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Froni President A. D, White' "Paper Monoy Iuflation in Fiance," puVi.-lieil ly D. App'etoa & Co., New York.] Near lbo end of the year 1789, tbo Frencb aation foimd itself ia deëp financial embarrassment ; (hcro was a hea y dcbt aud ft serious deficit. Tbo vast reforma of tbat year, though a lastDg blcesing politically, wero a (emporaTy ovil inancially. Tbero wan a general want of conidenco in businei s roles ; capital bad sbonn te proverbial tin-:dily by retiring out of sight as far as passible ; but little money wan in c'irculation ; througbout tbc laud was temporary stagnation. Statexman-Mko measuren, carcful wctching and wise management would probably have ?d, ere long, to a reti'rn of confidence, a rtappeaiancc of monoy and resumptiou of business ; but this ihvolved waitiug. self-denial ard self-saciitioe, and thU3 far in human history those aro the rarest producta of an improved political coudition. t'ew uations, up to tbia time, have been able to exercise these virtues. and France waj not one of thoso few. Tbere was a general looking about fcr sonie short road to prosperity, and ero long the idea was set ofloat that tbe gruat want of the country was more of tho circulating medium; and thia was speedily followed by calis for an issue of paper money. Tiie Minister of Fiuar.ce at this period was Necker. In finar,cial ability he was aclsnowledged among the great bankerö of Europe ; bnt he had comethiug more tban fiuancial ability - he had a deep fetling o! patriotii-m and a high sonso of personal honor. The d mculties in bis way were great, but he steadily endeavored to keep Franco faithful to thote ünancial jriuciples which the general expeiience of modtrn times had establisbcd as the only path to national safety. As diiiiculties aroso tho National Assembly drew away from him, and soon carne amoug the members muttered praises of paper monty; members like Allarde aud Gouy held it up as a panacea - au a way of " securing resources without paying interest." This was ccboed outside; tbo journab'üt L -U'talot caught it up and proclaimed its beauty; Marat, in bis newspaper, alrO joined the cries against Necker, picturing him - a man wbo gave up bealth und fortune for the sako of Franco - as a wretch seeking only to enrich himself from tbe public puríe. Against the tendency to tho issue of irredeemable paper Necker contended as beBt he might. He knew well to what it had always led, even when snrrounded by the molt skillful guaranteew. Among those who struggled to aid Necker outside the National Assombly was liergasee, a Deputy from Lyons. His pamphlets against an irredeemable paper exerted, perhaps, a wider intluence than any others; parts of ihem seem fairly intpired. Any ono to-day reading his prophecics of the evils sure to follow such a curreney would certainly ascribe to him a miraculeus foresight, wero it not that we can see that this prophetic power was Birnpiy due to a knowledgo of natural laws. But tbe curreut was too strong ; on the 19th of April, 1790, the Finance Committee of the Assembly reported that " the people demand a now circulating medium;" that "the circulation of paper money is the best of oporations;" that "it is the most free because it reposes on the will of tho people;" that " it will bind tho interests of the Citizens to the public good." The report appealed to the patrioliem of the French people witb the following exbortation : 'Let U8 show F.urope that we undtrdtand our owu resources ; lot us immediately take tbe broad road to our liberation, instead of dragging onr?elvos along the toriuous and obscure path of fragmentáis loan.s ;" it concluded by reconimending an issue of paper money, carefully guarded, to the amouut of 400,000,000 francs. The next day the debate begins. M. Marüneau is loud and long for paper money. His only fear is that the committee liae not authorized enough of it ; he declared that butiness is stagnant, and that tho solé cause is a want of more of the eirculating medium ; that paper money ought to be made a legal tender ; that the Assembly ehould rife above the prejudices which the failure of John Law's paper money had caused. Like every supporter of irredeemable paper money, before or since, he thiuks tbatcircunistances are not the same at tho time and place of tbe issuo proposed as at previous disastrous issues. He says : 'Taper monoy under a despotism is dangeroiis ; it favors corruption ; but in a nation constilutionally governed, which itself takes care of the emissión of its notes, wlrch determines their number and use, tbat daugerno longerexists." He insistí that John Law's notes at first