Contention on the Cotentin: Military-Medical Entrepreneurs and the French Contractor State During the Seven Years’ War

Abstract

This article presents an unstudied facet of the French contractor state, focusing on the relationship between medical entrepreneurs and the war ministry. Observing three reserve hospitals built in Normandy during the Seven Years’ War, it argues that the state could not accurately estimate demand for medical facilities in wartime. This uncertainty put entrepreneurs in a difficult situation where they could not simultaneously carry out their duties and turn an immediate profit. Contractors therefore attempted to improve their chances of long term gain by producing memoirs, soliciting attestations, and leaning on well-placed contacts to build up personal credit. This credit in hand, contractors could more easily secure indemnities disbursed by the government once a conflict had ended.

With war looming in early 1756, the French war minister, Marc Pierre de Voyer de Paulmy (also known as the Count of Argenson), informed the Intendant of Caen, François-Jean Orceau de Fontette, that the ministry would soon transfer twenty-one battalions of French troops to his generality. ¹ The threat of a British cross-channel descent had forced France to bolster defenses on the Atlantic coast by placing large garrisons in Roeun, Alençon, and in locations throughout Brittany. ² As part of this surge, as many as 15,000 men went to Normandy, although their actual strength was probably lower. ³ Regardless of its total size, this significant influx of men brought logistical challenges to an area that did not possess substantial military infrastructure. It fell to Argenson, Fontette, and a handful of war commissioners to determine how these troops would be garrisoned, supplied, and, importantly for our purposes, healed.

Argenson and Fontette contracted Jean Vauger, a mid-level financier, on April 22, 1756 to fund the creation of military reserve hospitals in the towns of Valognes, Coutances, and Avranches on the Cotentin Peninsula. ⁴ Problems arose between the two parties in the summer of 1756, as the reserve hospitals sat devoid of patients. By fall the hospitals had become superfluous. Vauger lost, by his estimate, as much as 40,000 livres and the war ministry terminated his contract on October 7, 1756. ⁵ The two parties began a prolonged battle over indemnities soon after. ⁶ This article uses the story of Vauger's military hospitals to illuminate a hitherto neglected instance of what historians sometimes call a contractor state. ⁷

Work on contractor states has emerged over the last twenty years as historians interested in the business of war became dissatisfied with the dominant theses of early modern military historiography, including: The oft-cited military revolution debate; sociological approaches to the role of warfare in state formation; and works on the fiscal-military state. ⁸ Adherents of the contractor state contend that these older studies perpetuated a misleading narrative that European kingdoms nationalized their militaries between 1500 and 1800. ⁹ Additionally, such works portrayed the relationship between entrepreneurs and the state as an antagonistic one, wherein the state pushed aside private individuals and companies in order to privilege state-controlled alternatives to military supply. However, all early modern European states relied heavily on entrepreneurs. In other words, the processes of early modern state formation did not come about at the expense of non-state actors, who, in fact, thrived in an environment where governments continually spent ever-increasing sums on their armies and navies.

Scholars also contend that multiple types of contractor states existed, as governments responded pragmatically to local conditions. ¹⁰ Put differently, national preferences produced a variety of relationships between the state and the entrepreneur. Spain privileged a small number of large operators who could benefit from economies of scale, ensuring the delivery of goods and services, albeit at a high cost. ¹¹ Britain, on the other hand, favoured a wider range of contractors who came from various sectors of society. ¹² Eighteenth-century Venice similarly employed grain contractors of differing sizes and backgrounds, demonstrating that even within state borders contractors came invaried forms. ¹³ In each of these national cases, the state selected entrepreneurs who could best operate in their respective environments. ¹⁴

Furthermore, proponents of the contractor state thesis argue that national interests and private interests aligned to produce amicable relationships between states and contractors. ¹⁵ For example, through highly skilled entrepreneurs, the state gained access to specialized knowledge that it would not have had otherwise. Meanwhile, contractors gained a powerful client who could bestow enticing privileges such as monopolies or access to exclusive patronage networks. With so much money to be made on the one hand, and so much expertise to be gained on the other, the two parties developed a symbiotic relationship. Attesting to this symbiosis, a recent study of French naval entrepreneurs suggests that only ten percent of contracts resulted in conflict, showing a high degree of cooperation. ¹⁶

This article seeks to make some contributions to the above historiography. First, it will present a new facet of the French contractor state, involving the relationship between military-medical entrepreneurs and the French war ministry. ¹⁷ Such a study is particularly important because of the relative paucity of records concerning contractors and the French army, which has limited the number of detailed histories. ¹⁸ Second, while historians have shown how a desire for economic efficiency in response to local conditions shaped the state's choice of contractor, this piece instead explores a situation where local conditions forced the state to rely on a suboptimal choice. As we will see, France could not always follow the path of least resistance when it came to the local provision of military healthcare. In Normandy, civilian hospital administrators were best positioned to establish the reserve military hospitals. However, because the war ministry could not convince these officials to enter into a contract, it therefore had to seek out Vauger, who was less well-suited to the task.

