The Assignat

[From l'reBidont A. D, Whltv'g "Paper Monoy Inflatiou Ín Franco," publifhed by D. Ajipleton k Co., New York.] [coni -i.riiKi). On April 11, 1793, a law was paased to meet the caso of those who bought specie witli paper. Nothing could bo moro natural than such pnrcbases. Husbands who wished to niake provisión for thoir wivoi, fat luis who wished to mako provisión for their childrcu, desirod to accuniulate fomethiug of aoknowledged value. and onormous priees in. paper wore paid for gold. The uew law forbado the sale or excbange of specie for more than its nominal value in paper, with a penalty of six yoars' iui' I prisonment in irons. It will doubtless astonish many to leani (kat, in epito of these evident resul ts of too nnioh curronoy, the old cry of a "scarcity of circulating medium" was not stilled ; it appeared not loDg af ter each issue, no matter bow large, and reappoaied now. Bat every thonghtful student of finaneial history knows tliat this cry always comes after such issues- nay, that it must come- beeause in obedience to a natural law thero is a scarcity, or rather insnfliciOLicy, of currency just as soon as pricos become adj usted to the new volume, and there comes eome little revival of business with the nsual increase of credit. The cry of ' ' insunicicnt amount of ciroulatiDg medium" was again raised. The needs of the Government were pressing, and, wiíhin a month af Ier the passage of the f earf ui penal laws, made necessary by the olil issues, twelve hundred millions more were sent forti). About ten days after thiH, a law was pas led inakiug a forced loan of 1,000,000,000 from the rieb. In August, 1793, appears a report by Caaibon. No ono can read it without being btruck by its perverted ability. But whüe Cambon's plan of dealing Yith the public debt has outlapied all reyolutions since, his plan of dealing with the inflatcd currency canie to speedy and wretched failure. Very carefully he had dovised a f unding scheme, which, taken in conueotion with tbe systom of issues, was, in effect, wbat in theee days would be called an " interconvertibility scheme." By various degrees of persuasión or forcé, holders of assignats were urged to convert tbem iuto evidences of national debt bearing interest at 5 per cent., with thu nnderstauding that if more paper were afterward needed, more would be issued. All in vain. The official tables of de?reciation show that the assignats continucdto all ; poon a forced loan calling in a billion of these checked this fall, but for a moment. The ''interconvertibility scheme," between currency and bqnds, failed a8 dismally as the " interconvertibility scheme" between currency and land, had failed. Soon after catne a law confiscating the property of all Frenchmen who left France before Jufy 14, 1789, and who had not returued. Thu gave new land to be mortgaged for the security of paper money. " Month efter month, year after year, this went on. Meanwhile everytbing possible was done to keep np the value of paper. In obedience to those who believed, with the market women of Paris, as stated in their famous petition, that 'Maws should bo passed makiug paper as good as gold," Couthon, on Aug. 1, 1793, proposed and carried a law punishiug any person who should sell assignats at less than their nominal value with imprisonment for twenty years in chains. Two yoars later Couthon cirried a law making investments in foroign countries, by Frenchmen, puuishable with fi.nd.to mïike this series of meaanres UI il!. IJ . ïlliU, IU Ilimvt. lli L n l-i i 11, ri ji i j i' ii. - i ■ i i-.-t complete, to keep up paper at all hazards, on Aug. 15, 1793, the natioual debt was virtually repudiated. But, to the surprise of tho great majority of the people in Frauce, after the momentary spasm of fear had paesed. the valuo of the asi-ignats was fouml not to have been increased by these meaeures; on the coutrary, they pcmsted in obeying the uatural laws of tinance, and, as ncw issue increased, tlieir values deerensed in a constant ratio. Nor did the most lavish aid of nature avail to help matters. The paper money of the nation seenied to possess a magie power to transmute prosperity into adversity. The year 1794 was exceptionally frnitful : crops were abundant ; and vet with the autumn came scarcity of provisions, and with the winter came famine. Tho reason is perfectly simple. The Bequences in that wholo history are absolutcly logical. First, the Legiülalure had inflated the currency and raised prices enormously. Next, it had been foreed (o es tablish an arbitrary maximum price for produce. But this price, lurge as it seemed, was not eijuul to the real valué of produce ; many of the farmer, therefore, raised less proiuco, or refrained from bringing what they had to market. But, as is usual in such cases, the trouble was ascribed to evorything rathcr than the real cause, and the niOBt severe measures wore established in all parts of the country to force farmers to bring produce to mirkct, tlie millors to grind it, and the shopkeepers to sell it. The issues of paper money continued. Toward the end of 1794, 7,000,000,000 assignats were in circuiation. By tho end of Mav. 1795, the circuiation was increased to 10,000". 