restored prosperity, but the wietchedness and wrong they oaused resulted from their overissue, and that such an over-issue is possible only undcr a despotism. M. de la líochtfoucauld giveshis opinión that "the assignatí will draw specie out of tho coffers where it is now hoarded." On the other hand, Cázales and Maury show that the result can onlybodisastroas. Nover, perhaps, did a political prophecy meet witb. more exact fulfillnient in every line than the terrible picture drawn in one of Cázales' speeches iu this debate. Still the current rau stronger aad stranger. Petion makes a brilliant oration iu favor of the report, and Necker's intiufnco Liid experitnee are gradually worn away. . . . But it would bo a great mistake to snppose tbat tbe statetmen of France, or the Freuch people, wero ignorant of the daugcr of ipsuing irredet mable paper money. No matter how skillfuüy the bright fidfl of sucha currency was tilnlittd, all thoughtful men in France knew bometbing of iu dark side. They knew too well, from that foarlul experience in John's time, the difliculties and dangers of a curreney not based upon specie. They had Uien learned how easy it is to if sne it ; how dimcult it is to check an over-issue; how seductiely it leads to the absorption of the means of the workingnicn and men of small fortunes; how surely 11 m:poverishes all men hvii:g onfixed incomes, salaries, or wages; how it creates on the ruins f the prosperity of all woikingmen a unall cl its of debauched speculators; how it stimulates overprodu -útn at first, ai.d leaves overy industry fl ïccid aftcrward; huw it breaks down tho idea of thriit, and develops political aud R' cip.1 immoralitv. AU this France had been th n uh!y tauglit by experience. Aud it would also be a mistake to Mipposc that tbo Natiouul AyKe:]ibly whfc'i discusscd tbis matter was oomposed ut mete ild revolutiouiath'; no suppo.ition could bj n ore wido of tne fact. Iu it wero such men as Sirles, Tïailly, Necker, Mirabtau, Tal'eyrai.d, Dupont, and a multitnde of otbt-rá who, in various aciences and in the political world, had already BhowD, and were destioed aftorward to sliow, tbimselves mong the kt-entjst ünd ttroDgest men that Eui'oi)e bas yet seen. But tbc cu lont toward paper money had become irresMib'e. Oralory prevailed over ex))erience aud BOfenoe. Iu December, ] 789, cime tho first derrec. After nmcb discussion it ua docidjd lo iiiue 40n,OUO,UOO franca íq paper money, based upon iho landed property of the nation as its security. In April. 1710, the 400,000,000 francs werossued in assignats - paper money secured by a pledgo of productive real estáte (tbo coríincated et-tates of the French ohuroii, valuud at 4,000,000 000 franc), and neariüg interest to the hoMer at !i per cent. No irredoomablo curreucy nas ever claimed a moro scientitic and practioal guaranteo for its goodness aud for it proper action on public finances. On one pide it b:id what tbe world universally recogmzecl as the most practical secnrity - a mortgage on prodéetiye real estáte of vanily groater valuu thflú Iha issue. Oa the other hand, &s tbenotu bori! interest, thero vas every reason for thoir beiug iihdrawii frnm oircnlatiun whtneviT they bocame ndundaot. As speouüy as possil Ie the notos wero put in circulation. Uiibkothoss isgaediu John Law'ri tiine, they were -ngrav d in th) bent stjle of the art. Xo etinmltite loyalty, the portralt of the King wits placed in the contev ; to stnmilato patriotn-m, pn 'nutio Itgtnds and embkms turromidtd him : to stimulate public oupidity, tbe an o'int of interest which tüe noto ïvould jicld tach da to ho!döi' was pviuted in tbc margin ; aud the nhole was dnly garni.-hed with stBnip and signatures, showing that it was U'id :■ '-,.! :ful r, Liritration and ejutrol. Havii g t Ij ti 8 given Frai.cj a new cunvncy, the Natinnal Assembly, to éxplain its anvantages, isEnied fln addroflB to tbe French people. In this nllrt-s tbc AsPemlly Bpoke of the natiou as "di livered bv tbis grand mea:. s ffom alt uncertaiaty. and from all luinous rcsults of tho credit systom- :uoe8santly a ]roy to tho caprices óf cupidity." It forelold that this issue " would bring "back into tbe pub';c treasury. iuto commeroe, ai.d into all branches of industry, strength, abmidanoe and prosperity." Some of tbo argnments u.