Third, this article will examine the factors that complicated the relationship between the war ministry and medical entrepreneurs, putting men like Vauger into difficult situations where they could not simultaneously carry out their duties and turn an immediate profit. Both the state and contractors expected wartime complications like high operating costs and difficult patient transfers. They also realized a strained fiscal-military state would not be able to deliver timely payments. As such, both sides operated under the assumption that wartime contractors would have to wait until after the state had recovered its finances to see a return on their earlier investments through a post-war reckoning that would settle accounts. In other words, all parties knew that a contentious battle over indemnities (repayment for past services) lay over the horizon. Thus, while the Seven Years’ War still raged, Argenson and Vauger actively jockeyed to discredit each other while improving their own prospects in the inevitable post-war indemnity negotiations.

Herein lies the importance of Vauger and his hospitals. Together, they demonstrate that although the state and the contractor were in a symbiotic relationship, this relationship was not perfectly balanced, causing both sides to seek competitive advantages in order to save money or earn money at the expense of the other. Furthermore, such contentions were probably commonplace, but become more visible in the documentary record through the presence of broken contracts. Hence, although Vauger presents an exception to the rule, his story elucidates the hidden manoeuvring usually carried out in secret. Lastly and importantly, this article does not argue that broken contracts occurred frequently in the French contractor state, nor does it attempt to overturn the larger historiographical consensus that the state and contractors worked together amiably. Rather, it will provide a helpful addition to the historiography by illuminating the road blocks that caused friction between the two parties, showing how their interests could and did come into conflict: an example of contention between the state and the contractor

The War Ministry's Operations and the Medical Situation on the Cotentin

As a matter of course, Fontette, the intendant of Caen, could not avoid arranging hospitals to provide military healthcare in Normandy. Long before the Seven Years’ War, the war ministry had made it standard practice to support armies with medical facilities both in the field and in garrison through what it called the service de santé. ¹⁹ This catch-all term referred to any aspect of military healthcare, but it did not yet comprise a formalized “service” within the military. As such, the service de santé fell under the larger umbrella of military logistics as overseen by the war ministry.

The war ministry directed military hospitals in the following way. ²⁰ First, the minister managed a number of bureaus within the ministry itself, each staffed by clerks of varying rank tasked with multiple facets of military administration. One bureau might oversee matters of subsistence, while another might focus on promotions, pensions, and bonuses. The hospitals themselves never had their own bureau per se, in part because the number of bureaus changed according to the desires of the acting minister. For example, in 1777 Saint Germain reduced the number of bureaus from fourteen to eight. ²¹ Then again in 1787, Brienne reduced the number from eight to five. ²² However, hospitals did enjoy, from at least 1746 onwards, a kind of sub-office nestled inside one of the larger bureaus called the bureau pour la vérification des états d’hôpitaux militaires, which contained at least eight clerks. ²³

Second, these clerks communicated directly with the staff of provincial and army intendants who acted as executors of central authority in the provinces or on campaign. The intendants performed many military, judicial, administrative, and financial functions, including dealing directly with medical entrepreneurs and their employees. Third, below the intendant and his staff worked war commissioners tasked with limited missions. ²⁴ They might scout new hospital locations or perform medical inspections. Thus, in 1756, directives flowed outward from the minister Argenson, through his staff at the ministry, towards the intendant Fontette and his staff, who then worked with war commissioners, entrepreneurs, entrepreneurial employees, and state employees on the ground, such as controllers, who did the actual work of running hospitals.

In peacetime, a stable relationship existed between medical entrepreneurs and the contractor state wherein both sides could benefit from the other without much friction. While the particulars of this relationship varied across the eighteenth century, between the end of the War of Austrian Succession and the start of the Seven Years’ War a single contractor, Francois Dourlens, supplied goods to all the kingdom's permanent military hospitals and paid the salaries of many hospital employees. ²⁵ Argenson selected Dourlens in 1746 to serve for nine years as the general entrepreneur as part of a larger plan of medical reform. ²⁶ Located in garrison towns near France's borders, such as Lille, Perpignan, and Briançon, these permanent hospitals could count on steady streams of patients from nearby regiments, experienced medical practitioners, experienced administrators, and connections to local suppliers. ²⁷ Controllers kept track of the number of patients entering and exiting, sending monthly états to both the ministry and the nearest intendant for approval. After verification, the entrepreneur would receive a montly payment. Without the precariousness of war, this system worked well, particularly because the payments based on these états arrived regularly, providing the entrepreneur a steady source of income. ²⁸ Attesting to the stability of Dourlens’ situation, it appears that no new healthcare contracts were signed between 1746 and 1756 at the start of Seven Years’ War. However, war injected much uncertainty into the equation. It called for greater numbers of entrepreneurs as multiple French armies pressed into foreign territory or redeployed to unusual areas within the kingdom.

