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Home -> Andrew Dickson White -> Fiat Money Inflation in France -> Notes

Fiat Money Inflation in France - Notes

1. Introduction

2. Foreword By Mr. John Mackay

3. Chapter I

4. Chapter II

5. Chapter III

6. Notes


Note: The White Collection at the Cornell University library mentioned
in many of the following notes is described here:


[1] A paper read before a meeting of Senators and Members of the House
of Representatives of both political parties, at Washington, April
12th, and before the Union League Club, at New York, April 13th, 1876,
and now (1914) revised and extended.

[2] For proof that the financial situation of France at that time was
by no means hopeless, see Storch, "Economie Politique," vol. iv,
p. 159.

[3] See Moniteur, sitting of April 10, 1790.

[4] Ibid., sitting of April 15, 1790.

[5] For details of this struggle, see Buchez and Roux, "Histoire
Parlementaire de la Révolution Française," vol. iii, pp. 364, 365,
404. For the wild utterances of Marat throughout this whole history,
see the full set of his "L'ami du peuple" in the President White
Collection of the Cornell University. For Bergasse's pamphlet and a
mass of similar publications, see the same collection. For the effect
produced by them, see Challamel, "Les Français sous la Révolution";
also De Goncourt, "La Société Française pendant la Révolution,"

For the Report referred to, see Levasseur, "Histoire des classes
ouvriès et de l'industrie en France de 1789 1870," Paris, 1903,
vol. i., chap. 6. Levasseur (vol. 1, p. 120), a very strong
conservative in such estimates, sets the total value of church
property at two thousand millions; other authorities put it as high as
twice that sum. See especially Taine, liv. ii, ch. I., who gives the
valuation as "about four milliards." Sybel, "Gesch. der
Revolutionszeit," gives it as two milliards and Briand, "La
séparation" &c., agrees with him. See also De Nerve, "Finances
Françaises," vol. ii, pp. 236-240; also Alison, "History of Europe,"
vol. i.

[6] For striking pictures of this feeling among the younger generation
of Frenchmen, see Challamel, "Sur la Révolution," p. 305. For
general history of John Law's paper money, see Henri Martin, "Histoire
de France"; also Blanqui, "Histoire de l'économie politique,"
vol. ii, pp. 65-87; also Senior on "Paper Money," sec. iii, Pt. I,
also Thiers, "Histoire de Law"; also Levasseur, op. cit. Liv. i.,
chap. VI. Several specimens of John Law's paper currency are to be
found in the White Collection in the Library of Cornell
University,--some, numbered with enormous figures.

[7] See Buchez and Roux, "Histoire Parlementaire," vol. v, p. 321, et
seq. For an argument to prove that the _assignats_ were, after all,
not so well secured as John Law's money, see Storch, "Economie
Politique," vol. iv, p. 160.

[8] For specimens of this first issue and of nearly every other issue
during the French Revolution, see the extensive collection of
originals in the Cornell University Library. For a virtually complete
collection of photographic copies, see Dewamin, "Cent ans de
numismatique française," vol. i, passim.

[9] See "Addresse de l'Assemblée nationals sur lea emissions
_d'assignats_ monnaies," p. 5.

[10] Ibid., p. 10.

[11] For Sarot, see "Lettre de M. Sarot," Paris, April 19, 1790. As
to the sermon referred to see Levasseur as above, vol. i, p. 136.

[12] Von Sybel, "History of the French Revolution," vol. i, p. 252;
also Levasseur, as above, pp. 137 and following.

[13] For Mirabeau's real opinion on irredeemable paper, see his letter
to Cerutti, in a leading article of the "Moniteur"; also "Mèmoires do
Mirabeau," vol. vii, pp. 23, 24 and elsewhere. For his pungent
remarks above quoted, see Levasseur, ibid., vol. i, p. 118.

[14] See "Moniteur," August 27, 1790.

[15] "Moniteur," August 28, 1790; also Levasseur, as above, pp. 139
_et seq_.

[16] "Par une seule opération, grande, simple, magnifique." See
"Moniteur." The whole sounds curiously like the proposals of the
"Greenbackers," regarding the American debt, some years since.

[17] "Moniteur," August 29, 1790.

[18] See Lacretelle, "18me Siécle," vol. viii, pp. 84-87; also Thiers
and Mignet.

[19] See Hatin, Histoire de la Presse en France, vols. v and vi.

[20] See "Moniteur," Sept. 5, 6 and 20, 1790.

[21] See Levasseur, vol. i, p. 142.

[22] See speech in "Moniteur"; also in Appendix to Thiers' "History of
the French Revolution."

[23] See Levassear, "Classes ouvrières," etc., vol. i, p. 149.

