This is Cornell University founder A.D. White's brief and intelligent history of a hyperinflation that happened in 1790s France, right after the French Revolution. It is a critically important work, revealing all the patterns you need to understand any other inflationary period--including today's.
I am coming around to the belief that the most important history to read right now is monetary history. Inflationary periods across history have strikingly similar patterns: they all rhyme, and thus knowing this history tells you what to do, how to anticipate and respond.
The overall system (by "system" here I mean any government-run monetary system consisting of often highly intelligent finance ministers, legislators, orators, interest groups, bureaucrats, Cantillon insiders, etc.) is rarely collectively aware of history, rarely aware of what it is really doing, and nearly always reactive to consequences. On a system level, it rarely thinks of anything beyond the next step. It is never anticipatory.
Which means if you know your monetary history and thus can think out three, four or five steps ahead, you (yes, you!) can predict where the whole machine is going, and what to do in response.
What is so appalling and so sobering about this particular French inflationary period was that it repeated, within the same lifetime, the same mistakes of a nearly identical debacle in France--the infamous John Law/Mississippi hyperinflation of 70 years earlier. In fact, many of the statesmen directly responsible for the 1790s inflation literally "owed the poverty of their families" to the prior John Law inflation! It shows that even when the effects of money printing literally destroyed your family just a generation or two before, the temptations to do it again are still too great. Again, the system is not self-aware, and so the actions of such a system repeat, predictably, again and again. The playbook, the entire playbook, is right there for you to study.
This book (along with the five titles on my inflation required reading list below) will give you a roadmap for the future. Let me be clear: if you aren't ready, you will get destroyed by inflation, either gradually or suddenly. Please, please be ready.
Inflation required reading (links will take you to my reviews here of each book):
Readers, two last things: 1) first here's a link to a free public domain copy of this work at Project Gutenberg, and 2) this time, feel free to read on further into this post: the book is short and my notes aren't that long this time!
Introduction by Andrew D. White
6: "...it would be inconsistent to stop at the unlimited issue of silver dollars [as opposed to gold dollars] which cost really something when they could issue unlimited paper dollars which virtually cost nothing."
6: "...the French proposal was vastly more sane than that made in our own country [here A.D. White refers to the US government's "greenback craze" of issuing paper/non-gold-backed money during the 1870s]" because at least the paper money issued in France was (at least at first) based on the value of state-confiscated church land and as well as seized estates of aristocracy who had fled the country in the early stages of the revolution. Altogether this was as much as a third of the property of France.
Forward by John Mackay
8: "I am greatly indebted to the generosity of Mr. Andrew D. White, the distinguished American scholar and diplomatist, for permission to print and to circulate privately a small edition of his exceedingly valuable account of the great currency-making experiment of the French Revolutionary government."
8: "Legislatures are as powerless to abrogate moral and economic laws as they are to abrogate physical laws."
8-9: Four facts that emerge:
1) there was steady depreciation in the value of the assignats and mandats until they reached zero, with the loss falling mostly upon the poor and ignorant
2) in an attempt to maintain fixed values of the paper currency the government was involved in "an equally futile attempt" to maintain fixed prices for commodities; the government enforcing penalties of fines, imprisonments and death were powerless to this end
3) an entire demoralization of society took place: thrift, integrity, humanity and "every principle of morality" were lost
4) the land stolen by the state from the church and emigrant nobles was worth $1 billion livres, "a straight addition to the state's resources." "It is ominously significant" that in 1871 France paid a war indemnity to Germany of exactly the same sum, all of this "immoral confiscation" was lost yet again.
10: "The wild and terrible expression given to these insidious principles in the havoc of the revolution should be remembered by all."
Part I
11: In 1789, France had "a heavy debt and a serious deficit"; the economy wasn't running well, there was a search for an easy road to prosperity, so "the idea was set afloat that the great want of the country was more of the circulating medium [money/currency]; and this was speedily followed by calls for an issue of paper money."