Working together, Argenson and Fontette tried to navigate an uncertain medical situation in Normandy. Their first problem concerned how many battalions the generality of Caen could support medically. On February 6, 1756, Fontette told Argenson that the region only had enough civilian hospitals to care for ten battalions, as opposed to the intended twenty-one. ²⁹ No preexisting military hospitals were located in Normandy. Likewise, no medical entrepreneur stood readily available to create a hospital network. In situations like this, standard procedure dictated that the ministry rely on the closest hôtel-dieu or hôpital général to take in soldiers. ³⁰ Such arrangements held great benefit for the state. It would not have to recruit, hire, or train medical personnel, and it would not have to bother finding a contractor to run the new hospitals. The state could simply tap into pre-existing networks, using local personnel to circumvent the need for military-medical contractors.

This policy, however, put pressure on local civilian hospitals which struggled to accommodate the flood of new troops and their regular patients at the same time. For example, on February 22, hospital administrators in Thorigny (today Torigni-sur-vire) complained that they had received notice to prepare thirty beds for sick and wounded soldiers who would be garrisoned in the town. Unfortunately, the hospital only had two free beds, and even if it unceremoniously discharged its healthiest patients, it could only muster an additional nine spaces. ³¹ While not as dire, a similar situation existed in Coutances where the local hôtel-dieu could provide twenty-five beds only if it cleared out a room intended for the inhabitants of city. ³² Providing healthcare to twenty-one battalions called for between six hundred and twelve hundred extra beds, far more than local hospitals could provide. ³³ Thus, the war ministry, at the behest of Argenson, decided to create three reserve hospitals, each containing several hundred beds. Not only would these hospitals take pressure off the pre-existing civilian hospital system, but they would act as a safeguard in case of heightened medical demand due to an epidemic or battle. They guaranteed sufficient medical facilities for an uncertain future.

The next problem concerned the location of the reserve hospitals. Rather than station them alongside the largest concentrations of troops in the cities of Cherbourg, Granville, and La Hougue, Argenson settled on the cities of Valognes, Coutances, and Avranches. ³⁴ He reasoned that war commissioners could more easily travel to these central locations on the interior of the peninsula connected by supposedly good roads. Second, these cities possessed a higher concentration of large buildings that could be transformed into hospitals. Third, the ministry believed that the quality of care would be higher in these locales due to a greater selection of nearby physicians and surgeons. ³⁵ Finally, and although Argenson did not state it specifically, it made sense to have hospitals further inland in case of invasion. With medical facilities sitting well behind the presumptive frontline, wounded soldiers could more easily be evacuated out of harm's way. By the end of February, Fontette had carried out his orders. He dispatched a war commissioner, one Mr. Montrosier, to locate suitable buildings, talk to local suppliers, and interface with nearby civilian hospitals. ³⁶

To avoid the hassle and expense of working with a new contractor, the ministry sought to offload management of the reserve hospitals onto administrators running the local hôtels-dieu and hôpitaux généraux. ³⁷ Here, the state prioritized economic efficiency and tried to take a pragmatic approach in light of conditions on the ground. Local hospital administrators knew the situation on the Cotentin best, enjoying pre-established networks of potential suppliers. Furthermore, the ministry considered Normandy fertile ground that could easily supply a military hospital with its ample natural resources and food stuffs. ³⁸ Thanks to this abundance, the minister set what was called the prix de journee at fourteen sols. ³⁹

