Effects of Cheap Coinage.

From Macaulay’s History of England.

Who suffer the most from the Debasement of the Currency?—The misgovernment of Charles and James, gross as it had been, had not prevented the common business of life from going steadily and prosperously on. While the honor and independence of the state were sold to a foreign power, while chartered rights were invaded, while fundamental laws were violated, hundreds of thousands of quiet, honest, and industrious families labored and traded, ate their meals, and lay down to rest in comfort and security. Whether Whigs or Tories, Protestants or Jesuits were uppermost, the grazier drove his beasts to market; the grocer weighed out his currants; the draper measured out his broadcloth; the hum of buyers and sellers was as loud as ever in the town; the harvest home was celebrated as joyously as ever in the hamlets; the cream overflowed the pails of Cheshire; the apple juice foamed in the presses of Herefordshire; the piles of crockery glowed in the furnaces of the Trent, and the barrows of coal rolled fast along the timber railways of the Tyne.

But when the great instrument of exchange became thoroughly deranged, all trade, all industry, were smitten as with a palsy. The evil was felt daily and hourly in almost every place and by almost every class—in the dairy and on the thrashing floor, by the anvil and by the loom, on the billows of the ocean and in the depths of the mine. Nothing could be purchased without a dispute. Over every counter there was wrangling from morning to night. The workman and his employer had a quarrel as regularly as the Saturday came round. On a fair day or a market day the clamors, the reproaches, the taunts, the curses, were incessant; and it was well if no booth was overturned and no head broken.

No merchant would contract to deliver goods without making some stipulation about the quality of the coin in which he was to be paid. Even men of business were often bewildered by the confusion into which all pecuniary transactions were thrown. The simple and the careless were pillaged without mercy by extortioners, whose demands grew even more rapidly than the money shrank. The price of the necessaries of life, of shoes, of ale, of oatmeal, rose fast. The laborer found that the bit of metal which, when he received it, was called a shilling would hardly, when he wanted to purchase a pot of beer or a loaf of rye bread, go as far as sixpence. Where artisans of more than usual intelligence were collected in great numbers, as in the dockyards at Chatham, they were able to make their complaints heard and to obtain some redress. But the ignorant and helpless peasant was cruelly ground between one class which would give money only by tale and another which would take it only by weight.

A paper read before a meeting of Senators and members of the House of Representatives of both political parties, at Washington, April 12th; and before the Union League Club, at New York, April 13, 1876.

For proof that the financial situation of France at that time was by no means hopeless, see Storch, Économie Politique, vol. iv, p. 159.

See Buchez and Roux. Histoire Parlémentaire de la Révolution Française, vol. iii. pp. 364, 365; also p. 405.

For pamphlet itself, see the ad White Collection in the Library of Cornell University; for the effect produced by it, see Challamel, Les Français sous la Révolution. Also, De Goncourt, La Société Française pendant la Révolution.

See Moniteur, sitting of April 10, 1790.

Ibid., sitting of April 15, 1790.

See De Nervo, Finances Françaises, vol. ii, p. 236; also Alison, vol. i.

For striking pictures of this feeling among the younger generation of Frenchmen, see Challamel, Sur la Révolution, p. 305. For general history of John Law’s paper money, see Henri Martin, Histoire de France: also Blanqui, Histoire de l’Économie Politique, vol. ii, pp. 65-87; also Senior on Paper Money, section iii, Part I; also Thiers.

See Buchez and Roux, Histoire Parlémentaire, vol. v, p. 321. et seq. For an argument to prove that the assignats were after all not so well secured as John Law’s money, see Storch, Économie Politique, vol. iv, p. 160.

For specimens of this issue, as of John Law’s notes and of nearly every issue during the French Revolution, see the ad White collection as above.

See Addresse de l’Assemblée Nationale sur les Émissions d’Assignats Monnaies, p. 5.

Ibid., p. 10.

See Lettre de M. Sarot, Paris, April 19, 1790.

Von Sybel, History of the French Revolution, vol. i, p. 252.

For Mirabeau’s real opinion on irredeemable paper, see letter to Cerutti, in leading article of the Moniteur; also Mémoires de Mirabeau, vol. vii, pp. 23, 24, and elsewhere.

See Moniteur, August 27, 1790.

Moniteur, August 28, 1790.

