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THE POPULAR SCIENCE MONTHLY 



French Assembly reported that " the 

 people demand a new circulating me- 

 dium ; " that " the circulation of pa- 

 per is the best of operations ; " that 

 " it is the most free, because it reposes 

 on the will of the people;" that "it 

 will bind the interests of the citizen to 

 the public good." 



The Government had appropriated 

 the vast property of the French Church, 

 amounting in value to about four thou- 

 sand million francs, and this was to be 

 the security of the paper. According- 

 ly, in April, 1790, the "Government is- 

 sued four hundred million francs in as- 

 signats paper - money secured by a 

 pledge of productive real estate, and 

 bearing interest to the holder at three 

 per cent." What could be more se- 

 cure ? It was maintained that such a 

 currency would immediately prove it- 

 self better than coin. 



" The first result of this issue was 

 apparently all that the most sanguine 

 could desire ; the Treasury was at once 

 greatly relieved ; a portion of the pub- 

 lic debt was paid ; creditors were en- 

 couraged ; credit revived ; ordinary ex- 

 penses were met, and the paper-money 

 having thus been passed from the Gov- 

 ernment into the midst of the people, 

 trade was revived, and all difficulties 

 seemed past." 



Possibly, if the Government could 

 have stopped with these temporary ad- 

 vantages, no great harm would have 

 been done. But the difficulty about 

 money is, that there is never thought 

 to be enough of it. The benefit of real 

 money (coin) is to set a stubborn limit 

 to this universal want it cannot be 

 got without earning- it or giving equiv- 

 alent property for it. The curse of 

 pseudo-money (irredeemable paper) is, 

 that it panders to the universal greed 

 because any amount of it can be manu- 

 factured and set afloat at any time. 

 And so, of course, the French, after the 

 first taste, wanted more. The further 

 issue was stoutly resisted by the ablest 

 men, but the current set so strong, and 



the demagogues were so plausible, that 

 the measure was carried, and in Sep- 

 tember the Government issued eight 

 hundred million assignats, " solemnly 

 declaring that in no case should the 

 entire amount put in circulation exceed 

 twelve hundred millions." 



Great were the rejoicings on every 

 side. Gold was to lose all value, as it 

 was a superfluity, and the nation was 

 committed to the policy of inflation. 

 But the old cry of the " lack of a cir- 

 culating medium " soon broke forth 

 again. A hundred millions were is- 

 sued under the plea of a want of small 

 notes. On June 19, 1791, less than 

 nine months after the former great is- 

 sue, six hundred millions more were 

 put in circulation. Next came depre- 

 ciation of the currency, a loss of its 

 purchasing power, and a rise in prices. 

 Some said that this was due to igno- 

 rance in the rural districts, and the 

 remedy proposed was " education of 

 the people." M. Prudhomme's news- 

 paper, however, declared that " coin 

 will keep rising until the people have 

 hung a broker." People naturally be- 

 gan to be alarmed, and to convert the 

 paper into coin and hoard it up. This 

 was regarded as criminal, and Marat 

 asserted that death was the proper 

 penalty for persons who thus hid their 

 money. 



But, after the first stimulus of these 

 issues, business soon became depressed, 

 trade stagnated, the manufactories were 

 closed, and thousands of workmen were 

 discharged. Uncertainty and fluctua- 

 tion of values followed, speculation 

 set in, and, in the language of Louis 

 Blanc, " commerce was dead ; betting 

 took its place." "In the cities now 

 arose a luxury and license which is a 

 greater evil than the plundering which 

 ministers to it. In the country the 

 gambling spirit spread more and more ; 

 nor was this reckless and corrupt spirit 

 confined to business-men ; it began to 

 break out in official circles ; and public 

 men who, a few years before, had been 



