A Promise Printed on Land: The Assignats of Revolutionary France

“On February 19, 1796,” the historian Andrew Dickson White writes, “the copper plates of the assignats were broken up, and it was decreed that no more assignats be issued” (White 68). In their place came a new paper, the mandats territoriaux, promised to be “fully secured, and as good as gold” and backed again by public land (White 68 to 69). White’s verdict on them is short: “Never were great expectations more cruelly disappointed. Even before they could be issued from the press, the mandats fell to thirty per cent of their nominal value” (White 69).

A paper backed by land had failed, and the cure on offer was another paper backed by land. To see how France came to that point, it helps to go back six years, to a vote.

On November 2, 1789, the National Assembly of France took a roll-call vote on a motion read by the Comte de Mirabeau. The president announced the result, 568 in favor, 346 against, and 40 votes void, and with it a decree that “all ecclesiastical property is at the disposal of the nation, on condition of providing in a suitable manner for the costs of worship, the upkeep of its ministers, and the relief of the poor” (Archives parlementaires 9:649; translation ours). Before the year was out, that property had become the security for a new kind of paper. Within six years the paper was nearly worthless.

Last week we looked at the potlatch, where wealth moved through giving. This week the subject is a promise, and the people who made it left an unusually full paper trail. What follows tells the story of the assignats, from that vote to the broken plates, through their own words: the decrees that created them, the address the Assembly wrote to defend them, a speech by their best-known champion in the Assembly, the scorn of their best-known foreign critic, and the historian whose account first appeared 150 years ago. The aim is not to argue a policy. It is to set the documents in order and let readers weigh them.

A claim on the land

The Assembly turned the Church’s property into a financing plan in a decree of December 19 and 21, 1789. Article 10 put Crown lands up for sale, “except the forests and royal residences of which the King may wish to reserve the enjoyment,” along with enough Church lands to reach a combined value of 400 million livres (Duvergier 1:72; translation ours). Article 12 created the notes:

There shall be created, on the extraordinary fund, assignats bearing interest at five percent, up to the value of the said properties to be sold, which assignats shall be accepted in preference in the purchase of the said properties. (Duvergier 1:73; translation ours)

In this first form an assignat was closer to an interest-bearing bond than to cash. It paid interest, and it could be spent on one thing in particular: the land behind it. The same article scheduled the notes to be retired, through the land sales and other receipts, at 120 million livres in 1791, 100 million in 1792, and so on.

Four months later the terms changed. The decree of April 17 and 22, 1790, declared in article 3 that the assignats “shall circulate as money among all persons throughout the whole extent of the kingdom, and shall be received as hard coin in all public and private cash offices” (Duvergier 1:147; translation ours). Article 4 cut their interest from five percent to three. Article 5 set the first notes at 1,000, 300, and 200 livres.

This is the moment the assignat became legal tender. The notes were still tied to land on paper, but the law now asked every shopkeeper and creditor in France to take a promise as though it were coin.

The Assembly knew it was asking a great deal, and on April 30, 1790, it adopted an address to the nation, read for the finance committee by the Marquis de Montesquiou. Its authors did not pretend that paper had value of its own. The address states the rule plainly:

A paper money without effective value (and it can have none if it does not represent specific properties) is inadmissible in commerce, to compete with the metals, which have a real value, independent of any convention. (Archives parlementaires 15:346; translation ours)

Their claim was that the assignats were different because they did represent specific property. “The properties whose proceeds they represent form their intrinsic value,” the address says; “this value is as evident as that of the metal contained in our usual coinage” (Archives parlementaires 15:345; translation ours).

The argument is careful, and it rests entirely on a condition: that the paper stay in proportion to the land.

How much land was there? A 2005 Economic Commentary from the Federal Reserve Bank of Cleveland sets the figures side by side: “45 billion French pounds of assignats were issued between 1790 and 1796, whereas the sale of goods from the Church is estimated to have been worth two to three billion French pounds at most” (Dutu, Nosal, and Rocheteau 2). Those two numbers sit underneath everything that follows.