The prix was the mechanism by which the war ministry reimbursed both military hospitals and civilian hospitals on military footing. In theory, if not practice, it determined how much money medical entrepreneurs in both peacetime and wartime would make. Each hospital recorded the number of patients who came through its doors and noted how long they stayed. If payments were not in arrears, hospitals then received payments each month from the extraordinaire des guerres (France's primary military treasury) based on the total number of days spent caring for sick and wounded soldiers. For example, if ten men stayed in a hospital for ten days each, then that hospital had provided an accumulated 100 days of healthcare. The war ministry, assuming a fairly standard prix of fourteen sols per day, would pay the hospital administrators fourteen hundred sols, or seventy livres. While this money ultimately came from the extraordinaire des guerres, it did so also by way of a deduction from the soldiers’ pay called the retenue. The retenue varied from rank to rank. For example, in 1746, a captain who fell sick would have deducted one livre and eight sols per day from his regular pay, while a fusilier would lose only five sols per day from his considerably lower salary. ⁴⁰ If there were any shortfalls, i.e., if the collected retenues did not match what the hospital entrepreneur or administrator was due, then the king paid for the difference, again through the extraordinaire des guerres. ⁴¹ Importantly, this meant that it behooved hospitals to have as many patients as possible and keep them as long as possible. Without a steady stream of patients, hospitals working with the war ministry would lose substantial income. For Vauger, as we will see, this would prove to be a point of contention, one which misaligned the otherwise shared interests between medical providers and the state.

The civilian administrators at the hospitals at Valognes, Coutances, and Avranches did not believe that fourteen sols per day would suffice, asking instead for twenty. The higher prix aggravated Argenson who noted that many military-medical entrepreneurs in other provinces operated on as little as twelve or thirteen sols per day. Argenson directed Fontette to not be “frightened into settling for a higher price” during negotiations, and that it would be “impossible” for these hospitals to fail to turn a profit given the number of projected patients and the generous prix of fourteen sols. ⁴² However, disagreements between the two parties did not stop there. The administrators at the hospital in Avranches had no extra time to set up a new hospital. They had spent their early months in 1756 preparing for the arrival of an entire regiment of troops for whom they had to find lodging. ⁴³ Because these administrators were also local dignitaries with other public responsibilities, they claimed that they could not fulfill their varied functions simultaneously. ⁴⁴

Additionally, trouble arose when searching for suitable buildings. Again in Avranches, two initial choices of a girls’ school and a seminary proved unsuitable, and a second war commissioner named Daviles had no choice but to proffer a church and adjoining house belonging to the Capuchins, which ruffled the religious order's feathers. ⁴⁵ Finally, the reserve hospitals in all three cities would have to follow military-medical regulations set down in 1747. ⁴⁶ The administrators at Coutances took special exception to a provision that submitted the hospital to the authority of the war commissioners who would carry out inspections. They reasoned that under such supervision it would be impossible to run the hospital in their own manner. ⁴⁷ Thus, on April 4, 1756, both Coutances and Avranches sent letters to Fontette, informing him that they could not carry out the administrative functions of the reserve hospitals. ⁴⁸

The ministry had wanted to work with civilian administrators on the Cotentin because that was the most efficient and pragmatic choice, but it had also made too many demands and remained unyielding in those demands. It offered an insufficient prix de journée. It ordered locals to garrison troops in their communities while they simultaneously set up hospitals, a task that hospital administrators had neither the time nor the space to complete. Locals also loathed prioritizing soldiers over the deserving poor for whom their establishments were intended, a problem not unique to France. ⁴⁹ Finally, the ministry would have subjected these new establishments to the oversight of the war commissioners, which disagreed with local sensibilities. In this instance, the French contractor state failed to adapt to local conditions by adjusting its interests to align with the interests of the towns’ inhabitants. It had taken its desire for efficiency too far, suggesting that contractor states were not always willing to take the path of least resistance in response to the situation on the ground. Given their failure to entice and negotiate with the locals, Argenson and Fontette had little choice but to find a contractor.

Jean Vauger and his Reserve Hospitals

It is difficult to appraise Vauger's position within the contractor state. However, he must have had some reputation and resources, seeing that the war ministry turned to him on two occasions during the Seven Years’ War to run temporary military hospitals. In addition to his service in Normandy, Vauger funded hospitals in support of French troops operating in Spain and Portugal during the little-known Fantastic War of 1762–1763. ⁵⁰ In an effort to improve its strategic position heading into potential peace negotiations, in 1761 France forged an alliance with Spain called the “Family Compact.” Together, these Bourbon powers undertook offensive operations to weaken British trade networks and colonial holdings. Portugal, a major British trading partner, represented an obvious target. ⁵¹ The French sent eight regiments totalling about 8,000 men to assist with the Spanish invasion of Portugal that started in May 1762. ⁵² The campaign ended in military disaster for the Bourbons. They captured little territory, engaged in no major battles, and were routed by poor logistics, popular resistance, and disease.

Reportedly, French military hospitals overflowed with patients, and 3,000 lay sick in Salamanca alone by September 1762. ⁵³ Because entrepreneurs were paid on a per-patient, per-day basis, 3,000 men would have brought a promising return on investment; however, funds were constantly in arrears and Vauger probably did not profit from this Spanish venture until after the war. Between dealings in Normandy and Spain, Vauger had carved out a niche during the Seven Years’ War as a financier of temporary, mid-sized hospitals systems.