[24] See Levasseur, pp. 151 et seq. Various examples of these
"confidence bills" are to be seen in the Library of Cornell

[25] See Levasseur, vol. i, pp. 155-156.

[26] See Von Sybel, "History of the Revolution," vol. i, p. 265; also
Levasseur, as above, vol. i, pp. 152-160.

[27] For Turgot's argument against "fiat money" theory, see A. D.
White, "Seven Great Statesmen in the Warfare of Humanity with
Unreason," article on Turgot, pp. 169, et seq.

[28] See De Goncourt, Société française," for other explanations;
"Les Révolutions de Paris," vol. ii, p. 216; Challamel, "Les
Français sous la Révolution"; Senior, "On Some Effects of Paper
Money," p. 82; Buchez and Roux, "Histoire Parlementaire," etc.,
vol. x, p. 216; Aulard, "Paris pendant la Révolution
thermidorienne," _passim_, and especially "Rapport du bureau de
surveillance," vol. ii, pp. 562, et seq. (Dec. 4-24, 1795.)

[29] For statements and illustration of the general action of this
law, see Sumner, "History of American Currency," pp. 157, 158; also
Jevons, on "Money," p. 80.

[30] See De Goncourt, "Société Française," p. 214.

[31] See Von Sybel, History of the French Revolution, vol. 1, pp.
281, 283.

[32] For proofs that issues of irredeemable paper at first stimulated
manufactures and commerce in Austria and afterward ruined them, see
Storch's "Economie politique," vol. iv, p. 223, note; and for the same
effect produced by the same causes in Russia, see ibid., end of
vol. iv. For the same effects in America, see Sumner's "History of
American Currency." For general statement of effect of inconvertible
issues on foreign exchanges see McLeod on "Banking," p. 186.

[33] See Louis Blanc, "Histoire de la Révolution," tome xii, p. 113.

[34] See "Extrait du registre des délibérations de la section de la
bibliothèque," May 3, 1791, pp. 4, 5.

[35] Von Sybel, vol. i, p. 273.

[36] For general account, see Thiers' "Révolution," chap. xiv; also
Lacretelle, vol. viii, p. 109; also "Memoirs of Mallet du Pan." For a
good account of the intrigues between the court and Mirabeau and of
the prices paid him, see Reeve, "Democracy and Monarchy in France,"
vol. i, pp. 213-220. For a very striking caricature published after
the iron chest in the Tuileries was opened and the evidences of
bribery of Mirabeau fully revealed, see Challamel, "Musée," etc. Vol.
i, p. 341, is represented as a skeleton sitting on a pile of letters,
holding the French crown in one hand and a purse of gold in the other.

[37] Thiers, chap. ix.

[38] For this and other evidences of steady decline in the purchasing
power of the _assignats_, see Caron, "Tableaux de Dépréciation du
papier-monnaie," Paris, 1909, p. 386.

[39] See especially "Discours de Fabre d'Eglantine," in "Moniteur" for
August 11, 1793; also debate in "Moniteur" of September 15, 1793; also
Prudhomme's "Révolutions de Paris." For arguments of much the same
tenor, see vast numbers of pamphlets, newspaper articles and speeches
during the "Greenback Craze,"--and the craze for unlimited coinage of
silver,--in the United States.

[40] See Caron, "Tableaux de Dépréciation," as above, p. 386.

[41] Von Sybel, vol. i, pp. 509, 510, 515; also Villeneuve Bargemont,
"Histoire de l'Economie Politique," vol. ii, p. 213.

[42] As to the purchasing power of money at that time, see Arthur
Young, "Travels in France during the Years 1787, 1788 and 1789." For
notices of the small currency with examples of satirical verses
written regarding it, see Challamel, "Les français sous la
Révolution," pp. 307, 308. See also Mercier, "Le Nouveau Paris,"
edition of 1800, chapter ccv., entitled "Parchemin Monnaie." A series
of these petty notes will be found in the White collection of the
Cornell University Library. They are very dirty and much worn, but
being printed on parchment, remain perfectly legible. For issue of
quarter-"_sou_" pieces see Levasseur, p. 180.

[43] See Levasseur, vol. i, p. 176.

[44] For Chaumette's brilliant display of fictitious reasons for the
decline see Thiers, Shoberl's translation, published by Bentley, vol.
iii, p. 248.

[45] For these fluctuations, see Caron, as above, p. 387.

[46] One of the Forced loan certificates will be found in the White
Collection in the Library of Cornell University.

[47] For details of these transactions, see Levasseur, as above,
vol. i, chap. 6, pp. 181, et seq. Original specimens of these notes,
bearing the portrait of Louis XVI will be found in the Cornell
University Library (White Collection) and for the whole series
perfectly photographed in the same collection, Dewarmin, "Cent ans de
numismatique française," vol. i, pp. 143-165.