12-13: 1789-1790: the National Assembly plan to confiscate Church lands, and pay for it with large-value notes (of 1,000, 300 and 200 livres), which were too large to be used as ordinary currency; they would also bear interest which encouraged holders to hoard them; the Assembly (at first) avoided issuing smaller paper obligations, this is a compromise that was worked out over the objections of the Minister of Finance Jacques Necker. Later the Assembly ended up issuing low-value notes as well.
13: the pro argument here for issuing paper money was that it would juice the sluggish economy, which was in a downturn; note that this is actually true: inflation causes [actually forces] people to engage in more economic activity to unload the suspect and lower-value paper currency! Another argument, especially relevant because France had just experienced the John Law hyperinflation only 70 years prior, was that paper money printing under the Constitutional Republic was "safe" as opposed to paper money printed under "despotism" [read: the old monarchy]. Somehow it was believed that paper money would only be "overissued" under despotism, and that a "democracy" like the post-Revolution republic would be magically protected from this temptation. [Obviously history shows the precise opposite to be true.]
13: Further contra-arguments against printing from Cazalès and Maury.
13-14: On the seizure of church and "princely estates" (the lands of the oligarchs and elites of those days) throughout France: it was as much as 1/4 to 1/3 of the entire real property of France (!) which became the property of the nation "by a few sweeping strokes" of the pen. French statesman desired to sell this land quickly and get it distributed among the "thrifty middle-classes" to commit them to the revolution and to the new government.
14: Next, the government issued 400 million livres worth of paper currency "in notes small as well as large"; this would let the treasury pay out something towards its debt, it would stimulate business once put into circulation, and it would give people the means to buy (from the government) the seized real estate. "...never was a theory more seductive both to financiers and statesman."
14: [Great, great money quote here on how everyone knew about the risks of printing non-specie paper, everybody remembered the failed "John Law experiment" 70 years earlier]: "They had then learned how easy it is to issue it; how difficult it is to check its overissue; how seductively it leads to the absorption of the means of the workingmen and men of small fortunes; how heavily it falls on all those living on fixed incomes, salaries or wages; how securely it creates on the ruins of the prosperity of all men of meager means a class of debauched speculators, the most injurious class the nation can harbor,--more injurious, indeed, then professional criminals whom the law recognizes and can throttle; how it stimulates overproduction at first and leaves every industry flaccid afterward; how it breaks down thrift and develops political and social immorality. All this France had been thoroughly taught by experience."
15: Note the quality of statesman in this legislature: the author says "few more keen-sighted legislative bodies have ever met in this first French Constitutional Assembly." [These guys weren't dopes at all and yet they still did the monetary scheme, they still repeated the pattern.] "But the current toward paper money had become irresistible. ...if any nation could safely issue it, France was now that nation; that she was fully warned by her severe experience under John Law; that she was now a constitutional government, controlled by an enlightened, patriotic people." [Thus the same patterns play out whether you have a hypocognized government like ours today (thus the mistakes are made through ignorance and stupidity) or if you have a hypercognized government (thus the mistakes in 1790s France were made via overconfidence and assumptions of infallibility)!]
16: The new monetary issue was called assignats, notes secured by real estate and bearing 3% interest, "engraved in the best style of the art."
17: Things started off great as they always seem to do: "...the treasury was at once greatly relieved; a portion of the public debt was paid; creditors were encouraged; credit revived; ordinary expenses were met, and, a considerable part of this paper money having thus been passed from the government into the hands of the people, trade increased and all difficulties seemed to vanish."
17-18: If the state had stopped here perhaps the many more paper currency issuances that later came out would not have happened, but quickly the government spent these 400 million assignats, and then "The old remedy immediately and naturally recurred to the minds of men. Throughout the country began a cry for another issue of paper." [Again, predictable: it happens every single time.]