This niche helped Vauger access a life of significant, but not extravagant, luxury. At the time of his death, he lived on the Rue de l’Echelle nestled between the Tuileries and the Palais Royal in the heart of Paris, within relatively easy reach of Argenson who worked from Versailles. ⁵⁴ He patronized a number of craftsmen and artisans who produced luxury goods, such as Francois Guillaume Tiron, a master jeweler, Gabriel Millet, a master hatter, and Nicolas Hericouart, a master haberdasher. ⁵⁵ He also enjoyed the services of at least one servant named Francois Goncha, a secretary named Raimond Durand, and he utilized carriages rented to him by Louis Regnaud. ⁵⁶ A man about town, Vauger frequented cafés, book sellers, and apothecaries, all to whom he owed outstanding payments at the time of his death. ⁵⁷

Despite coming from a non-noble family, Vauger had connections to the inner workings of the contractor state that allowed him to secure his indemnities in a timely manner. Standing to inherit Vauger's fortune, whatever size it may have been, were two first cousins, one named Jacques Abraham and the other Martin Vauger. Jacques claimed to be a fermier de la terre, giving the impression of a provincial, non-noble elite. Martin, conversely, a tailor and sacristan in the Parish of Saint Chapelle near Champigny-sur-Veude, seems to have been of lower status. ⁵⁸ Probably then, the Vauger clan hailed from Anjou and comprised part of the region's roturier, landowning class. Apart from familial connections, he also had business dealings with prominent members of the contractor state, such as Pierre Marquet De Peyré who came from a line of large-scale financiers and held the positions of fermier général and munitionnaire général des vivres for French armies in Flanders and Germany. ⁵⁹ Thus, De Peyré helped oversee most elements of bread provisioning for the largest French armies of the Seven Years’ War. ⁶⁰ De Peyré lived on the Rue Gallion, mere blocks away from Vauger, and he collected money due to him from Vauger's estate shortly after Vauger's death. ⁶¹ More importantly, Vauger had access, through Fontette, to prominent state officials including the treasurer of the extraordinaire des guerres Jean-Baptiste-Louis-Benoît Thomas de Pange, who instructed Vauger on how he might expedite reception of his indemnities. ⁶²

In total, our contractor had been wealthy enough to play the role of financier, forwarding the state tens of thousands of livres. He was also well connected enough, given his business with De Peyré and his working relationship with Fontette which gave him connections, by extension, to de Pange. In this sense, he was a good fit for the role. On April 7, Fontette sent a draft of the reserve hospital contract to Argenson, who then, after slight alterations, awarded it to Vauger on April 22. Vauger would take responsibility for providing all clothing, bandages, medicines, food and most staff salaries between June 1, 1756, and May 31, 1757. Importantly, Vauger agreed to the prix of fourteen sols per day, which the locals had believed to be insufficient. ⁶³

With hospital operations starting in June, the ministry and their newly contracted entrepreneur had just over a month to prepare. Several problems immediately arose. The first related to preexisting buildings that could serve as hospitals. Here the war commissioners had to requisition structures owned by various religious orders. In Valognes they took over a house run by Eudists. In Coutances, they resorted to a Dominican monastery, and in Avranches, despite protests, they requisitioned the previously mentioned church and attached house belonging to the Capuchins. ⁶⁴ None of these three structures could immediately serve as a hospital. The house in Valonges required 811 livres of repairs, while the monastery in Coutances and the church Avranches required 1,207 lt and 1,113 lt respectively. These expenses went to such things as boarding over cloisters to create more space for patients and building exterior latrines to control sewage. ⁶⁵ Second, due to the massive increase in hungry soldiers, food became scarce in the area. Prices quickly increased, raising the operating costs of the hospitals before they even got started. For example, apples, ever abundant in Normandy, suddenly became rare, tripling the price of drinks like cider and calvados. Because the war ministry had already chosen to replace beer with cider as the primary drink for hospital patients, this became a significant expense for Vauger, and he made sure to complain about it to Fontette. ⁶⁶ A similar situation arose with firewood, which was being burned across the province at increased rates. ⁶⁷ Experienced contractors probably understood wartime inflation to be an inevitability. By broadcasting these financial pains to his connections within the contractor state, Vauger was building his case for future repayments.