000, 000 ; at the end of June, to 14,000,000,000 ; at the end of July, to 16,000,000,000 : and the value of 100 franca in papor feil stuadly, first to four francs in gold, then to three, then to two and a half. lint, curiously enough, when tliis depreciation was rapidlygoing on, as at varions other periods when depreciation was rapid, there came an appareut revival of business. The hopee of many were revived by the faot that, in spite of the decline of paper, there was au exceedingly brink trado in all kirds of permanent property. Whatevcr artielcs of permanent value certain people were willing to sell, certain other people were willing to buy, and pay largely for in assignats. At this, hope revived for a time in certain quarters. But ere long it was diacovered that this was one of the most terrible resulta of a natural law which is sure to come into play under such circumstances. It was Bimply a feveriah activity caueed by the intense desire of a iarge nutnber of the more fihrewd class to convert their paper money into anythiug and everything which they could hold and lioard until the collapse which they foresaw should take place. This very activity in business was simply legal robbery of the more onthusiastic and trusting by the more cold-hearted and keen. It was the 4i unloading " of the as-ignats by the cunning upon the mass of the peoplo. Bnt even this could not fltop the madness of inflation. New issues continued, until at the begiuuing of 1796 over 45.000,000,000 francs had been issued, of which óver 36,000,000,000 were in actual circulatiou. It is very interesting to note, iu the midst of all this, the steady action of another simple law in flnance. Tho Government, with lts prisons and its guillotines, with its laws innioUng tweuty years' impiisonment in chains upon Iho buyers of gold, and death upon iavostors in foreign seourlties, was uttcrly powerless against this law. Tho iunis aor stood in the market as a monitor, noting eacu d&y, with uuerting ñdelity, the decüue in valuo óf theasKÍguat; a monitor not to be bribed, not to be scared. As well might the National Oqnvention try to bribe, or scare away, the polai ity of tho mariner's compass. On Áug. 1, 1795, the gold louis of 25 francs was worth 921) francs; Sept. 1, 1,200 franc: Nov. 1, 2 600 francs; Dec. 1, 3,050 francs. In Febriwrv, 1790, it was worth in market 7,200 fraucs, or one franc in gold was worth 288 francs in paper money. Pricos of all OOmmodities went up ïu proportion Tne writings of the poriod give curious details of these prices. Thibaudeau, in hi s " Memoirs", speaks of sugar as 500 francs a pouud, sjap 230 francs, candles 140 francs. Mercier, in his ïfc-like piclurts of tlio Freuch metropolis at :hat peiiod, mentious 600 francs as oarrisge jire for a singlo drive, and 6,000 francs for an entire day. Everything was inflated in about I .be saine proportiou, excopt the wages of labor ; as manufactories closed, wages had fallen, mtil all that kept tbcm up at all was the fact bat so inanv laborers wore drafted into the iirmy. From this state of things came grioveUfl wrong and gross frand. Men wlio hud foreen theso results fully, and had gone into iebt, were, of conrse, jubilant. He who in 790 had borrowed 10,000 francs could psy his lebts in 1796 for about 35 francs. Laws were made to moet theso abuses. As far back ixa 794 a plan was devised for publisliing jiil "tables of depreoiation" to be usod n makiog tquitable tettlements of debts, but '■ sbll such macliicery proved futile. Oi t'ae 8th of May, 1796, a youug man complaiuod ,o tho National ÜOnvention thut bis ulder brother, who had been actiiig as adminitrator 3f his deceased father's estáte, had paid Ui? ïeirs in assignats, and that he received scarcey 1-OOOth part of the real vilue of his sharo. Po meet cases liko this, a law was passed esablishing a " scalo of proportion." Taking US a standard the value of the assignat when here were 2,000,000,000 in circnlation, this aw declarod that, in the payment of debts. one-quarter should be added to the amount uriginally borrowed for cvery 5OO.(iOO.00O added to tho circuiation. In obedience to tïiia aw, a man who borrowed 2,000 francs when here wero 2,000,000,000 in circnlation wonld iavi! to pay his creditors 2,500 francs when 300,000,000 more was adtlcd to the curroncy, ! and over .'10. 