgium economy. An enormous increase in Belgium's money supply caused severe inflationary pressures. It confronted the NBB with the formidable task of working out a credible deflation programme to restore the BEF's pre-war gold parity. Budget deficits and a high public debt further complicated the effort. In these circumstances the Bank decided to set up an economics department on a formal basis, with Paul van Zeeland as its first Head. In the 1921-1924 period, van Zeeland devised several detailed plans to remedy Belgium's monetary problems. Both Janssen and van Zeeland had a crucial impact on the NBB's monetary policy. In the early 1910s Janssen managed to convince the Board of Directors to move from a so-called limping gold standard to a pure gold standard. After the First World War, van Zeeland's successive deflation programmes represented the official policy line of the NBB. But van Zeeland's plans also showed the limits of the influence of an economics department of a central bank. His advocacy of a return to the pre-war gold parity was too much focused on monetary matters. The broader economic picture, such as the negative consequences for business profitability, unemployment and government finances, remained largely disregarded. Therefore, his deflation plans were usually ignored or rejected by politicians."

©2008 article by Patrick Praats, used with permission.