Fiat Money Inflation in France: How it Came, What it Brought, and How it Ended — John Shaqi
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
This great debtor class, relying on the multitude who could be
approached by superficial arguments, soon gained control. Strange as it
might seem to those who have not watched the same causes at work at a
previous period in France and at various times in other countries, while
every issue of paper money really made matters worse, a superstition
gained ground among the people at large that, if only _enough_ paper
money were issued and were more cunningly handled the poor would be made
rich. Henceforth, all opposition was futile. In December, 1791, a report
was made in the Legislative Assembly in favor of yet another great issue
of three hundred millions more of paper money. In regard to this report
Cambon said that more money was needed but asked, "Will you, in a moment
when stock-jobbing is carried on with such fury, give it new power by
adding so much more to the circulation?" But such high considerations
were now little regarded. Dorisy declared, "There is not enough money
yet in circulation; if there were more the sales of national lands would
be more rapid." And the official report of his speech states that these
words were applauded.
Dorisy then went on to insist that the government lands were worth at
least thirty-five hundred million _livres_ and said: "Why should members
ascend the tribunal and disquiet France? Fear nothing; your currency
reposes upon a sound mortgage." Then followed a glorification of the
patriotism of the French people, which, he asserted, would carry the
nation through all its difficulties.
Becquet, speaking next, declared that "The circulation is becoming more
rare every day."
On December 17, 1791, a new issue was ordered, making in all twenty-one
hundred millions authorized. Coupled with this was the declaration that
the total amount in actual circulation should never reach more than
sixteen hundred millions. Before this issue the value of the 100
_livres_ note had fallen at Paris to about 80 _livres_; [38] immediately
afterward it fell to about 68 _livres_. What limitations of the currency
were worth may be judged from the fact that not only had the declaration
made hardly a year before, limiting the amount in circulation to twelve
hundred millions, been violated, but the declaration, made hardly a
month previous, in which the Assembly had as solemnly limited the amount
of circulation to fourteen hundred millions, had also been repudiated.
Public-domain text, read in full here on John Shaqi.
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