000 frau& before tho eniisnions öf I )aper reached their Knal aniount. This tronght iuve%il, worse, if pjatrible. than the 3ld. But, widetpread as these evils were, thuy wero small cumpared with the universal i tresB. The question will naturally be askeü, 1 On whom did this vast dcpreciation mainly fall at last? When this currcncy had sunk to about 1-300Ü1 part of its nominal valué, aud alter that to notuing, in whoxo liandn was tbc bulk of it 'i The answer is simple. I will give it ia the exact word of that thoughtful histotoriau froni wliom I havo alioady quoted: " Before the ond of tlio year 17M5 the paper money was abnost exclunively in tho hands of tho worjdng claesos, employés and meu of small means, whose property was not largo enongh to iuvest iii toros of goodu or uatlonal lands. Tho financier and men of largcmeanu, though they sufferod terribly, were ohrowd enough to put mtiuh of thelr property into ob jeeta of permanent yalue. The'working classes had no such foresight or skill or tucane. On them ñnally carne the great, crashing weight of tho loss. After tho Brut collapse carne up the cries of the Btarving. Koads aud bridgen were m-glectod; manufactures were generally given up in uttor helplesBuess. None folt any confidence in the future in auy reapoct; nono darod to mska an investmeut for any leugth of time, and it was accounted a folly to curtail tho pleasuros of the moment, to accuniulUo or save for au uncertain fntórd." Wliile thi system was thus running on, anew Government had been established. In Octobor, 1705, eame into power the "Directory." It found the country ntterly impoverished, and its only resource at ilrst was to print more paper money, and issue it oven while wet from the press.' The next attempt of the Directory was to secure a torced loan of 00,000,000 francs froai the wealthier classes, but this was found fruitless. Next a National Bank was proposed; but capital was loath to embark in bankiDg, whilo the howls of the mob against all who had anything to do with inonoy resounded in tho oars of capitalists. At laBt tho Directory bcthought thernselves of auother expedient. It was by no niaans iew. It was fully tried on our own continent twico before that time, and once since - first in our colonial period ; next, during our Oonfoderation ; last, by the recent "Houthoru Confederacy" - aud here, as elsewhere, always in vain. But experienco yielded to thoory, plain business sense to financial metaphysics. It was determined to issue a new paper, which should be " fully secured" and "as good as oíd." OnFeb. 19, 17%, the copper plates of the assignats were broken up, and it was decreed that no more atsignats be issued ; instead of them, it was decreed that a uew paper money, " fully eecuredand as goodasgold," beissuod, unclor the namo of "mandats." In order that thes9 notes should bo " fully secured," choice public roal ostate was set apart to an amount fully equal to the nominal valué of the issue, and anyoue posseseing any quantity of the mandats cculd at onco tako postession of Government Iand8 to their f uil face valuo ; the price of the lands to be determined accordinp: to their actual rent, and without the formalities and delays previously established in regard to the purchase of lands with assignats. In order to make tho mandats "as good as gold," it was planued by forced loans and other means to reduce the quantity of assigr.ats in circulation so that the valuo of each asigmt should be raisod to the one-thirtieth of the value of gold, thon to niakc mandatrf legal tender, and to eubBÜtnte thom for aseignats at the rato of one for thirty. Never woro great expectations more cruelly disappointcd. Even before they could bo issued from tho pross, the mandats feil to 30 per cent. of their nominal value; from this they speedily feil to 15 per cent. , and sooa after to 5 per cent. This plan failed - just as it failed in New England in 1737; just as it failed under oar own ConfodeiMtion in 1781; jnst as it failed under the "Southern Confederacy" within the past few years. No euactments could stop the downward tendency of this new paper, " fully secured," "as good as gold;" the laws that finally govern üiriucc are not made in conventions or congresses. On July 1G, 1796, the great blow was struck. It was decreed that all paper, mandats and assignatx, should be taken at its real value, and that bargains might bo made in whatever currency the people cliose. The real value of the mandats at this time was about 5 per cent. of their nomical value. The reigu of paper monoy in France was over. The 2,500,000,000 mandatu wout into the common heap of refuBe with the provious 36,000,000,000 ass;gnat8. Tho whole vast issue was repudiated. The coüapse had como at last ; the whole nation was plunged into financial dirtress and debaucherv from one end to the other. When all was over with paper money, specie began to reappear - at lirst in suih'ciont eums to do tho small amount of ness wbich remained af ter the collapse. Then, as the lmsiiKs demand increasod, the amuunt of spooie flowed in froin the world at large to meet it, and the nation gradu&lly r6eovored from her long paper-iuoney debsuch. Tbibaudeau, a very thoughtful observer, tells l us in his " Memoirs " that great fears were feit as to a want of c'rculatmg medium between tbc time wben paper should go out and coia should come iu ; but no such want was