The daily gazette., 1875-08-02
HISTORY OF THE FRENCH
ASSTGNAT TSs
A GIGANTIC EXPERIMENT IN THE lssUl
OF PAPER MONTY.


From the Cincinnati Commercial.
The most gigantic scale on which
the issue of paper money irredeemable
in specie was ever exemplifed occurred
in the last decade Of the eighteenth
century in France, Untaught by the
then recent experience of the Ameri-
can colonies, and by the older and
equally bitter experience Of England
in the South Sea bubble and OF France
herself In the time of John Law and
the Mississippi scheme, the French
Republic rushed to the EXTREMIST
verge of madness in the issue of
torrents of paper money for whose ul-
innate redemption no adequate provi.
sion was made.
The theory upon which the issues of
French assSgnats were based was ori
ginated in England In 1895, and deve-
loped to its utmost perfection by the
celebrated John Law. This patron
| saint OF the infationists, whose dis.
graceful history as fnancier ought
to be a warning to all who are now
blowing similar bubbles, was aScotch-
man, who carried out most of his ideas
! in Paris, about the year 1720. The
JohnlLaw doctrine Of Finance, ,succinct.
ly stated is this:
"That if paper currency, not con-
vertible into specie, be based or secur-
ed upon any article of value, such as
land, and be issued to an extent not
greater than the value in specie of
such article, such paper currency will
not be deprecated in comparison to
specie.
1t was this theory, developed in
Laws treatise on Money and Trade,
and was carried out almost literally in
the issue of the dssig7sats. The assig
mats were nothing, but paper currency
not convertible into specie, for the
security and redemption of which Ger.
tain lands were assigned or pledged
Hence the name.
The French Monarchy, when over
thrown by the Republic, left its sole
financial legacy an enormous debt and
bankrupt treasury. In 1889, the
States General being in session, Talley-
rand brought forward motion to con-
| fiscate the whole of the ecclesiastical
property of the Kingdom, and, after
reserving portion of the clergy, to
appropriate the remainder to public
necessities. This radical measure,
though vehementIy opposed, was car
ried by a majority Of 56S to 341. The
aggregate of this property was estima-
, ted at two millards of francs "a millard
! is thousand millions), that is, at
four hundred millions of dollars, and
the sale of it was expected to produce
sufficient means to carry on the Gov
/ ernment with all its expenses.
But no immediate purchasers could
be found for this immense property, so
the Assembly decreed, on the 18th of
December, 1889, that paper currency
should be created, and based upon 1t,
to the amount of four hundred million
of francs, hearing five per cent. inter.
est, and called asSfgnats. By subse.
quent decree those assignGts were de.
clared legal tender. But the relief OBJ.
tanned by the first issue of Qssig1ats
was too tritiing to last long, and the
case with which twas procured caused
a speedy recurrence to the same re-
source. In September, 1890, the pay
ments Of the public debt could no
longer be made. Financial debates
occupied the Senate daily. Mirabeau
! proposed to create new 'assignats to
| double the amount of the former is
sues. This discussion both in the As
sembly and in the daily journals, was
most animated. Admirable speeches
were made by Talleyrand, NORM and
others, showing the ruin and misery
the forced issues of currency were GER
tain to bring upon France. Dupont
de Nemours warned them in most Wig
! orous language Of what the consequences
would be. He said: .is4
"You have striking example be-
fore your eyes. There was, ten years
ago, In the United States of America
q paper currency secured, like the one
you propose, on the honor and loyalty
of the whole Republic, and ON an enor-
nous amount of landed property,
Thus the assignats became legal
tender, non-interest bearing green.
back. only that 1t was based on landed
property Of fixed value, instead of on
the credit of the government. The
depreciation of these dssignGts began
within two months of their first issue.
Specie was boarded and began to dis
appear. Exchange on London rose to
90 per cent, then to "A per cent, and
then to 27a per cent. A few million
of dssiqlaats, however, were from time
to time converted into land and burnt.
By the time two milliards and half
Give hundred millions dollarsl had
been created, the sum of sS4, ,O00, 900
| francs had been retired. On these
facts being made public, prices fell,
the assigndts appreciated. and exchange
on London was subject to very violent
| fluctuations. In 1899, new Issues of
1 600, ,OOO, 900 were decreed, and the
maximum again raised to 2, 400, ,000,-
OOO.- Directly after, the'assignats were
at discount of thirty per cent, and