The Assignat

[From President A. D, White'B "Paper Money Inflation in France," published by I). App'eton & Co., New Tork.] [CONTINUED.] The nation was now fully eommittod to a polioy of infl&tion ; and, if there had beou any doubt of this before, it was soon proved by an act of the Government, very plausible, but none the less significant, as showing the exeaeding diffieulty of stopping a nation once in the full tide of a depreciated currency. The old cry of the ' ' lack of a circulating medium" brolie forth again ; and especially loud were the clamors as to the need of moro small bilis. This resulted in an evasión of the eolemn pledge that the oircalation shonld not go above 1,200,000,000, and that all assignats returned to the treasury for land should immediately be burned. Within a short time there had been received into the treasury for land 160,000,000 francs in paper. By the terms of the previous acts this amount ought to have been retired and taken out cf circulation. Instead of this, under the plea of necesuity, 100,000,000 were reissuod in the form of small notes. Yet this was but as a drop of cold water to a parched throat. Although there was already a rise in prices which showed that the amount needed for circulation had been exceeded, the cry for " more circulating medium" was continued. The pressure for new issues became more and more strong. TheParisian populace and the Jacobin Club were especially loud in their declarations ; and a few months later, wilu few speeches, and a silence very ominous, on July 19, 1791, a new if sue was made of G00,000,000 more, or less than nine months aftcr the former great ïstue, withits solemn pledges as to keeping down the amount in circulation. Wit h the exception of a f ev thoughfful meD, the whole nation agaiu sang pseans. Iii the comparativo easo of a new issue ;is seen the lesson of a law in finance as certain as the aetion of a similar law in natural philosophy. If a material body be allowed to fall from a height, in obedience to gravitation, ils velocity is accelerated, by a wellknown law in physic?, in a constantly-increasing ratio ; so in issues of irredeemable currency, in obedience to theories or interests of a legislativo body, or of the people at Urge, there is a natural law of rapidly-increasing issue and depreciation. The first inflation bill was passed with great diffieulty, after a very sturdy resistance, and by a majority of a few score out of nearly a thousand votes cast; but you observe now that new inflation measures ire passed more and more easily, and you will aave occasion to see the woiking of this same aw in a more striking degree as this history develops itself. Nearly all Frenchmen now became desperate optimista, declaring that iuflation is prosperity. Throughout France there eame tomporary good 'eeling. 'l'ho nat'ou was becoming fairly inebriated with paper money. The good feeling was that of a drunkard after his draught; and it is to be noted, as a simple historical fact, corresponding to a physiological fact, that, ps ;he draughts of paper money came faster, the periods of succeeding gooü feeling grew shortr. Various bad signs had begun to appear. Immediately after this last issue carne a depreciation from 8 to 10 per cent. ; but it is very curious to note the general reluctance to assigu the right reason. The decline in the purchasing power of paper money was in obedienco to one of the sijaple laws in social physios, but Franco had now gone beyond her thoughtful statesmen, taking refuge in unwavering optimism, and giving any explanation of the new difficulties rather than the right one. A leading niember of the Assembly insúied, in an elabórate speech, that the cause of depreciatiou was simply want of knowledge and confideuce in the rural distriets, and proposed means of enlightening them. La Bochefoucauld proposed to issue an address to the people. showing the goedness of the currency and the i absurd ity of preferriüg coin. The address was unanimouisly voted. As well might they have attempted to show that, if from the liquid made up by mixing a quart of wino and two quarts of water, a gilí be taken, this will possess all tho exhilarating value of the original, undiluted beverage. Attention was next aroused by another monacing fact - specie was fast disappearing. The explanations for this fact were also wonderf ui in displaying the ingenuity of the people at large in finding false reasons and evading the truo one. A very common explanation roay be found in Prudhomme's newBpaper, Les Reyolutions de Paris, of Jan. 17, 1791, where it is declared that " coin will keep rising untü the people have hung a broker." Another pepular theory was that the Bourbon family were in some miraculous way drawing off all solid money to tho chief centers of their intrigues in Germany. Still another favorite idea was tbat English emissaries were in the midst of the people, instilling notione hostile to paper. Great efforts were made to find these emissaries, and more than one innocent person experienced the popular wra h, 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. As well might he explaiu the fact (nat, when oil is mingled with water; water sinks te the bottom, by taying that it is beca aso the oil rises to the top. The disappearanc of specie was the result of a natural law as simple and sure in its aetion as gravitation ; the superior currency had been withdrawn because an inferior could be used. Some efforts were made to remedy this. In the niunicipality of Quillebcef, the sum of 817 marks in epecie having been found in the possession of a citizen, the money was seized and sent to the Assembly. The good people of that town treated this hoarded gold as the result of eome singularly unjatriotiGwickedness or madness, instead of seeing that it was but the euro result of law, workmg in every land and time, when certain canses are present. Marat followed out this theory by asserting that death wa3 the proper penalty for persons who thus bid their money. In order to supply the specie required a great number of church bells were melted down ; but this proved; delusive. Still another troublesome faet began now to appear. Though paper money had increased in amount, prosperity had steadily diminished. In spite of all the paper issues, business activity grew more and more spasmodic. Enterprise was soon chilled, and stagnation followed. 