18ff: On Mirabeau, the great French statesman, who derided paper money like the assignats as "a loan to an armed robber," but still went along with the plan to seize land and issue the paper currency. On the August 1790 report favoring the additional issue of paper, "Mirabeau made one of his most powerful speeches" claiming France had learned from the John Law experience and could do one more issue of paper, then suggested that assignats be created to an amount sufficient to cover the national debt, a total of some 2.4 billion livres. "His demagogy bloomed forth magnificently." [Also, A.D. White can sure sling a good sentence from time to time.]
21: Finance minister Necker was against the issuance but was overruled; he resigned and left France forever. "Marat, Hébert, Camille Desmoulins and the whole mass of demagogues so soon to follow them to the guillotine were especially jubilant." [Another very rich irony here is the fact that at least this money printing was debated out in the open back then: today this isn't decided by the public or by US legislators at all, the money supply is basically decided by an "administrative state" apparatus, the Federal Reserve (technically the executive branch chooses the Fed Chairman and he's confirmed by the Senate, but his term is 12 years, which means he and his bureaucracy usually long outlast the people selecting him). Also, never forget the key cynical rule about modern democracy "if they let you vote for it it's already been decided."]
22: Also astounding that it wasn't totally obvious to everyone that if you double the quantity of money of course prices will double!
22: Talleyrand (the famous statesman) had supported the first money issue but was against the second.
24ff: "...calling Mirabeau or Talleyrand to advise upon a monetary policy ...was like summoning a prize-fighter to mend a watch." On September 29th 1790 the vote passed 508 to 423.
25: Cheaper currency had driven out dearer, paper had caused silver and copper "small money" to disappear so there were clamors for still more small bills.
26: Prices began rising, and the cry for "more circulating medium" continued. [The idea here is that people hang on to their precious metals currency and are quick to get rid of their paper money while prices rise, and thus everyone thinks that you just need more paper money!] And then came yet another new issue of 600 million more livres, less than nine months after the former huge issue, which had of course also included promises that that would be the last issue.
27: The author likens the process to that of a body falling from a height: its velocity accelerates. Likewise irredeemable currency leads to "a natural law of rapidly increasing emission and depreciation."
27: "During the various stages of this debate there cropped up a doctrine old and ominous. It was the same which appeared toward the end of the nineteenth century in the United States during what became known as the "greenback craze" and the free "silver craze." In France it had been refuted, a generation before the Revolution, by Turgot, just as brilliantly as it was met a hundred years later in the United States by James A. Garfield and his compeers. This was the doctrine that all currency, whether gold, paper, leather or any other material, derives its efficiency from the official stamp it bears, and that, this being the case, a government may relieve itself of its debts and make itself rich and prosperous simply by means of a printing press:—fundamentally the theory which underlay the later American doctrine of "fiat money." [I realize now that Modern Monetary Theory/MMT is basically the same idea all over again. Nothing is new and no one remembers!]
27-28: "The great majority of Frenchmen now became desperate optimists, declaring that inflation is prosperity. Throughout France there came temporary good feeling. The nation was becoming inebriated with paper money... Various bad signs began to appear. Immediately after each new issue came a marked depreciation; curious it is to note the general reluctance to assign the right reason."
28: "...specie disappeared more and more. The explanations of this fact also displayed wonderful ingenuity in finding false reasons and in evading the true one."
29: "The disappearance of specie was the result of a natural law as simple and as sure in its action as gravitation; the superior currency had been withdrawn because an inferior currency could be used." [Gresham's Law: bad money drives out good]
30-31: White here quotes the famous historian of the French revolution Von Sybel, describing how with a soon-to-be-worthless currency, a business owner receives an impulse "to invest his doubtful paper in buildings, machines and goods" but the prosperity necessarily collapses, "succeeded by a crisis all the more destructive the more deeply men had engaged in speculation under the influence of the first favorable prospects." The result was a collapse in manufacturing and commerce, just like it later happened in Austria, Russia, Venezuela, Zimbabwe, anywhere where money printing was attempted.