was ever feit - that coin came in as if by magie - tbat tho nation rapidly reeovered from its paper-money debauch, and, within a year, business entered a new current of prospority. Nothing could better exemplify tüe aaying of one of the most shrewd of modern statesmon, that "tliere wil) always be money." Such, briefly sketched in its leadiug features, is the hiatory of the most Bklltfnl, vigorous, and persistent attempt ever mado to snbslilute for natural laws in (nance the ability of a legislativo body. and to substituto for a standard of valué, rooognized throughout the world, a national standard devised by theoriats and manipulatod by schemers. Every other attempt of tho same kind in human liistory, under whatever circumstances, has reached similar results in kind if not in degree ; all of them show the fcxistence in the world of financial laws as sure ii their operatiou as those lawe which hold the plañóte in their coursus. My subject bas been "Paper Jlouey Iullation in JFrauce ; IIow it Came ; What it Brought, and How it Euded." It came, as you saw, by seeking a remedy, for a comparatively mail evil, in an evil lnfluitely more dangeroua. To cure a disease temporary ia its character a corrosivo poison was administered which ate out the vitáis of French prosperity. It progressed acoording to a law in social physics which we may cali the to! of accflt rating issue arul deprecia! ion. It was comparatively eay to rofrain from the first issue ; it j was exceediigly difiicult to refrain from the j second; to ivfrain from the third and those follonitig was impossible. It brought, as you have seen, to commerco and manufacture?, the mercantilo intorost, the agrieultural interest, utterruin. It brought on these the same de3tructiou which would come to a Hollander opening the dikes of the sea to irrígate his land in a dry summer. It ended in the complete linancial, moral and political prostration óf France - a prostratiou from which a great absolute monarch alone was able to draw it. But this history would be incomplete without a brief eequeí showing how that monarch profitód by tbia frightfnl experienee. Whcn J3onaparte took the Consnlship the condition of fiscal affairs was appalling. The Government was bankrupt; an immense debt was unpaid. The furthcr OolleotiOD of taxe seemed impossible; the assessments were in hopeless confusión. War was going on in the East, on the llbinc, and in Italy, and civil war in La Vendee. AU the armies had been long unpaid, and tho largest loan that could for a moment be effectod was for a siim hardly moeting the expense of the Government for a singlo day. At the first Cabinot council üonaparte was asked what he inteudod to do. He replied, "I wil pa cash or pay notbing.' From this time he con ducted all his operations on thia basis. He arranged the assessmouts, funded the debt, and made every payment in cavh, and from this time - during sil the eampaigns of Marengo, Austerlitz, Jena, Eylau, i'riedland, down to the peace of IHlRit in 1X07- there was but ono suspension of pecie payment, and this only for a few days. Wheu the tirst great Enropean coalition was formed against tiie empire Napoleon was hard presned linancially, and it was proponed to resort to papor.mocey: but he wroto to his Minister, " Whileliive Iwill ncver resort to irredeemable paper." He uever did, and France, under this determiuation, conamanded all the gold sbo needed. Wheu Waterloo came, witii tbe invation of the allies, with war on her own soil, witti a chantro of dynasty, and heavy expenses for war and indempities, France, on a ípicio baaif, exparieuced no severo liii&ncial distress. If we glance at the financial liistory of Franje during the rteent Franc j-1'rnasian war aud the Communist struggle, in which a far more terrible preusure was brought apon Fruuch ünance than our own recent civil war put upon American tinanco, and vet with no national etagnation or diatres, but with a steady progresa iu prospority, we chalí see still moro clearly tho advautage of meeting a financial erisii) n ar. honot and manly way, aud by methods sanctioued by tho worlo's most costly experieuco, rathor than by yielding io the schemes of speculators, or to the ' dreatns of theorists involvod in tinaueial j physics. _______________ A p.jOR son of the Emorald Isle upplied ior nraploymeut to an avnrioious hunks, who told bim he employé! no Irishmen, " For the last oue died on my haml, and I was foroed to bury him at my own charge." "Ah, your honor," said Pat, brightoning up, "and is that all? Then you'll givo me the place, (or sure I can get a certifícate that I never died in the eniploy of any master I iver served." A kisky experiment was tried in u Paris theater. Iu the ballet the leading danseuse came forward waviug an olive brauch. Then all the flngs of the world were waved by the corps, exoepting that of Germany.' Then the premier danseuse displayed the Germán ilag. The reeeption given it hy the spectators wS very nrtt. tinl