Happy Bastille Day: Fiat money in the French Revolution


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  • Perhaps not well remembered is the monetary adventure of the French Revolution

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  • “After the printing press, the guillotine.”

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  • “The Convention on November 13, 1793, suppressed all commerce in the precious metals.”

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Perhaps not well remembered is the monetary adventure of the French Revolution, so in honor of Bastille Day, here are some excerpts from Fiat Money Inflation in France (published in 1896, when the French Revolution was fresher in mind than now). The author, Andrew Dickson White, was in his day president and professor of history at Cornell University, as well as minister of the United States to Russia and ambassador to Germany. He was not, it appears, a strong proponent of the inflationary printing of fiat currencies.

“In April, 1790, came the decree to issue four hundred millions of livres* in paper money, based upon confiscated property of the Church.”

“The opponents of paper had prophesied that once on the downward path of inflation, the nation could not be restrained … The supporters had asserted that the people were now in control and that they could and would check these issues whenever they desired.”

“France was now fully committed to a policy of inflation; all doubts were removed now by various acts very significant as showing the exceeding difficulty if stopping a nation once in the full tide of a depreciating currency. The Nation Assembly had from the first shown an amazing liberality to enterprises which were urged ‘for the good of the people.’” [One cannot help but think: housing.]

“In speeches, newspapers and pamphlets, we begin to find it declared that, after all, a depreciated currency is a blessing.” [Two centuries later, the Federal Reserve has formally committed itself to constant inflation in perpetuity.]

“By this the prices of everything were enhanced save one thing, and that one thing was labor. … No more striking example can be seen of the truth uttered by Daniel Webster, that ‘of all the contrivances for cheating the laboring class of mankind, none has been more effective than that which deludes them with paper money.’”

“In view of the steady rise in prices of the necessaries of life, St. Just had proposed a scheme by which these prices should be established by law.”

“The Convention decreed that any person making a difference in any transaction between paper and specie,** should be imprisoned in irons for six years—that any one who refused to accept a payment in paper money, or accepted paper money at a discount, should pay a fine of three thousand francs; and that any one committing this crime a second time should pay a fine of six thousand francs and suffer imprisonment twenty years In irons.”

“Later, on the 8th of September, 1793, the penalty for such offenses was made death, with confiscation of the criminal’s property, and a reward was offered to any person informing the authorities regarding any such criminal transaction.”

“The Convention on November 13, 1793, suppressed all commerce in the precious metals.” [Recall that the government of the United States made owning monetary gold a criminal offense in 1933, punishable by up to ten years in prison. This parallel to 1790s Paris lasted to 1974.]

“No enactments could stop the downward tendency of this new paper.”

“On August 1, 1795, the gold louis*** of 25 francs was worth in paper, 920 francs; on September 1st, 1,200 francs; on November 1st, 2,600 francs; on December 1st, 3,050 francs. In February, 1796 it was worth 7,200 francs, or one franc in gold was worth 288 francs in paper. Prices of all commodities went up nearly in proportion.”

“So came upon the nation the obliteration of thrift.”

“Out of the inflation of prices grew a speculating class.”

Finally: “The wild radicals, having sent to the guillotine first all the Royalists and next all the leading Republicans they could entrap, the various factions began sending each other to the same destination.”

So the French saying goes, “After the printing press, the guillotine.”

Happy Bastille Day!

Alex J. Pollock is a resident fellow at AEI.

*The “livre” (“pound” in English) was originally a unit of silver currency. **Coin ***A gold coin

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