31-32: Comments here on how inflation hurt everyone, but it hurt working-class and poor people the worst. Also there was a general increase in uncertainty, because nobody knew whether the money would be worth anywhere near its current value in the future. "The business of France dwindled into a mere living from hand to mouth." On the "obliteration of thrift from the minds of the French people" as a result, "a loose luxury spread throughout the country. A still worse outgrowth was the increase of speculation and gambling. ... at large there grew a dislike of steady labor and a contempt for moderate gains and simple living." "...multitudes of small fortunes were absorbed and lost while a few swollen fortunes were rapidly aggregated in a larger cities." [You really wreck your wealth distribution with inflation too.]
33: Gambling and corruption broke out throughout society, even Mirabeau himself who "had risked imprisonment and even death to establish a constitutional government was now secretly receiving heavy bribes." [It was later discovered that Mirabeau was a paid agent of the monarchy]. Legislators would use "legislative action to raise and depress securities for stock-jobbing purposes." [This sure rhymes with today's options and stock buying of major US legislators like Nancy Pelosi and others: tremendous investment fortunes have been built up by many legislators and senators even after a short period in office.] "...nearly all concerned were guillotined for it."
Part II
33: Comments here on the breaking down of the morals of the country, partly due to the sudden building up of ostentatious wealth and a gambling, speculative spirit, but then an even worse result: "the decay of a true sense of national good faith." [Again, gosh, this sounds so familiar and rhymes so well with today. We saw the same thing in Weimar Germany and in the post-collapse Soviet system, and we are seeing the stages of the same process in the USA.]
34-35: The author cites the growth of "a vast debtor class in the nation, directly interested in the depreciation of the currency in which they were to pay their debts... These were speedily joined by a far more influential class--by that class whose speculative tendencies had been stimulated by the abundance of paper money, and who had gone largely into debt, looking for a rise in nominal values... Before long, the debtor class became a powerful body extending through all ranks of society...all pressed vigorously for new issues of paper.. "
35: "Strange as it might seem to those who have not watched the same causes at work at a previous period in France and at various times in other countries, while every issue of paper money really made matters worse, a superstition gained ground among the people at large that, if only enough paper money were issued and were more cunningly handled the poor would be made rich. Henceforth, all opposition was futile."
35ff: Statistics here on the depreciation of the 100 livres note after the latest issue of paper on December 1791 (which cumulatively brought all issuance to a total of 2,100 million); the value had already fallen to 80, then quickly to 68, and by February of 1792 it had fallen to 60, then later that month to 53 livres.
36: Then a new minister of finance, Clavière, who was "especially proud of his share in the invention and advocacy" of the assignat program, and who promptly ordered a "fifth great issue of paper money, amounting to three hundred millions."
37: "Henceforward, until the end of this history, capital was quietly taken from labor and locked up in all the ways that financial ingenuity could devise. All that saved thousands of laborers in France from starvation was that they were drafted off into the army and sent to be killed on foreign battlefields." [As gross as this sounds, this is exactly how it tends to play out: inflations are followed by war, and wars are followed by inflations. And it's rarely the sons of those in power who fight, it's always all the other peoples' sons.]
37: Note also here Daniel Webster's quote "...of all the contrivances for cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money."
37-8: Next, the confiscation of the large landed estates whose owners had fled the country, in 1792-1793 those were seized. This was justification for issuing still more paper, again under the pledge that they were guaranteed by the value of these lands. This sent inflation much higher and it was clear to everyone what was happening, but representatives of the legislature continued to blame everything but the real reason. [Again, this is right out of the playbook: blame greedy corporations, blame greedy grocery stores, but make sure you never blame those responsible: those who are debasing the money.]
38: Note also here the volatility that shows up in instances where the currency from time to time actually rose, violently. In November 1792 the franc went from 57 to 69; from September to December 1793 the assignats went from 30 to above 50, etc. [It's normal to have really vicious contra-moves against the overall inflationary/debasing trend.]
