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HG 978.2.W65
Paper-money Inflation In France:How It c
ANDREW D. WHITE.
DEC 18 19^;
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BY
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NEW YOEK:
D. APPLETON AND COMPANY,
549 AND 551 BEOADWAY.
1876.
Ebiebed, according to Act of Congress, in the yearl8T6,
'A paper read before a meeting of Senators and members of the House
of Representatives of both political parties, at Washington, April 12 and ;
before the Union League Club, at Nevr York, AprU 13, 1876.
" For proof that the financial situation of France at that time was by
no means hopeless, see Storch, " ficonomie Politique," vol. iv., p. 159.
;;
\
struggled to aid Nfecker outside the National Assem-
bly was ^rgasse, e^ deputy from Lyons. His pam-
phlets agaiMt-fliB-ifredeemable paper exerted, perhaps,
a wider influence than any others ;
parts of them seem
fairly inspired. Any one to-day reading his prophecies
of the evils sure to follow such a currency would cer-
'
See Bucliez and Eoux, " Histoire ParMmentaire de la Revolution Fran-
Caiae," vol. iii., pp. 364, 365 also p. 405.
;
For pamphlet itself, see "A. D. W. Collection;" for the effect pro-
duced by it, see Ohallamel, "Les Fran^ais sous la E6volution." Also, De
Goncourt, " La Soci6t6 Fran? aise pendant la K6volution."
'
is now hoarded."
On the other hand, Cazal^s and Maury show that
the result can only be disastrous. Never, perhaps, did
a political prophecy meet with more exact fulfillment
in eveiy line than the terrible picture drawn in one of
Cazal^s's speeches in this debate. Still the cuiTent
ran stronger and stronger; Petion makes a brilliant
Frenchmen, see Challamel, " Sur la B6volntion," p. 305. For general history
of John Law's paper-money, see Henri Martin, "Histoirede France;" also,
Blanqni, "Histoire de I'fioonomie Politique,'' vol. ii., pp. 65-87; also, "Se-
nior on Paper Money," section iii., Part I.
10 PAPEE-MONET INFLATION IN FRANCE.
'
See Buchez and Eoux, " Histoire ParlGmentaire," vol. v., p. 321, etseq.
For an argument to prove that the assignats were after all not so Tvell se-
cured as John Law's mone7, see Storch, " Economie Politique," vol. iv.,
p. 160.
: '
' See " Addresse de 1' Assemble Nationale sur les EmissioiiB d' Assignats
Monnaies," p. 5.
" Ibid., p. 10.
PAPER-MONET INFLATION IN FRANCE. 13
' Von Sybel, " History of the French Revolution," vol. i., p. 252.
PAPER-MONEY INFLATION IN PRANCE. 15
'
For Mirabeau's real opinioa on irredeemable paper, see letter to Oe-
rutti, in leading article of the Moniteur; alao " M6moires de Mirabeau,'' vol.
vil., pp. 23, 24, and elsewhere.
;
debt, and that all the national lands be exposed for sale
immediately, predicting that prosperity will thus return
to the nation, and that all classes will find this addi-
words :
" The earth is the source of value ;
you cannot
distribute the earth in a circulating value, but this paper
becomes representative of that value, and it is evident
that the creditors of the nation will not be injured by
taking it." On the other hand, appeared in the leading
paper, the Moniteur, a very thoughtful article against pa-
per-money, which sums up all by saying, " It is, then, evi-
dent that all paper which cannot at the will of the bearer
be converted into specie cannot discharge the functions
of money," and goes on to cite Mirabeau's former opin-
ion in his letter to Cerutti, published in 1789 ; the
famous opinion that "^aperjmoney is a nursery of tyr-
anny, corruption, and delusions; a veritable orgy of ,
gold will lose all its value, since all exchanges will
' See Von Sybel, " History of the Eeyolution," vol. i, p. 265.
;
clared that " coin will keep rising until the people have
hung a broker." ' Another popular theory was that the
Bourbon family were in some miraculous way drawing
off all solid money to the chief centres of their intrigues
ia Germany."