-:ed in this addross are worth reca'.Hug : 'l'apir money is without inherent value. unlosi it represente somc special property. Without repreeutiug some special property it is Inadmiible in trade to cor-pete wit'i a metallic cmrency, wbich has a value real and independent of the public action ; thirefore it is that the paper money which bas only tho public authorïty ;ts it basis bas always caused r(ü:i where it bas been establisbcd ; that is the roason wby the bank notes of 1720, issued by John Law, aftcr baving caused terrible evils, have only left frightful memories. Therefore it is that the National Assembly has not wibed to expose you to this danger, but bas given tbis new paper mono', not ouly a vahío derived from the uational authority, but a valué real, immutable ; a valué whjch permits it id eustain, advantageouBly, a competition with the preoious metala thomeelvee." Dat the fiual declaratlOn iü perhaps the most intereeting, as showing tho attempt to rely on i:itereHt-benxing notes, or an irredeemablo issue of notes baned upan valnable socuritios. It argUos : "These asi-ignats, hearing interest as tbey do. will soon be considercd bettwr than the coin now hoarded, and si]] again bring il out into circnlation." The flrnt result of this issue was apparently all that tho inost sanguina cmi'd desire ) the troasui-y was at once greatly relieVed; a por' tion of tho public debt was paid; croditots were cndouraged; credit revived ; ordinary expenses were and, the paper möney ha'ring thus been passed from tho Governriieiit into the midst of tho people, trado was revived, and all diftioultios scemed past. The anxieties of Necker, tho prophecies of Bergaase, Haury and Cázales, eeeraed proved utterly futile. And, indeed, it is not impos-iblo tliat, if the national autboritieshad gtoppcd with thisUsue, few of the evils wbich afterward arose woma havo been sevcrely feit the 400,000.000 fraucj of paper mouey then isotiod had simply taken tho place of a timilar amount of specie; but Roon there came auother rosult more disnuluting; tillles grew less ea-yt by thu end of Au gust, witbin four months after the issue of the 400,000,000 asnignatn, the Oovernttient had spent tlutm, and was again in di3tres. The old remcdy iinmediatoly and naturally occurred to the nniicls of men. Thoughtless persons throughout the oouutry began to cry out for auother ia.-Ue of paper) thoughtful rcen then began to recall what their fathors had told them about the seduclive palh of paper-money issues in John Law's time, aud to romember' the prophoeieü that thcy themselves had lieard in the debate on the flrst issuoof aesignats Iess than six months bofore. In that debate, as we have seen, Maury and Os zak s forelold trouble and danger. Necker, wbo was Iess suspected of react'onary tendencie, bad certainly fearcd mauy. Tho strong opponentBOf paper had prophesicd at that time that, once on the downwaru path of inflatiou, the nation could not bo restrained, and that more istues would follow. Tho supporters of the flrst issue had asserted that this was a cilumny; that Franco couM and would check these issue whenever she desired. Tho condition of opiDion in the Assembly was, therefore, chaotic; a few schemors and dreamers wore loud and ontspoken for paper mouey; many of the more shallow and oasyiroing were inclined to yield ; the more thoughtful eudeavored manfully to breast the current. Tho queslion was brought up by Montesquiou's rcrort oa the 27th of Augnst. This report, though Bomewliat non-cominittal, leaned, on the whole, toward an additional issue of paper. It gees on to declare that the original issue of 4)0,000,000, though opposod at the begiuning, had proved BueceaBf ui ; that assignats are the moht economical method, though they have dangers: and, as a climax, came the declaration, " We must save the country." Still the committee hesitated to advise the sbuo of more paper money. Upon this report, on the 27th of August, 1790, Mirabean made bis firet speech. He confessed that he liad at first feared the issue of assignats, but tbat he now dared urge it: that experience had sliov.n that the issue of paper nioDey had served its p-irpose well; that the repert proved, despite the prophecies of various opponents, that the first issue of asignats had been a great suceess; tbat public affaire had come out of dibtresa sath-factorily; that ruin had been averted, and credit established. He then argües that there is a difference betweeu the paper money of the old sort, from which tho nation had suffered so nmeh in John Law's time, and the paper money of the new isKiie; he declares that the Freiich nation is now enlightened, and says, " Deceptive subtleties can no longer deceive patriots and men of sonse in this matter." He then goes on to say, " We must accomplish that which we have begun," declaring that there is demandec anotlier large is ue of paper, guaranteed b; I the national lands and by the good faith of the French nation. To show how practical the s ptvni is, he insista that just as soon as