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 Bervice to manufacturera, and restore their prosperity. Tho manufacturers were for a time deluded, but were at laet rudely awUtened from their deluaions. The plenty cf curreney had at first stimulated prednction, and created a great activity in manufactures; but soon the markets wero glutted, and the demand was vastly diminiehed. Then carne a collapse in manufacturiug and commerce, just as it had come uef ore in France ; just as it came afterward in Austria, lïussia, America and all other countries where mon have tried to build up prosperity on irredoemable paper. All this breaking down of the manufactures and commerce of the nation made fearfnl inroadj) on the greater fortunes ; but, upou tho lesser fortunes, and the little accuinnlated proporties of the masses of the nation who relied upon their labor, it pressed with iutcuBO sevcrity. Still another difficulty appeared. There had como a complete uncertainty as to the future. In the upriug of 1891 no ono knew whether a pieee of papor money represan ting 100 francs would. a month later, have a purchasing power of 100 francs, or 90 francs, or 80 francs, or GO francs. The result was, that capitalista declined to embarlt their means in bunineBS. Enierprise roceived a mortal blow. Demand for labor was still furthcrdim:uinhed ; and here came an additioual cause of misery. By this uncertainty, all farreaohlng undertakings wero killod. The bueineae of Franee dwindled iuto a mere living froni hand to mouth. This state of things, too, while it bore heavily againit tho interests of tho moncycd classes, was ttill moro ruiiious to thoso in more modcra.te and mostof a.ll to thOBO in straitonod ciroumstances. With tbe mafisoa oí he poople the purchaBeof evory artiole of supply bocame a speculation - a apeculation in whieh tho professional speeulator hac an immenso advantage over the buyer. Says tho mout brilliant of apologista f or French revo lntionary statesmanahip, " Comtneree wan dead betting took its place." Nor was there any compeueating advantage to the mercantile classes. The merchant was forced to add to hl! ordinary profit a sum sufficient to cover any probable or possible flucfcuationa in valué. And while pnces of producís thus went higher, the wagea of labor, owing to the number of workmen who were thrown out of employ, west lower. With the plethora of paper currency in 1791 appeared the first evidences of that cancerous diseaae which ahvays follows lai'ge issues of irredeemable curreucy- a dieease more permanentiy injurious to a nation than war, peatilence or famino. At the great motropolitan centers grew a luxurious, speculative, stockgambling body, which, like a malignant tumor, absorbed into itself the strength of the nation, and sent out its cancerous fibers to the rernotest hamleta. At these centers abundant wealth was piled up. In the country at largo tliere grew dislike of steady labor, and contempt for moderate gaiuíí and simple living. Now began to be seen more plaiuly some of the many ways in which an inflatiou policy robs the working classes. As these knots of plotting echemers at the city centers were becoming bloated with sudden wealta, the prodncing classes of the country, though haviug in their posaeasion more currency tban before, grew lean. In the schemes and speculations put forth by jobbers, and stimulated by the priutiug of more currency, multitudes of small fortunes throughout the country were absorbed, and. while these many small fortunes were lost, a few swollen fortunes were rapidly aggregated in the city centers. This crippled a large clasB in the country diatricta, which had employed a great number of workmen, and created a small class in the cities, which employed a great number of lackeya. In the eities now aróse a luxury and license which is a greater evil than the piundering which ministers to it. But woree still was the growing corruption in official and legislativo circles. Out of the speculating and gambling of the inflation period grew luxury, and out of this grew corruption. It is true that the number of the corrupt legislators was small, far lesu than alarmista led the nation to auppose, but there were enough to cauee widespread distrust, cyniciam, and want of faith in any patriotism or any virtue. There now appeared, ai anothcr outgrowth of thia disease, what has alwavs been seon under similar circumstances. It is a result of previoua evila and a cause of future evils. Th: outgrowth was the creation of a great de'uror clasa in the nation, directly interested in the deprcciation of the currency in which their debis were to be paid. The nucleua of the debtor class was formed by those who had purchaaed the ehurch lands from the Government. Only small paymenta down had been requiied, and the remainder was to be paid in amall installments spread over much time. An indebtedness had thua been created, by a largo number of people, to the amount of hundreds of millions. This