39: Note also inflations typically trigger rage among people, resulting in mob violence. See for example the February 28th, 1793 when a mob of men and women plundered the stores and shops of Paris. Note that the politicians like Marat and others made further inflammatory comments like "the people, by hanging shopkeepers and plundering stores, could remove the trouble"; see also Roux, who said "shopkeepers were only giving back to the people what they had hitherto robbed them of." The politicians again did the predictable thing by blaming others, never themselves.
39: "...now came a series of amazing expedients--and yet all perfectly logical." First was the "forced loan" program, assigned to all men of certain income levels whether they were married or unmarried.
40: "But if this first expedient shows how naturally a 'fiat' money system runs into despotism, the next is no less instructive in showing how easily it becomes repudiation and dishonor." First, the initial issue of paper carried the portrait of the king, while later issues did not. This led to a difference in value where the image of the king on the first issue of paper had a higher value because there was a presumed guarantee of the king, and furthermore, a presumption that the Bourbons would return and would repudiate all of the later paper issued by the Republic. So the government decided to repudiate that earliest issue (!) and would not accept it for payment of taxes or for buying property from the state that was seized, etc. Absolutely hypocritical, but again, sadly, predictable.
41: The third outgrowth was the Maximum, a set of price-fixing schemes, all of which were set into law in September 1793. Prices of each article of necessity was fixed at 1 and 1/3 its price in 1790, with a "transportation value" added on top at a rate per league; also 5% was added for the profit of the wholesaler, and then 10% added to the profit of the retailer. "Nothing could look more reasonable."
41: Farmers then brought in as little produce as they possibly could, this increased scarcity, caused rationing, etc., thus under the Maximum scheme "shopkeepers therefore could not sell such goods without ruin. The result was that very many went out of business and the remainder forced buyers to pay enormous charges under the very natural excuse that the seller risked his life in trading at all. That this excuse was valid is easily seen by the daily lists of those condemned to the guillotine, in which not infrequently figure the names of men charged with violating the Maximum laws."
42: [Another example of an expedient caused by inflation that leads to more despotism and more destruction of the fabric of society] "To detect goods concealed by farmers and shopkeepers, a spy system was established with a reward to the informer of one-third of the value of the goods discovered... The farmer often found that he could not raise his products at anything like the price required by the new law, and when he tried to hold back his crops or cattle, alleging that he could not afford to sell them at the price is fixed by law, they were frequently taken from him by force and he was fortunate if paid even in the depreciated fiat money--fortunate, indeed, if he finally escaped with his life."
43: Increasingly strict laws for imprisonment, fines and sometimes even death for selling gold or silver coin, for offering any discounted value in a transaction between paper and specie, or refusing to accept payment in assignats or accepting assignats at a discount, or even asking in what money payment was to be made. (!)
43: Note also that the Maximum law was abolished a little over a year later: this is another takeaway that what's happening step by step may be logical, but you just have to keep your head down and stay out of the way, and the law gets quickly reversed, despite a brief period of incredibly ferocious enforcement, price fixing typically gets reversed once it's clear (to the one-step-ahead thinkers who instituted it) that it has the opposite effect from what is intended.
43: "Whenever any nation intrusts to its legislators the issue of a currency not based on the idea of redemption in standard coin recognized in the commerce of civilized nations, it intrusts to them the power to raise or depress the value of every article in the possession of every citizen" [This is a money quote here. And of course when you combine this power with a state's power to confiscate, execute its citizens and imprison them, you have created a mechanism for total despotism, driven logically and ineluctably from a hyperinflation.]
45: On the false (but always widely held) idea that there is a scarcity of currency during a hyperinflation: "But every thoughtful student of financial history knows that this cry always comes after such issues--nay that it must come--because in obedience to a natural law, the former scarcity, or rather insufficiency of currency recurs just as soon as prices become adjusted to the new volume..."