Third, the considerable increase of nearby soldiers also drained the countryside of carts, wagons, and horses. Too few of these could be found to transport sick men from their encampments to the reserve hospitals, which were not unsubstantial trips. For example, one of the largest garrisons lay in Granville, about six leagues equidistant from both Avranches and Coutances, requiring almost a full day of travel by buggy over reportedly bad roads. The expense of this travel did not fall on the shoulders of the entrepreneur, but on the war ministry. With travel being arduous and the diminishing supply of horses and carts increasing the price of transportation, the ministry was loath to pay for infirm soldiers to transfer away from these camps. By late July, the ministry felt it had no choice but to expand the smaller civilian hospitals in Granville and elsewhere to address this problem. ⁶⁸ Argenson in a letter to Fontette in September 1756, wrote: “One thing I cannot recommend enough to you, is avoiding, especially during the winter, the transfer of sick soldiers (to the reserve hospitals). It is much better to receive them in charity hospitals … We save by this method expenses to the king and prevent many troublesome difficulties.” ⁶⁹

By placing the hospitals so far away from the camps, the ministry had effectively disincentivized itself from making use of the reserve hospitals it had spent the last four months scrambling to create. By mid-September, the reserve hospitals, originally intended to house as many as 400 patients each, contained only thirty at Valognes, twenty-four in Coutances, and seventeen in Avranches. ⁷⁰ Meanwhile, the civilian hospitals at Granville and Cherbourg overflowed with so many patients that the king actually reduced their prix de journée because they were now entitled to too much money. ⁷¹ With such low numbers, Vauger had trouble keeping his establishments in operation, and could point to this fact as the reason why he had haemorrhaged money: another bargaining chip in future negotiations.

Argenson was busy collecting chips of his own. For example, Vauger had contracted with a local butcher in Avranches to provide one cow regularly to feed what he thought would be a large number of patients. However, with so few actual patients and so much extra beef, the hospital ran the risk of letting the meat spoil. The butcher, not willing to reduce his income, refused to alter the contract and thus the hospital continued to receive more meat than it could handle. The hospital director working for Vauger, in an attempt to keep the hospital financially sound, considered selling the excess meat rather than letting it rot. However, selling meat in this way violated Vauger's contract wherein such resale was forbidden to prevent abuse. So, the hospital had more meat than it could handle. Here we come to some manoeuvring on the part of Argenson. When the war commissioners inspected the hospital in Avranches, they reported that it served rotting meat to its patients, providing fuel for Argenson to discredit Vauger in future negotiations. ⁷² Indeed, this was not the only line of attack Argenson used. His war commissioners found moldy bread and bad cider. They claimed that the clothing Vauger had provided to his patients was too small, and that vital staff, including hospital directors and doctors, had become negligent. Similarly, they alleged a surgeon named Badelar working at Valognes had complained so much about the entrepreneurial management that Vauger had had him transferred him to Granville. ⁷³ In a scathing letter outlining these numerous accusations sent to Fontette, Argenson wrote: “You have told me, monsieur, that the reserve hospitals in your department were in good condition. I learn, however, from all that I am told by the inspectors, that there is much abuse and malpractice going on, which leads me to believe you have been deceived.” ⁷⁴

Vauger did not sit idle. His personal and financial credit was on the line. He responded with a memoir addressed to Fontette a short time later. ⁷⁵ He claimed that because soldiers entered the hospitals in such low numbers, and because the ministry paid the entrepreneur on a per-patient, per-day basis that he had little income with which to keep up his facilities, let alone turn a profit. In essence, he accused the ministry of undermining the functionality of his hospitals through its choice of location and its policy of relying on the existing civilian healthcare system before the reserve healthcare system. He also defended himself in detail against each accusation, and provided a set of attestations from doctors and surgeons in support of the hospitals’ good standing. ⁷⁶ To put it bluntly, Vauger responded in kind to Argensons aggression.

The contractor state, in preparing for unrealized events, had had to navigate an uncertain medical situation on the Cotentin, wherein battles and epidemics could have occurred, but did not. Both Vauger and Argenson had no way of knowing what the real demand for military-medical care would have been. The policies resulting from this variable situation misaligned the interests of the two parties. Once this became clear, both Vauger and Argenson moved to present their cases in the best possible light. If Argenson could find negligence, then he could justify paying Vauger a lesser indemnity. Whereas, if Vauger could show Fontette and others that he had operated a well-run hospital in spite of the ministry's policies, then he stood not only to outmanoeuvre Argenson, but to turn a greater profit through indemnities.

Negotiating Indemnities

On September 26, 1756, only four months after opening, the war ministry gave Fontette permission to shut down the reserve hospital at Avranches. The other two hospitals struggled on for just over a month, but on October 7, 1756, Argenson consented to the closure of the remaining two. ⁷⁷ In doing so, he terminated Vauger's contract eight months early. The war ministry surmised that a British descent was unlikely to occur as the campaigning season came to an end, rendering the reserve medical facilities unnecessary. The ministry was probably content to have avoided a major battle or epidemic. Vauger, however, could not have been pleased with the outcome.