“Par une seule opération, grande, simple, magnifique” (see Moniteur).

Moniteur, August 29, 1790.

See Lacretelle, 18me Siècle, vol. viii, pp. 84-87; also Thiers and Mignet.

See Hatin, Histoire de la Presse en France, vols. v and vi.

See Moniteur, August 29, 1790.

See speech in Moniteur; also in Appendix to Thiers’s History of the French Revolution.

See Von Sybel, History of the Revolution, vol. i, p. 265.

See also De Goncourt, Société Française, for other explanations.

See Les Révolutions de Paris, vol. ii, p. 216.

See Challamel, Les Français sous la Révolution; also Senior, On Some Effects of Paper Money, p. 82.

See Buchez and Roux, vol. x, p. 216.

For an admirable statement and illustration of the general action of this law, see Sumner. History of American Currency, pp. 157, 158; also Jevons, on Money, p. 80.

See De Goncourt, Société Française, p. 214.

See Von Sybel, History of the French Revolution, vol. i, pp. 281, 283.

For proofs that issues of irredeemable paper at first stimulated manufactures and commerce in Austria, and afterward ruined them, see Storch’s Économie Politique, vol. iv, p. 223, note; and for the same effect produced by the same causes in Russia, see ibid., end of vol. iv. For the same effects in America, see Sumner’s History of American Currency. For general statement of effect of inconvertible issues on foreign exchanges, see McLeod on Banking, p. 186.

See Louis Blanc, Histoire de la Révolution Française, tome xii, p. 113.

See Extrait du Registre des Delibérations de la Section de la Bibliothèque, May 3, 1791, pp. 4, 5.

Von Sybel, vol. i. p. 273.

For general account, see Thiers’s Revolution chapter xiv; also Lacretelle, vol. viii, p. 109: also Memoirs of Mallet Du Pan. For a good account of the intrigues between the court and Mirabeau, and of the prices paid him, see Reeve, Democracy and Monarchy in France, vol. i, pp. 213-220. For a very striking caricature published after the iron chest in the Tuileries was opened, and the evidence of bribery of Mirabeau revealed, see Challamel, Musée de la Révolution Française, vol. i, p. 341. Mirabeau is represented as a skeleton sitting on a pile of letters, holding the French crown in one hand and a purse of gold in the other.

Thiers, chapter ix.

See especially Discours de Fabre d’Eglantine, in Moniteur for August 11, 1793; also debate in Moniteur of September 15, 1793; also Prudhomme’s Révolutions de Paris.

Von Sybel, vol. i, pp. 509, 510.

See Von Sybel, vol. i, p. 515; also Villeneuve Bargemont, Histoire de l’Économie Politique, vol. ii, p. 213.

As to purchasing power of money at that time, see Arthur Young, Travels in France during the Years 1787, 1788, and 1789.

For notices of this small currency, with examples of satirical verses written upon it, see Challamel, Les Français sous la Révolution,” pp. 307, 308. See also Mercier, Le Nouveau Paris, edition of 1800, chapter ccv, entitled Parchemin Monnoie.

For Chaumette’s brilliant argument to this effect, see Thiers, Shoberl’s translation, published by Bentley, vol. iii, p. 248.

See Von Sybel, vol. iii. pp. 11, 12. For general statements of theories underlying the maximum, see Thiers. For a very interesting picture, by an eyewitness, of the absurdities and miseries it caused, see Mercier, Nouveau Paris, edition of 1800, chapter xliv. For summary of the Report of the Committee, with list of articles embraced under it, and for various interesting details, see Villeneuve Bargemont, Histoire de l’Économie Politique, vol. ii, pp. 213-239. For curious examples of severe penalties for very slight infringements of the law on the subject, see Louis Blanc, Histoire de la Révolution Française, tome x, p. 144.

See Memoirs of Louis XIV for the Instruction of the Dauphin.

For a simple exposition of the way in which the exercise of this power became simply confiscation of all private property in France, see Mallet Du Pan’s Memoirs, London, 1852, vol. ii, p. 14.

See specimens of these tickets in A. D. W. Collection.

Louis Blanc calls attention to this very fact in showing the superiority of the French assignats to our Continental currency. See Louis Blanc, Histoire de la Révolution Française, tome xii, p. 98.

See Von Sybel, vol. in, p. 26; also Montgaillard, Histoire de la Révolution Française, p. 196.