large body of debtor, of course, soon saw that their interest was to decrecíate the curreucy in which their debts were o be paid, and soon they were joined by a 'ar more mfluential class; by that clats whose epeculative tendencies had boen stimuated by the abundance of paper money, and ïad gone largely into debt, looking for a rise n nominal valuea. Soon demagogues of the viler sort in the clubs began to pander to this debtor class; soon important members of this dobtor class were to be found intriguing in the Asiembly - often on the seats of the Assembly, and in places of public trust. Before long the debtor class bec&me a powerful body, extend ng through all ranks of society. From the stock gambler who eat in the Assembly to tho small land speculator in the rural districts; 'rom the sleek inventor of canards on 'the Paris E'.xchange to the lying stock-jobber in :he market to'.vn, all pressed vigoronsly for new issues of paper ; nll were able, apparenty, to demónstrate to the people that in new issuea of paper lay the only chance for naional prosperity. This great debtor clas, relying on the multitudo who could be approached by superficial argumenta, soon gained control. Strange as it may seem to those who have not watched the same causea at work at a previous period in Trance, and at various periods in other coun;riea, while every issue of paper mooey really made matters worse, a superstition steadily ained ground among the people at large that, f only enough paper money were isaued and more cuuningly handled, the poor would be made rich. Henceforth all oppoaition was fuile. In December, 1791, a report was made in the Assembly in favor of a fourth great issue of 300,COO,000 more of paper money. Coupled with thia waa the declaration that the total amount of circulation sliould never reach more than 1,600,000,000. What this proviso waa worth may be j udged from tho f act that not only had the deel utalion made hardly a year jefore, limiting the amount in circulation to j .,200,000,000, been violated, but the declaraon, made hardly a month before, in which he Asaombly had as aolemnly limited the amount of circulation to 1,400,000,000, had alo been repudiated. The evils which we lave already seen arising from the earlier issues were now aggravated. But the most curious thing evolved out of all this chaoa ia a new sygtem of politica! ecinoiiii. In the speeches about thia time, we begin' to flnd it declared that, after a!l, a depreeiated curreney is a blessing ; that gold and eilver form an unsatisfactory standard for measuring values ; that it is a good thiDg to have a currency that will not go out of the kingdom, and which separates Franco from other nations ; that thus shall manufactures be encouraged ; tbat commeroe with other nations is a curse, and every hindrance to it a blessing ;that the lawsof political economy, hqwever applicable in other time?, are not applicable to that particular time, and, however operativo in other nations, are not operativo in Franco ; tn the ordinary rules of political economy are perhaps suited to the minions of deapotiam, but not to the enfranchiaed inhabitants of France that the close of the eighteenth century ; that the whole present state of things, eo far from being an evil, ís a blessing. AU these ideas, and others quite as striking, are brought to the sivrface in the debates on the various new issues. Within four moaths comes another report to the Assembly as ingenious as those preceding. It declares : "Your committee are thoroughly persuaded that the amount of cirailating medium before the Kevolution was greator tban that of the assignats to-day ; but then the money circulated slowly, aud now it passes rapidly, eo that one thousa,nd million assignats do the work of two thousand millions of specie." The report foretells further increaae in prices, but by some curious jugglery reache8 a conclusión favorable to further inflation. The result was, that on April 30, 1792, oame the flfth great issue of paper money, amounting to 300,000,000 ; and at about the same time Cambon sneered ominously at public creditors as " rich people, old financiers and bankers." Soon payment wras suspended on dues to public croüitors for all amounts exceeding 10.000 franca. This was hailed by many as a measure in the interest of the poorer classes of the people, but the result was that it injured them most of all. Hencefonvard, until the ond of this bistory, capital was taken f rom labor und lockcd up in all the ways that financial ingenuity coiild devise. AU that sived thousands of laborers in Franco from starvation was that they were drafted off into ths army and sent to be killed on foreign battlefields. In Fabruary, 1792, assignats were over 30 per oent. bclow par. On the last day of July, 1792, came another brilliant report 'frem Fouquot, showing that tho total amount already issued was about 2,400,000,000, but claiming that the national lands were worth a little more than this sum. Though it was easy for any shrewd mind to find out the fallacy of this, and to show that the paper money already issued far exceeded the nmount that could be obfainel from the national lands, a decree was pa-ii-ed issuing 300,000,000 more. By this the prices of everything wcro agaiu enhanced save ono thing, and that one thing waa labor. Strauge as it may at first appear, whilo all producís hacl.boon raised cnormously in price by the depreciation of the currency, tho atoppage ot po many nianufactoriei; and the withdrawal of capita] cauaed wagos in tho summerof 1792, af tor all tho iuflciüoi), to be as small as theyhad been fouryeara before, namely, 15 rous per day. No more striking example can be seen of