Fiat Money Inflation in France: How it Came, What it Brought, and How it EndedWhite, Andrew Dickson
History
Fiat Money Inflation in France: How it Came, What it Brought, and How it Ended
White, Andrew Dickson
Assignats; Inflation (Finance) -- France -- History
Still another favorite idea was that British emissaries were in the
midst of the people, instilling notions hostile to paper. Great efforts
were made to find these emissaries and more than one innocent person
experienced the popular wrath under the supposition that he was engaged
in raising gold and depressing paper. Even Talleyrand, shrewd as he was,
insisted that the cause was simply that the imports were too great and
the exports too little. [28] As well might he explain that fact that,
when oil is mingled with water, water sinks to the bottom, by saying
that this is because the oil rises to the top. This disappearance of
specie was the result of a natural law as simple and as sure in its
action as gravitation; the superior currency had been withdrawn because
an inferior currency could be used. [29] Some efforts were made to remedy
this. In the municipality of Quilleboeuf a considerable amount in specie
having been found in the possession of a citizen, the money was seized
and sent to the Assembly. The people of that town treated this hoarded
gold as the result of unpatriotic wickedness or madness, instead of
seeing that it was but the sure result of a law working in every land
and time, when certain causes are present. Marat followed out this
theory by asserting that death was the proper penalty for persons who
thus hid their money.
Still another troublesome fact began now to appear. Though paper money
had increased in amount, prosperity had steadily diminished. In spite of
all the paper issues, commercial activity grew more and more spasmodic.
Enterprise was chilled and business became more and more stagnant.
Mirabeau, in his speech which decided the second great issue of paper,
had insisted that, though bankers might suffer, this issue would be of
great service to manufacturers and restore prosperity to them and their
workmen. The latter were for a time deluded, but were at last rudely
awakened from this delusion. The plenty of currency had at first
stimulated production and created a great activity in manufactures, but
soon the markets were glutted and the demand was diminished. In spite of
the wretched financial policy of years gone by, and especially in spite
of the Revocation of the Edict of Nantes, by which religious bigotry
had driven out of the kingdom thousands of its most skillful Protestant
workmen, the manufactures of France had before the Revolution come into
full bloom. In the finer woolen goods, in silk and satin fabrics of all
sorts, in choice pottery and porcelain, in manufactures of iron, steel,
and copper, they had again taken their old leading place upon the
Continent. All the previous changes had, at the worst, done no more
than to inflict a momentary check on this highly developed system of
manufactures. But what the bigotry of Louis XIV and the shiftlessness
of Louis XV could not do in nearly a century, was accomplished by this
tampering with the currency in a few months. One manufactory after
another stopped.
Public-domain text, read in full here on John Shaqi.
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