46: More desperate efforts tried, enormous money printing continues, forced loans, the people were urged to convert assignats into direct national debt, also a law confiscating the property of all Frenchmen who left France after 1789 and who had not returned, even a 1793 proposal for a law making investments in foreign countries by Frenchman punishable with death, etc. all with "the guillotine looming up in the background."
46: The author also asserts that the men making these decisions were actually capable financiers, it all just shows "how powerless are the most skillful masters of finance to stem the tide of fiat money calamity when once it is fairly under headway."
47: More statistics here, by the end of 1794 there were 7 billion assignats in circulation. By May 1795 there were 10 billion, by July, 14 billion. (!) The value of 100 francs in paper fell to four francs in gold, then to three, then to two and a half.
47: Note here also there was a very brisk trade in permanent property: this is part of the illusory economic activity you get when you devalue your currency! The savvy person on this trade is the one getting physical, permanent, less- or non-debaseable goods in return for rapidly depreciating paper. Even if you pay an excessive price for those assets, it's still worth doing. "It was simply a feverish activity caused by the intense desire of a large number of the shrewder class to convert their paper money into anything and everything which they could hold and hoard until the collapse which they foresaw should take place. This very activity in business simply indicated the disease."
48: More stats here: the author now flips the fraction and describes the value of the gold louis d'or money in assignats: August 1st 1795: the gold louis worth 25 francs was worth 920 "paper" francs; September 1st 1,200 francs, November 1st 2,600 francs, December 1st 3,050 francs, in February 1796 it was worth 7,200 francs. "Prices of all commodities went up nearly in proportion... Everything was enormously inflated in price except the wages of labor."
49: Laws establishing a scale of proportion or tables of depreciation used to handle people paying debts after a hyperinflation, also futile. [A modern example of something similar would be the UF in Chile used to adjust mortgages upward for inflation].
49: "On whom did this vast depreciation mainly fall at last?" Almost exclusively onto working classes and employees "and men of small means, whose property was not large enough to invest in stores of goods or national lands. Financiers and men of large means were shrewd enough to put as much of their property as possible into objects of permanent value. The working classes had no such foresight or skill or means. On them finally came the great crushing weight of the loss."
50: Note here also that the various government factions all started sending each other to the guillotine, finally leading to the Robespierre period. And then in October 1795, a new government, The Directory, came into power, and it printed even more money than the governments before. Also the louis d'or gold coins were worth 15,000 francs in paper money by February 1796, and the ultimate total quantity of assignats in circulation was 39.9 billion. [The numbers always start out small, but ultimately end up insane. See the numbers in the late stages of the Weimar inflation too.]
Part III
51-2: The Directory government tried various expedients like a forced loan from the wealthy classes, or proposing a National Bank (a new one). Finally they issued new paper which was to be "fully secured" and "as good as gold," called mandats. The author notes that this had been tried before, first in the USA's colonial period (1737), and second during the USA's early Confederation period (1781), and third by the Southern Confederacy, always in vain. Note also that the Directory government was also issuing assignats at the same time it was discrediting them by issuing the new mandats.
53: We see the same playbook here: laws, penalties, fines and prison terms were imposed on anyone speaking against the currency. The government tried to decree that assignats above the value of 100 francs should cease to circulate after June 1796: this obliterated any last vestige of confidence in government notes of any kind. Then a "commodity" paper money (where one franc equals 10lbs of wheat) was attempted, it also failed, etc. [Again, these are wonderful examples of a government operating one step at a time and thinking only one step ahead, without self-awareness and with zero awareness of second- or third-order effects of any of their actions. It's fascinating how this gets repeated over and over and over again in history.]
54: The author here shows some prices of "articles of ordinary use" (converted into dollar terms) comparing prices from 1790 to 1795.
* A bushel of flour: 40c to $45
* A bushel of coal: 7c to $2
* A pound of sugar: 18c to $12.50
* A pair of shoes: $1 to $40
[You can't help but look at these price inflations and be horrified. Imagine a more than 100x increase in the price of flour, or a 40x increase in the price of shoes! This would take a relatively inexpensive $59 pair of tennis shoes today to $2,360.]