' See also De Goncotirt, " Soci6t6 FranQaise," for other explanations.
° See Lea Bivolutiona de Paris, vol. ii., p. 216.
,
'
'
See Challamel, "Les Frangais sous la Eevolution ;
" also, Senior, " On
some Effects ofPaper-Money," p. 82.
=
See Buchez and Eoux, vol. x., p. 216.
=
For an admirable statement and illustration of the general action of
this law, see Sumner, "History of American
Currency," pp. 157, 158 also ;
'/See Von Sybel, "History of the French Revolution," vol. 1., pp. 281,
283.
" For proofs that issues of irredeemable paper at first stimulated manu-
PAPER-MONET INFLATION IN FRANCE. 33
factures and commerce in Austria, and afterward ruined them, see Storch's
"Eoonomie Politique," vol. iv., p. 223, note; and for the same effect pro-
duced by the same causes in Eussia, see ibid., end of vol. iv. Fpr the same
effects inAmerica, see Sumner's " History of American Currency." For
general statement of effect of inconvertible issues on foreign exchanges, see
MoLeod on "Banking," p. 186.
3
34 PAPER-MONEY INFLATION IN FRANCE.
' See Louia Blanc, " Histoire de la Kevolution Frangaise," tome xil '
p. 113.
PAPER-MONEY INFLATION IN FRANCE. •
35
1
See " Extrait du Eegistre des Delib6ratioii8 de la Section de la Biblio-
and public men who, a few years before, had been pure
in motive and above all probability of taint, became
luxurious, reckless, cynical, and finally corrupt, Mira-
was bad enougli, but worse still was this growing cor-
•
See especially " Dlsoours de Fabre d'Eglantine," in Moniteur for August
11, 1793; also debate in J/brai<«Mr of September 15, 1793; also Prudliomme's
Revolutions de Paris.
42 PAPER-MONET INTLATION IN FKANCE.
flation.
save one thing, and that one thing was labor. Strange
as it may at first appear, while all products had bepn
raised enormously in price by the depreciation of the
currency, the stoppage of so many manufactories, and
the withdrawal of capital, caused wages in the summer
pf 1792, after all the inflation, to be as small as they had
been four years before, namely, fifteen sous per day.' No
more striking example can be seen of the truth uttered
by Webster, that " of all the contrivances for cheating the
laboring-class of mankind, none has been more effectual
was issued, and at last bills of one sou, and even of half
a sou, were put in circulation.'
'
See Von Sybel, vol. i., p. 515 ; also Villeneuve Bargemont, " Histoire
de I'Eoonomie Politique," vol. ii. p. 213.
^ As to purchasing power of money at that time, see Arthur Young,
" Travels in France during the Years 1787, 1788, and 1789."
'
For notices of this small currency, with examples of satirical verses
4i PAPER-MONEY INFLATION IN FRANCE.
culty.'
written upon it, see Challamel, " Les Francais sous la Revolution," pp. 307
308. See also Mercier, " Le Nouveau Paris," edition of 1800, chapter ccv.,
entitled " Parchemin Monnoie."
For Ohaumette's brilliant argument to this effect,
'
see Thiers, Shoberl'a
translation, published by Bentley, vol. iii., p. 248.
PAPER-MONET INFLATION IN FRANCE. 4.5
great and civilized nation, and one which was not con-
fined to the brains of a few idle dreamers, but practi-
cally carried out in all its terrible consequences. It
I
logical ; they were so. Whenever any nation intrusts
to its legislators the issue of a currency not based on
the idea of possible redemption in coin, it intrusts to
them the power to raise or depress the value of every
article in the possession of every citizen. Louis XIV.
claimed that all property in France was his own, and
" See Von Sybel, vol. iii., pp. 11, 12. For general statements of theo-
ries underlying the maximum, see Thiers. For a very interesting picture
by an eye-witness, of the absurdities and miseries it caused, see Mercier,
" Nouveau Paris," edition of 1800, chapter xliv. For summary of the
Ee-
port of the Committee, with list of articles embraced under it, and for
various interesting details, see Villeneuve Bargemont, " Histoire de I'Eco-
nomie Politique," vol. ii., pp. 218-39. Far curious examples of severe
penalties for very slight infringements of the law on this subject, see Louis
Blanc, " Histoire de la Edvolution Francaise," tome x., 144. p.