[48] For statements showing the distress and disorder that forced the
Convention to establish the "_Maximum_" see Levasseur, vol. i, pp.

[49] See Levasseur, as above, vol. i, pp. 195-225.

[50] See specimens of these tickets in the White Collection in the
Cornell Library.

[51] For these condemnations to the guillotine see the officially
published trials and also the lists of the condemned, in the White
Collection, also the lists given daily in the "Moniteur." For the spy
system, see Levasseur, vol. i, p. 194.

[52] See Levasseur, as above, vol. i, p. 186. For an argument to show
that the Convention was led into this Draconian legislation, not by
necessity, but by its despotic tendencies, see Von Sybel's "History of
the French Revolution," vol. iii, pp. 11, 12. For general statements
of theories 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.

[53] For a summary of the report of the Committee, with list of
articles embraced under it, and for various interesting details, see
Villeneuve Bargemont, "Histoire de l'Economie Politique," vol. ii,
pp. 213-239; also Levasseur, as above. For curious examples of severe
penalties for very slight infringements on the law on the subject, see
Louis Blanc, "Histoire de la Révolution française," tome x, p. 144.
For Louis XIVth's claim see "Memoirs of Louis XIV for the Instruction
of the Dauphin."

For a simple exposition of the way in which the exercise of this power
became simply confiscation of all private property in France, see
Mallet Du Pan's "Memoirs," London, 1852, vol. ii, p. 14.

[54] See Du Pont's arguments, as given by Levasseur.

[55] Louis Blanc calls attention to this very fact in showing the
superiority of the French _assignats_ to the old American Continental
currency, See his "Histoire de la Révolution française," tome xii,
p. 98.

[56] See Sumner, as above, p. 220.

[57] See Levasseur, as above, vol. i, p. 178.

[58] See Cambon's "Report," Aug. 15, 1793, pp. 49-60; also, "Decree of
Aug. 24, 1793," sec. 31, chapters XCVI-CIII. Also, "Tableaux de la
dépréciation de papier monnaie dans le department de la Seine."

[59] For the example of Metz and other authorities, see Levasseur, as
above, vol. i, p. 180.

[60] See Von Sybel, vol. iii, p. 173.

[61] See Thiers; also, for curious details of measures taken to compel
farmers and merchants, see Senior, Lectures on "Results of Paper
Money," pp. 86, 87.

[62] See Von Sybel, vol. iv, p. 231.

[63] See Von Sybel, vol. iv, p. 330; also tables of depreciation in
"Moniteur"; also official reports in the White Collection; also
Caron's "Tables," etc.

[64] For a lifelike sketch of the way in which these exchanges of
_assignats_ for valuable property went on at periods of the rapid
depreciation of paper, see Challamel, "Les français sous la
Révolution," p. 309; also Say, "Economic Politique."

[65] For a very complete table of the depreciation from day to day,
see "Supplement to the Moniteur" of October 2, 1797; also Caron, as
above. For the market prices of the _louis d'or_ at the first of
every month, as the collapse approached, see Montgaillard. See also
"Official Lists" in the White Collection. For a table showing the
steady rise of the franc in gold during a single week, from 251 to 280
_francs_, see Dewarmin, as above, vol. i, p. 136.

[66] See "Mèmoires de Thibaudeau," vol. ii, p. 26, also Mercier, "Lo
Nouveau Paris," vol. ii, p. 90; for curious example of the scales of
depreciation see the White Collection. See also extended table of
comparative values in 1790 and 1795. See Levasseur, as above, vol. i,
pp. 223-4.

[67] For a striking similar case in our own country, see Sumner,
"History of American Currency, " p. 47.

[68] See Villeneuve Bargemont, "Histoire de l'économie politique,"
vol. ii, p. 229.

[69] See Von Sybel, vol. iv, pp. 337, 338. See also for confirmation
Challamel, "Histoire Musée," vol. ii, p. 179. For a thoughtful
statement of the reasons why such paper was not invested in lands by
men of moderate means, and workingmen, see Mill, "Political Economy,"
vol. ii, pp. 81, 82.

[70] See Von Sybel, vol. iv, p. 222.

[71] See especially Levasseur, "Histoire des classes ouvrières," etc.
vol. i, pp. 219, 230 and elsewhere; also De Nervo, "Finance
française," p. 280; also Stourm, as already cited. The exact amount
of _assignats_ in circulation at the final suppression is given by
Dowarmin, (vol. i, p. 189), as 39,999,945,428 _livres_ or _francs_.