55: The author cites Tallien, the French politician and demagogue reformer, as being "skillful enough to become millionaires" by playing the inflation the right way. It's interesting here to see how A.D. White is so repulsed by those who took the other side of the trade. "The luxury and extravagance of the currency gamblers" and "these gay creatures of the Directory period."
56: Interesting anecdote here that Britain "excellently" counterfeited French money and shipped it into France.
57: The acute suffering after this paper currency period lasted nearly ten years, per the author, "but the period of recovery lasted longer than the generation which followed. It required fully forty years to bring capital, industry, commerce and credit up to their condition when the Revolution began."
57ff: Now the author goes through the order of cause and effect of the hyperinflation after having presented the history in chronological order: First, after a "reluctant and careful" issue of paper there was an immediate improvement in activity in business, then a clamor for more paper money, but then the dike was broken and a current of paper currency "poured through"... "As a natural consequence a great debtor class grew rapidly, and this class gave its influence to depreciate more and more the currency in which its debts were to be paid." "Manufacturers at first received a great impulse" but then the "overproduction and overstimulus proved as fatal to them as to commerce." Any signs of the revival of business was usually by people trying "to exchange paper money for objects of permanent value."
58ff: [Continuing the cause-effect discussion] Merchants were forced to raise prices to cover depreciation of merchandise and also to cover the risk of loss from fluctuation; the demand for labor was diminished, people were thrown out of employment, and since there was an oversupply of laborers, then wages went down. Mercantile classes thought themselves exempt because they could raise prices, but then what happened was fluctuations and uncertainties caused purchases to become less in amount and payments less sure; this increased insecurity in their domain as well. There was still more clamors for more paper and it made these problems all worse and worse, just with a momentary initial stimulus which came after each issue of fresh currency.
59ff: [Continued] Then a cause and effect on the moral development of France, the inflation produced a "speculating class", "all business became a game of chance, and all businessmen, gamblers." "Then, too, as values became more and more uncertain, there was no longer any motive for care or economy, but every motive for immediate expenditure and present enjoyment [see here also the decadence of Weimar Germany]. So came upon the nation the obliteration of thrift." This led to "cheatery in the nation at large and corruption among officials and persons holding trusts." "...women set fashions of extravagance in dress and living that added to the incentives to corruption." "National Honor was thought a fiction cherished only by hypocrites. Patriotism was eaten out by cynicism."
60: "Thus was the history of France logically developed in obedience to natural laws; such has, to a greater or less degree, always in the result of irredeemable paper, created according to the whim or interest of legislative assemblies rather than based upon standards of value permanent in their nature and agreed upon throughout the entire world."
60: The author cites "a law of accelerating issue and depreciation": "It was comparatively easy to refrain from the first issue; it was exceedingly difficult to refrain from the second; to refrain from the third and those following was practically impossible."
60: "It ended in the complete financial, moral and political prostration of France--a prostration from which only Napoleon could raise it."
61: Napoleon, with France under substantial financial pressure, was urged to resort to paper money, and he wrote this to his finance minister, "While I live I will never resort to irredeemable paper." White also notes, interestingly, that even after Waterloo, a complete change of dynasty, and heavy expenses for war and indemnities, "France experienced no severe financial distress." [So they probably never needed to resort to money printing in the first place...]
To Read:
***Levasseur: Histoire des classes ouvrières et de l'industrie en France
Challamel: Sur la Révolution
Henri Martin: Histoire de France
Dewamin: Cent ans de numismatique française
Von Sybel: History of the French Revolution
Sumner: History of American Currency
Jevons: Money
Louis Blanc: Histoire de la Révolution
Mallet du Pan: Memoirs
Jon Stuart Mill: Political Economy
Morse: Life of Alexander Hamilton