;
For a simple exposition of the way in which the exercise of this power
'
ating thrift ;
promoting extravagance and wild riot, by
the issue of an irredeemable currency.
It has also been argued that the assignats sank
in value because they were not well secured —that
securing them on Government real estate was as futile
as if the United States were to secure notes on its real
in ordinary times.'
' Louis Blanc calls attention to this very fact in showing the superiority
of the French assignats to onr Continental currency. See Louis Blanc,
" Histoire de la Edvolution Fransaise," tome xii.,
p. 98.
PAPER-MONET INFLATION IN FRANCE. 49
' See Von Sybel, vol. iii., p. 26 ; also Montgaillard, " Histoire de la
K6volution FraiiQaise," p. 196.
° For an excellent statement of the action of this law in our own conn-
try, see Sumner, p. 220.
PAPER-MONEY INPLATIOjS^ IN FRANCE. 51
Very carefully he
had devised a funding scheme
which, taken in connection with his system of issues, was,
in effect, what in these days would be called an " inter-
1789, and who had not returned. This gave new land\
to be mortgaged for the security of paper-money.
'
See Oambon's " Report," August 15, 1753, pp. 49-60 also Decree of
;
•
See Thiers ; also, for curious details of measures taken to compel
see Senior, "Lectures on Results of
Paper-Money,"
farmers and. merchants,
pp. 86, 87.
"
See Von Sybel, vol. iv., p. 231.
= Von Sybel, vol. iv., p. 330 also, tables of depreciation in Moni-
See ;
' For a life-like sketch of the vigorous way in which these exchanges of
assignats for valuable property went on at periods of the rapid depreciation
of paper, see Challamel, " Lea Frangais sous la E6volution," p. 809 ; also,
Say, " Eoonomie Politique," septieme 6dition, p. 147.
' See De Nervo, "Finances Franfaises,'' p. 280.
PAPER-MONEY INFLATION IN FRANCE. 55
>
For a very complete table of the depreciation from day to day, see
Supplement to the Moniteur, of October 2, 1797. For the market prices
of the louis d'or at the first of each month, as the collapse approached, see
MontgaiUard. See also official lists in the A. D. W. collection.
''
See "M6moires de Thibaudeau," vol. ii., p. 26.
=
See " Le Nouveau Paris," vol. ii., p. 90.
depreciation," see the
*For curious examples of these "scales of
A. D. "W. collection.
56 PAPER-MONEY INFLATION IN FRANCE.
'
For a striking similar case in our own country, see Sumner, " History
of American Currency,'' p. 47.
' See Villeneuve Bargemont, " Histoire de I'fioonomio Politique," vol. iL,
p. 229.
"
nent twice before that time, and once since — first, in our
'
For an account of " new tenor bills " and their failure in 1737, see
Sumner, pp. 27-31 for their failure in 1781, see Morse, Life of Alexander
;
"
Tor similar failure in Austria, see Sumner,
Hamilton," vol. i., pp. 86, 87.
p. 314.
"
See Marchant, " Lettre aux Gens de Bonne Foi."
60 PAPER-MONET INFLATION IN PEANCE.
'
Among the many striking accounts of the debasing effects of " infla-
tion " upon. France under the Directory, perhaps the best is that of Lacre-
telle vol. xiii., pp. 32-36. For similar effect, produced by same cause in
our own country in 1819, see statement from Mles'a Register in Sumnor,
p. 80.
62 PAPEK-MONET INFLATION IN FRANCE.
in same chapter.
64: PAPEE-MONET INFLATION IN FRANCE.
nation followed.
New issues of paper were clamored for as a new
dram is called for by a drunkard. The new issues
ended."
It came, as you saw, by seeking a remedy, for a
financial common-
to Hon. David A. Wells. For the recent triumph of
sense in France, see Bonnet's articles, translated by George Walker, Esq.
THE END.
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