paper money ahall become too abundant it will be absorbed in rapid parebases of naiional lands and a very striking comDarison is made between this self-adjasting, Felf-ccnvertinj, system and the rains descending ir showers upon the earth, then in swelling rivers disebarged into the sea. then drawn up in vapor, and gradually ecattered over the earth again in rapidly fertilizing ehowers. He predlcts that the members will be surpriped at the at-tonihbing euccess of this paper money, and that there will be no superabundance of it. Hia theory grows by what it feeds upon, as the paper-money theory has always done; toward tho close, iñ a burst of eloquence, he suggestu that assignats be created to an amount sumcient to cover tho national debt, and that all theDational lands beexposed for sale immediately, predieüng that prosperity will thus return to tho nation, and that ail 1 classes will find this additional iasne of paper ! money a great blcssing. This speech was frequently interrnptcd by ' applause; by a unanimous vote it was ordered printed, and copies were spread throughout France. The iaipulso given it eau be seen throughout all the discussion afterward. Gony arises aud proposes to liquiiate the debt of 2,400,000,000, to use bis own words, " by one single operation - fjrand, simple, magnificent.' I He supports au cmiesion of 2,400,000,000 ia legal-tcuder notes, and a law that specie be not accopted in purchasing national lands. His demagogism blooms forth magnificently. He advocates an appeal to the people, who, to use his flattering expression, " ought alone to give the law in a matter f o interesting." Thenewspapers of the period, in reporting his speech, noto it with the very significant remark, " This diecourse was loudly applauded." To him replies S&varm. He oïlls attentiou to the deprecia lion of assiguats already feit. Hé tries to mske the see that natural laws work as certainly in France as elseirhere : and predicts that, if this new issue be made, there will come a dopreciation of 30 per cent. He is followed by the Abbe Gouttes, who declares- what Sïems very groteeque to those who hivo read the history of an irredeemable paper cnrrency in any country - that new issues of paper money ' ■ will mppíy a circulating material which wjll protect public morals from conuption." Into the midst of the debate is brought a report by Necker. Most earaestly he endeavors to ditsuade the Axstnibly from the proposed issue ; sugKests that otber meaus can be fonud for accomplishing the result, and predicts terrible evils. 13ut the curronc is agam ruuning too f ast. The only ïesult is, that Necker is spurned as a man of tho past, He at lust eend in hia res;gnatiou, and loaves Fiance forefer. The paper-money demagogues shout for joy at bis departure ; their chorus rings tbrough tho journalitm of the time. No words can express theircontemptfor a man who cannot seo the advantoge of ti'hng the treasury with the issues of a printing press. Jlarat, Hebert and Cimille Desmoul'ua are ospocially jnbiiant. Continuing the debate, liowbell attacks Necker, sayiug that ssig:iats are not at par because thero is not money enough ; he asks that payments for public Knds te received in usíi)ats alone; and suggests tbat for tbe makmg of chango ihe church bella of th? kingdom he meitod down into small money. On the other hand, appeared in the leading paper, the Moniteur, a very thoughtful artielo against paper money, which butus up all by sayiiig, " It is, then, evident that all paper which cannot at the will of tbe bearer be converted iuto specie cam.ot diFcharge the functions of money," and goes on to cite Mirabeau's foimer opinión in hia letter to Gerutti, pnbliabed in 1789- the fameus opinión that "paper money is a nursery of tyranny, conuption and delut-ions ; a vcritablo Oï.'gy of atithority in delirium." Lablacho, in the Asaembly, quotes the saying that " paper money is the emetic of great statea." Boutidoux foUows in favor of paper money; and cails the assignats "un papier Ierre," or land converted iuto paper, ISoisandry auswors vigoroualy, and forotells BOme i:vi! i-chuHs cleaily. . . . The nation at iargo now began to take part in the debato ; thoughtful men saw that hore was tho turning-point between good and evil ; that tho nation stood at tho partiug of the ways. Most of the great commereial citiea bestirrcd themselvts and ' seutnp remnntrancea against the new emisi fion, twenty-five being opposod aud even in ! fa ver of it. ' But on Sept 27, 1790, came Mirabeau'd gieat final fpeecb. In tliis he dwolt Brst on iho polüical uccessity involved, declari ing that tho most pressing uecd was to get the Government lans