[72] For details of the mandat system very thoroughly given, see
Thiers' "History of the French Revolution," Bentley's edition, vol.
iv, pp. 410-412. For the issue of _assignats_ and _mandats_ at the
same time, see Dewarmin, vol. i, p. 136; also Levasseur, vol. i, pp.
230-257. For an account of "new tenor bills" in America and their
failure in 1737, see Summer, pp. 27-31; for their failure in 1781, see
Morse, "Life of Alexander Hamilton," vol. i, pp. 86, 87. For similar
failure in Austria, see Summer, p. 314.

[73] See Marchant, "Lettre aux gens de bonne foi."

[74] See Summer, p. 44; also De Nervo, "Finances françaises," p. 282.

[75] See De Nervo, "Finances françaises," p. 282; also Levasseur,
vol. i, p. 236 et seq.

[76] See Table from "Gazette de France" and extracts from other
sources in Levasseur, vol. i, pp. 223-4.

[77] Among the many striking accounts of the debasing effects of
"inflation" upon France under the Directory perhaps the best is that
of Lacretelle, vol. xiii, pp. 32-36. For similar effect, produced by
the same cause in our own country in 1819, see statement from Niles'
"Register," in Sumner, p. 80. For the jumble of families reduced to
beggary with families lifted into sudden wealth and for the mass of
folly and misery thus mingled, see Levassour, vol. i, p. 237.

[78] For Madame Tallien and luxury of the stock-gambler classes, see
Challamel, "Les français sous la Révolution," pp. 30, 33; also De
Goncourt, "Les français sous le Directoire." Regarding the outburst
of vice in Paris and the demoralization of the police, see Levasseur,
as above.

[79] See Levasseur, Vol. i, p. 237, et seq.

[80] For specimens of counterfeit _assignats_, see the White
Collection in the Cornell University Library, but for the great series
of various issues of them in fac-simile, also for detective warnings
and attempted descriptions of many varieties of them, and for the
history of their Issue, see especially Dewarmin, vol. i, pp. 152-161.
For photographic copies of Royalist _assignats_, etc., see also
Dewarmin, ibid., pp. 192-197, etc. For a photograph of probably the
last of the Royalist notes ever issued, bearing the words "Pro Deo,
pro Rege, pro Patria" and "Armée Catholique et Royale" with the date
1799, and for the sum of 100 _livres_, see Dewarmin, vol. i, p. 204.

[81] For similar expectation of a "shock," which did not occur, at the
resumption of specie payments in Massachusetts, see Sumner, "History
of American Currency," p. 34.

[82] See Thiers.

[83] See Levasseur, vol. i, p. 246.

[84] For examples of similar effects in Russia, Austria and Denmark,
see Storch, "Economie Politique," vol. iv; for similar effects in the
United States, see Gouge, "Paper Money and Banking in the United
States," also Summer, "History of American Currency." For working out
of the same principles in England, depicted in a masterly way, see
Macaulay, "History of England," chap. xxi; and for curious exhibition
of the same causes producing same results in ancient Greece, see a
curious quotation by Macaulay in same chapter.

[85] For parallel cases in the early history of our own country, see
Sumner, p. 21, and elsewhere.

[86] For a review of some of these attempts, with eloquent statement
of their evil results, see "Mémoires de Durand de Maillane," pp.

[87] For similar effect of inflated currency in enervating and
undermining trade, husbandry, manufactures and morals in our own
country, see Daniel Webster, cited in Sumner, pp. 45-50. For similar
effects in other countries, see Senior, Storch, Macaulay and others
already cited.

[88] For facts regarding French finance under Napoleon I am indebted
to Hon. David A. Wells. For more recent triumphs of financial
commonsense in France, see Bonnet's articles, translated by the late
George Walker, Esq. For general subject, see Levasseur.

THE BANK OF NEW YORK, established in 1784, was the only Bank in
existence in the city of New York at the time of the French experiment
with fiat money.

one-hundred and fiftieth anniversary in March, 1934, considers it a
privilege to be able to distribute some copies of this scholarly
article of the late Andrew D. White. The article emphasizes the fact
that the use of fiat money in France was in its beginning a sincere
effort on the part of intelligent members of the National Assembly to
stem the tide of misery and wretchedness which had brought about the
Revolution in 1789. But the article also shows clearly that once
started on a small scale, it became utterly impossible to control the
currency inflation and that after some slight indications of
improvement in conditions, the situation went from bad to worse. In
the long run, those most injured were the people whom it was most
desired to help--the laborer, the wage earner and those whose incomes
from previous savings were smallest.

ANDREW D. WHITE had a long and distinguished career as educator,
historian, economist and diplomat; his description of the events in
France that followed the experiment with fiat money is intensely
interesting and well Worth the attention of every thinking person in
the United States of 1933.

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