For an excellent statement of the action of this law in our own country, see Sumner, p. 220.

For a specimen of a Forced Loan Certificate, see A. D. W. Collection.

See Cambon’s Report, August 15, 1753, pp. 49-60; also Decree of August 15-24, 1793, § 31, chapters xcvi-ciii.

See Tableau de Dépréciation du Papier Monnaie dans le Département de la Seine.

See Von Sybel, vol. iii, p. 172.

See Von Sybel, vol. iii, p. 173.

See Thiers; also, for curious details of measures taken to compel farmers and merchants, see Senior, Lectures on Results of Paper Money, pp. 86, 87.

See Von Sybel, vol. iv, p. 231.

See Von Sybel, vol. iv, p. 330; also tables of depreciation in Moniteur; also official reports in A. D. W. Collection.

For a lifelike sketch of the vigorous way in which these exchanges of assignats for valuable property went on at periods of the rapid depreciation of paper, see Challamel, Les Français sous la Révolution, p. 309; also Say, Économie Politique, septième édition, p. 147.

See De Nervo, Finances Françaises, p. 280.

For a very complete table of the depreciation from day to day, see Supplement to the Moniteur, of October 2, 1797. For the market prices of the louis d’or at the first of each month, as the collapse approached, see Montgaillard. See also official lists in the A. D. W. Collection.

See Mémoires de Thibaudeau, vol. ii, p. 26.

See Le Nouveau Paris, vol. ii, p. 90.

For curious examples of these “scales of depreciation,” see the A. D. W. Collection.

For a striking similar case in our own country, see Sumner, History of American Currency, p. 47.

See Villeneuve Bargemont, Histoire de l’Économie Politique, vol. ii, p. 229.

See Von Sybel, vol. iv, pp. 337, 338. See, also, for confirmation, Challamel, Histoire Musée, vol. ii, p. 179. For a thoughtful statement of the reasons why such paper was not invested in lands by men of moderate means, and workingmen, see Mill, Political Economy, vol. ii, pp. 81, 82.

See Von Sybel, vol. iv, p. 222.

For details of this plan very thoroughly given, see Thiers’s History of the French Revolution, Bentley’s edition, vol. iv, pp. 410-412.

For an account of “new tenor bills” and their failure in 1737, see Sumner, pp. 27-31; for their failure in 1781, see Morse, Life of Alexander Hamilton, vol. i, pp. 86, 87. For similar failure in Austria, see Sumner, p. 314.

See Marchant, Lettre aux Gens de Bonne Foi.

See Sumner, p. 44.

See De Nervo, Finances Françaises, p. 282.

Among the many striking accounts of the debasing effects of “inflation” upon France under the Directory, perhaps the best is that of Lacretelle, vol. xiii, pp. 32-36. For similar effect, produced by same cause in our own country in 1819, see statement from Niles’s Register in Sumner, p. 80.

For Madame Tallien and luxury of the stock-gambler classes, see Challamel, Les Français sous la Révolution, pp. 30, 33; also De Goncourt, Les Français sous le Directoire.

For similar expectation of a “shock,” which did not occur, at the resumption of specie payments in Massachusetts, see Sumner, History of American Currency, p. 34.

See Thiers.

For exemples of similar effects in Russia, Austria, and Denmark, see Storch, Économie Politique, vol. iv; for similar effects in the United States, see Gouge, Paper Money and Bankers in the United States; also Sumner, History of American Currency. For working out of the same principles in England, depicted in a masterly way, see Macaulay, History of England, chap. xxi; and for curious exhibition of same causes producing same results in ancient Greece, see a curious quotation by Macaulay in same chapter.

For parallel cases in early history of our own country, see Sumner, p. 21, and elsewhere.

For a review of some of these attempts, with eloquent statement of their evil results, see Mémoires de Durand de Maillane, pp. 166-169.

For similar effect of an inflated currency in enervating and undermining trade, husbandry, manufactures, and morals, in our own country, in 1779, see Daniel Webster, cited in Summer, pp. 45-50. For similar effects in other countries, see Senior, Storch, Macaulay, and others, already cited.

For facts regarding French finance under the emperor, I am indebted to Hon. David A. Wells. For more recent triumphs of financial common sense in France, see Bonnet’s articles, translated by the late George Walker, Esq.