In May 1757, Vauger initially claimed to have lost over 17,770 lt. Because operating costs had been so high and because there were so few patients in his hospitals, Vauger insisted that state would have needed to pay him a prix of between 21 and 25 sols, well above the price stipulated in his contract. ⁷⁸ Vauger even remarked that he had had to take out loans to keep the enterprise operational. ⁷⁹ Argenson was loath to believe that France owed this much money, and he made Fontette verify Vauger's accounts three times. ⁸⁰ Fontette, unsurprisingly, took Vauger's side on these verifications, stating that the contractor's losses had all been above board. ⁸¹ As part of the procedure for closing the hospitals, the state partially reimbursed Vauger 11,085 livres in June 1757 for various items (such as shirts) that he had purchased. Even while approving this partial reimbursement, Argenson continued to discredit Vauger. He wrote to Fontette on June 14 saying “I cannot prevent myself from telling you that the estimated value of these items seems to me quite high.” He continued: “The shirts which were valued at 3 livres a piece … I am informed those purchased at Avranches only cost forty-five sols and nine deniers, while those at Valognes cost fifty sols.” ⁸² Argenson had thus suggested that Vauger had inflated the value of these shirts by ten to fifteen sols, forcing the state to pay in excess of their true worth. Argenson ended his letter directing Fontette to name an “expert” to guard the king's interests during future estimations. ⁸³

Vauger, unsatisfied with this initial reimbursement, asked again for an indemnity in April 1758, complaining that he still had interest payments and unpaid bills. ⁸⁴ With the war in full swing and the threat of a national default looming, these requests fell on deaf ears. The war ministry would not return to the issue until July 1763, after the Seven Years’ War had ended. Once again, Vauger pressed his case, asking for an even larger indemnity including: 9,855 lt for interest on his loans, 3,133 lt for other losses not claimed in 1757, and 3,914 lt for expenses incurred while travelling between Paris and Caen. Between these and other expensesn perhaps accrued in Spain, Vauger's request now amounted to over 40,000 livres. ⁸⁵

Complicating matters, the war ministry had gone through many changes in the intervening years. The position of war minister had changed hands three times during the Seven Years’ War: once in early 1757, and again in March 1758, and once more in January 1761. This meant that acting minister in 1763, the Duke of Choiseul, had no prior dealings with Vauger, and could only decide on Vauger's indemnities based on accounts left to him from Argenson. To make matters worse, many of the ministry's papers had been lost during its relocation to the hôtel de la guerre in Versailles, which had opened in 1760. ⁸⁶ Without much first-hand knowledge of the problem, the minister turned to Fontette to determine the validity of Vauger's case. Fontette, reasoned that while Vauger was not entitled to 40,000 livres, he still merited significant compensation. Fontette set what he believed to be the correct amount at 25,101 lt. ⁸⁷ This payment was granted in December 1763, almost seven years after Vauger's first request for reimbursement. ⁸⁸ Vauger would not have long to enjoy this windfall. He died on March 18, 1764 at his home in Paris from a reportedly “quick” but undisclosed illness. ⁸⁹ Regardless, Vauger had played the game well enough to secure a substantial indemnity. Through his successful appeals to Fontette, he maintained his personal credit in the face of skepticism and hostility from Argenson.

Conclusion

Historians of the contractor state have called military demand “fickle and unpredictable.” ⁹⁰ This insight applies to Vauger whose empty hospitals lead to a broken contract and a subsequent battle over the appropriate levels of repayment. Other French cases during the Seven Years’ War corroborate Vauger's experience. For example, medical entrepreneurs serving in Germany encountered similar troubles between 1758 and 1760. These men also bore the financial brunt of uncertain demand for healthcare, and crafted a careful narrative to demonstrate thier financial hardships in pursuit of a massive 4,670,000-livre indemnity. ⁹¹

Problems began at the end of the 1757 campaign, when the new war minister, Belle-Isle, approached this group of financiers to take over the army's medical services. They signed a one-year contract agreeing to be responsible for all aspects of hospital management, excluding transportation costs, at a prix of twenty-five sols. ⁹² The 1758 campaign took a financial toll on these entrepreneurs, who claimed that they not only had to reimburse the previous medical company for their materials, but also had to establish new medical depots, new supply routes, and new hospitals. By the end of the year, the entrepreneurs estimated their expenses at 3,552,895 lt, but, with payments in arrears, had only received 1,297,874tt from the war ministry, leading to a loss of 2,255,021 lt. ⁹³