iuto the hands of the people. and üo to commit the class of landholders thna creited to the nation, and against tbe old privüeged chases. Through tho rest of Iho epeech there is oue leading po:nt enf jreed with all his tloqaeDcfc and ingennity - he thorough excellence of tho proposed curreucy and tlie etabüily of ita security. Ho declares that, being based on tho pkdge of piiblic lanip, and convertíale into them, the notes are better secnred than if rdeemib)c in specio ; that the prenlotta metáis are only employed in tho aecondary nrts, while tho French paper represents tho drs' and most real of all proparty, the source of all p"oduction, the land itself ; that, wlnlecther uatioUS have boen obliged to emit paper money. nono has ever been so fortúnate as the Frenen nation, for aeree has any other nation been ablo to give laoded security for its paper ; that whoever takes French paper money naa iractically a mortgago to secure it on lauded property which can be easily sold t siiti-ify bis claim-i, while othor nations havo only been able to givo a vaguo claim on the entiro" nailon. "Aud,"h cries, "I would rather havo a mortgage on a gárden tnan oa a kingdom !" Otber arguments of his are more demagogical. Ho dt clares that tbo only interest affecied wilJ be those of bankers and capitalist, but tnat manufaclurers will seo prosperity rtstored to them. Some of bid arguments seem almost puerile, as when he says : "If gold bas been hoarded through timidity or u: ■!., nliy, tl. e issuoof paper will show that gold s not neoessary, and it will then come forih." lint, as a whole, tho speech was bril'iant ; it wat often interrupted by ap;-lause : it settled the (niestion. People did not stop to OOnsldei that this w;is the dasliing speech of a boíl orator, nnd not the maturo i judgment of au export in financo ; tinsj did not sec that calling Mirabeau to decide upon a fluaccial policy, beauee he had shown boldness in daDger and trongth in conflict, was liko ealliug a artccensul blftcksmlth to mend a watch. On the aotli of September, by a voto of 568 o 423, the eed ttae done. A bilí wa passed authorizing the isatie of 00,000,000 of new assignatp, bilt solemnly declaring that in no cate shotlld tilo entire arnonnt put iu circulaion exceed J,200,000i To make ansiirauce doubly suro. it also proridsd that, ae faat as he assignats were paid iuto the treaeury for and they should be burned, and thus a heallhM ontractlonbe coiittantly maintained. Great were tho plaudite of tho r.atiou at thie relief, liejolcluji wero heard on every side. Among the mnltitnde ut pnmphlcts expreeeing his joy which have come down to us, tho ' Frienfl of, the licTOÜition'' ia the most interoeting. It bcglhfl a follows ! " Citizenc, the deed ili üone, The aislgnats are the keystone of tho arch. tl bas jnst been lappily put in position. Now I eau nmioiinoo o yon tbat the revolution is finiaheJ, and hero only remain oue or two important quesions. All the reat ia but a matter of detail whioh cannot deprive us any looger of the ileasuto of admiring in it enlirety this imlortant work, The provínoos and commercial iities, which wore at first alarmed at the proposal to issue ao mnch papet nionoy, uow nend preüsiotiB of their tnankn ; specie ia coming out to be joincd tritb paper money. Foreigners come to us from all parta of Europe to seek their happinesa under the laws which they admire : and Boon France, enriched by her new property and by the national industry which is preparing for fruitfulneas, will demand atill inotbcr creation of paper money." To make these prophecies good, every meaus was taken to keep üp the credit of thirt second issue of asaignati". Among the mnltitude of pamphlets iïsned for thia purpose wa one by Hoyer; it appeared Sept. 14, 1790, and was entitled, "lieflections of a Patriotic Citizen upon the Eoiission of AtHignats." Ia this Royer yives many excellent reasons wby the asBignata cannot be depressed; speaks of tho argument againat them as " vile clamors of people bribed to affect public opinión." He sayd to the National Assembly: "If it is necessury to créate 5,900,000,000 and more of this pafer, decree such a croAtion gkdly." He, too, preaiets, as Mirabeau and others had done, the time when gold will José all its value, since all exchanges will be made with this adroirabiy guaranteed paper, and therefore that coin will come out from tho places where it is hoarded. He 'oretells pronperous times to France in caao these great issues of paper are continued, and declaros this the only means to insure happiness, glory and liberty to the French uation." [to be continued.]


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