the truth nttered by Webster that "of all the contrivances for cheating the laboring clase of mankind, uone haa been more effectual than that which deludes them with paper mouey." Issue after issuo followed at intervals of a few ntontha until on T)ec. It, 17i)2, we have an official statement to the effect that ,100,000,000 had been put forth, of which (00,000,000 had boen buvned, leaving in circulation 2,800,000,000. When it is remembered that thero ivas little business to do, and that the purchasing power of the franc, when j udged by the staple producto of th oonntry, ya,s about efjual to half the present piirebasicg power of our own dollar, it will be seen into what evils Franee had drirted. As this mania for papor ran its course, even the bell-metal sous, obtained by melting down the bells, appears to have been driven out of circulation; parchment money from 20 sous to 5 was issued, and at last bilis of 1 sou, and even of half a sou, were put in circulation. But now another source of woalth opens to the nation. There comes a confiscation of the largc estates of nobles and landed propiietors who had fled the country. An estimóte in 17!3 makes the value of these estates three billion francs. As a consequence, the issues of paper money were continued in increased amounts, on the old theory that they were guaranteed by tbe folemn pledge of these lands belonging to the State. Early in 1793 the consequenees of over-issuo of paper began to be more paihfully evident to the people at large. Articles of common conramption became enormously dear, and the prico was constantly rising. Orators in the clubs, iocal meetings, and elsewhere, endeavored to enlightcn people by assigning every reason but the true one. They declaimed againsó the eorruption of the Mimstry, the want of patriotism among the moderates, the intrigues of the emigrant nobles, the hard-heartedness of the rieh, the monopolizing spirit of the merchants, the perversily of the shopkeepers, and named these as causes ef the difficulty. The washerwomen of Paris, finding soap so dear that they could scarcely purchase it, insisted that all Ihe merchants who were endeavoring to save something of their little property by refusing to sell their goods for the worthless currency with which Franee was flooded, should be punished with death ; the women of the market, and the hangers-on of the Jacobin Club, called loudly for law "to equalize the valuo of paper money and silver coin." It was also deinanded that a tax be laid especially on the rich, to the amount of 400,000,000 francs, to buy bread ; and the National Convention, which was now the legislativo body of the French republic, ordered that such a tax be levied. Marat deelared loudly that the people, by hanging a few shopkeepers and plundering their stores, could easily remove the trouble. The re8ult was that on ths 28th of February, 1793, at 8 o'clock in the evening, a mob of men and women in dieguiee began plundering the stores and shops of Paris. At first they demanded only bread, soon they insisted on coffeeand rice and sugar; at last they seized everything on which they could lay their hands - cloth. clothing, groceries and luxuries of every kind. Two hundred shops and stores wcro plundored. This was endured for eix bours. and finally order was restored onlyby a grant of 7,000,000 francs ,o buy off tbe mob. The new political economy was beginning to bear its fruits. One of its minor growths appeared at the City Hall of Paris, where, in response to the complaint3 of ;he pluudered merchants, Eoux deelared, in ;he midst of great applause, that "the shopseopers were only giving back what they had ïitherto robbed them of." This mob was suppressed, but now came the most monstrous of all flnaucial outgrowths of )aper mouey, and yet rt was an outgrowth per'ectly logical. Maximum laws were passed - aws making the sale of goods compulsory, and flxing their pnce in paper money. Vou Sybel declares : " It was the most comprehensive attack on ;he rights of property, as far as our historical mowlodge reaches, which was ever made in Western Europe - an attack made in the hcart of a great and civilized nation, and one which was not confined to the braius of a few idle dreamers, but practically carried out ia all its terrible consequences. It was made with fiery fanaticism and unbridle:! paasion, and yetwitn systematic caleulation. 'lts originators - victorious at home and abroad - were perfectly free in their deliberitions, and did not adopt their measures under the pressure of necessity or despair, but from delibérate choice. These are facts of universal significance, on which we ought to flx our attention all the more earnestly, be"ause they have been disregarded, although they are fraught with the most important consequences." The first result of the maximum was, that evtry means was taken to evade the fixed price lmposed ; the farmers brought in as little produce as they possibly could. This caused scarcity, and tlie people of the large cities were put on an allowauce. Tickets were issued authorizing the bearer to obtain at the maximum prices a certain amount of bread, or sugar, or soap, or wood, or coaJ, to cover immediate necessities. It may be said that these measures were tho result of the war then going on. Nothing could be mere baseless than such an objection. The war was generally successful. it was pushed mainly upon foroign soil. Numerous contributions were levied upon the subjugated countries to support tho French armies. The war was one of those of which the loss, falling apparently sn future generations, stimnlates, in s;id way, trade and production in the genera tion in being. [TO BK CONTISÜED.]