The entrepreneurs nevertheless renewed the contract for a second year. But the same problems that had plagued Vauger again started to emerge. As French armies advanced, they left in their wake a trail of large hospitals, each containing hundreds of beds. For example, after France moved into Marburg and Kassel, it created between the two cities three hospitals totalling 1,600 beds. Similarly, as the army took the cities of Korbach, Giershausen, and Paderborn, it established three hospitals averaging four hundred beds each. ⁹⁴ By the end of the campaign French armies had built twenty-four hospitals with around 6,000 total beds. ⁹⁵ However, according to the entrepreneurs, those hospitals only received 3,000 patients throughout 1759. Because patients did not remain sick for the entirety of a campaign, the hospitals took in well under half their capacity, leaving the large facilities empty and treating perhaps as few as fifty patients at a time. The company had spent 3,402,401 lt during 1759 but had only received 2,648,000 lt from the king, leaving a deficit of 426,445 lt. ⁹⁶

To lure the entrepreneurs back a third time, Belle-Ilse offered a higher prix of 27 sols, along with other concessions. The company accepted, but heightened transportation and food costs soon weakened the generous offer. Once again, a lack of wagons and animals raised transportation costs to exorbitant levels. Although the company's contract stipulated that another party would handle transportation, that clause crumbled under the pressures of war where many animals and carts had been requisitioned for other military purposes. ⁹⁷ This forced the entrepreneurs to improvise their own transportation arraignments, turning to old caissons to supplement a meager fleet of wagons. ⁹⁸ In light of these unforeseen costs, the contractors claimed they would have needed a prix of 34.3 sols to break even just for that year. ⁹⁹ Total yearly expenditures amounted to 4,039,946 lt at the end of 1760, at which point the company claimed it had exhausted all of its resources. The ministry had only paid 2,050,000 lt, leaving a difference of 1,989,946 lt. When totalled across the three years, the company lost 4,671,414 lt by its own estimation. ¹⁰⁰ Much like Vauger, these entrepreneurs sought to position their losses in the best possible light through a lengthy memoir directed at Choiseul. If they could demonstrate credibility, commitment to providing good healthcare, and financial sacrifice on behalf of the state, then they stood to gain greater returns on their investment.

Despite differences in scale, this account contains striking similarities to Vauger's experience. Both blamed their substantial financial losses on large empty hospitals with no patients, expensive transportation rates due to a lack of animals and wagons, high prices for food and medicine, and, finally, an insufficient prix de journée. Taken in conjunction, these case studies suggest that making money from hospital contracting during wartime rested on one's ability to craft a compelling narrative of financial hardship. This would strengthen one's credibility within the war ministry, and could be greatly bolstered by internal connections which both Vauger and the above high-level entrepreneurs surely had. Furthermore, crafting a narrative was part of a larger game of positioning and leverage that took place beyond the veil of the extant documentary record. All sides understood wartime provisioning to be a long-term prospect, where significant returns only came after the conclusion of a conflict when the state had regain its financial footing and could pay back financiers. Thus, to ensure maximum profits on the part of the entrepreneur, or to forestall unnecessary expenditures on the part of the state, both sides worked to shift opinion. Note that this was, an informal process with no overarching adjudicating body as had been the case earlier in the century when France took extreme measures through the Chambres de Justice to root out fraud in the aftermath of conflicts. ¹⁰¹ Regardless, this manoeuvring comes most clearly to light when contracts broke, as Vauger's case demonstrates.

Returning by way of comparison to the historiography, a recent analysis of 1,319 French naval contracts shows that only 128 of these involved some level of conflict between the state and the entrepreneur, but little is known about what these conflicts involved. ¹⁰² David Plouviez, the author of the study, suggests that disagreements arose over four main areas, including: Late payments from the navy, disagreements over the interpretation of clauses within the contracts, debates over the quality of materials delivered, and finally transportation problems. ¹⁰³ We see many of these areas of tension are reflected above. To this, we might add uncertain levels of demand as a source of potential conflict. Demand for military hospitals in times of peace remained low, especially outside of areas with permanent military garrisons.

In peacetime, in areas where France garrisoned soldiers, stable demand and consistent payments from the war ministry meant that contractors did not need to go through the gymnastics described above. However, when war erupted, the state had no choice but to assume that demand for hospitals would skyrocket. Unfortunately, the state could not know where a battle might take place or when an epidemic might emerge. If it did not assume high levels of demand, then the war ministry could face a medical catastrophe. This caused France to hire medical entrepreneurs for theatres where combat or epidemics may or may not happen. In the end, variability, as a result of unpredictable war time conditions, could lead to broken contracts and friction in what was otherwise an amiable relationship between the contractor state and the entrepreneur.