The champion and the critic

On August 27, 1790, Mirabeau, whom White later called “the great orator of the Assembly” (White 15), rose to propose a far larger issue. He opened with a confession. He had been “astonished at first, even frightened, I confess, by the measure of the assignats-money” (Archives parlementaires 18:358 to 359; translation ours). Then he restated the bargain the Assembly had made:

You said to the holders of assignats: here are landed estates; the nation pledges its honor and its good faith to exchange them in kind, or to exchange the proceeds of their sale for these assignats which represent them; and if money is itself only a representation of the goods of life, you could give, and people were bound to receive as money, this representation of landed properties, which are the first of riches. (Archives parlementaires 18:359; translation ours)

His countrymen, he said, knew very well how to tell what was called paper money elsewhere, and what France had once called paper money, apart “from our territorial paper” (Archives parlementaires 18:359; translation ours). He proposed to pay at once the debt then due, the arrears, and the compensation owed for abolished offices, “and I propose for that a sufficient issue of assignats-money” (18:360; translation ours).

In a published letter to the writer Cerutti, dated January 6, 1789, Mirabeau had said that paper money forced on France could only be seen as “un foyer de tyrannie, d’infidélité & de chimères, une véritable orgie de l’autorité en délire,” which White renders “a nursery of tyranny, corruption, and delusion; a veritable debauch of authority in delirium” (Correspondance 39; White 16). A man under the pressure of an empty treasury had changed his mind. The record shows both positions in his own name.

As Mirabeau argued for more paper, Edmund Burke, the Irish-born statesman, watched from Britain and disliked nearly everything he saw. In Reflections on the Revolution in France, published in London in 1790, he reported that the new paper “felt an almost immediate depreciation of five per cent. which in little time came to about seven” (Burke 345). He mocked what he saw as the Assembly’s single answer to every difficulty:

Are the old assignats depreciated at market? What is the remedy? Issue new assignats. (Burke 339)

He also mocked the Assembly’s leaders for the “noble indignation” they felt “on hearing the magic lanthorn in their shew of finance compared to the fraudulent exhibitions of Mr. Law” (Burke 346).

Burke wrote as an opponent, and early. His figures cover only the first months, and his purpose was to warn Britain away from the Revolution. He is valuable for what a hostile contemporary noticed, and his wit should be weighed as argument, not as accounting.

Counting in gold

The fullest English account of what came next is Andrew Dickson White’s Fiat Money in France. White opens in plain terms: “Near the end of the year 1789 the French nation found itself in deep financial embarrassment: there was a heavy debt and a serious deficit” (White 1). Then the pattern repeats. “By the end of August, within four months after the issue of the four hundred million assignats, the Government had spent them, and was again in distress” (White 14). New issues followed, “until at the beginning of 1796 over forty-five thousand million francs had been issued” (White 63).

As confidence fell, the penalties rose. White describes a law of April 1793 that punished selling coin for more than its face value in paper “with a penalty of six years’ imprisonment in irons” (White 57 to 58), and a law of August 1, 1793, proposed by Couthon, that punished selling assignats below their face value “with imprisonment for twenty years in chains” (White 60).

The market kept its own count. White tracks the paper price of the gold louis, which he values at 25 francs:

The louis d’or stood in the market as a monitor, noting each day, with unerring fidelity, the decline in value of the assignat; a monitor not to be bribed, not to be scared. (White 64)

On August 1, 1795, he writes, “the gold louis of 25 francs was worth 920 francs.” By February 1796, “it was worth in market 7,200 francs, or one franc in gold was worth 288 francs in paper money” (White 64).

White counts in francs, but most assignats were denominated in livres. A law of April 7, 1795, ruled that “the unit of money will take the name franc, to replace that of livre used until today” (Loi relative aux poids et mesures, art. V, p. 3; translation ours), and a law of August 15, 1795, made the franc the Republic’s monetary unit. The last assignats, created in January 1795, were already printed in francs. Even the measuring stick was changing.

That is how the story reached the February morning when the copper plates were broken. The land had been asked to stand behind far more paper than it could cover, and the mandats were asked to try again.

White first read his study as a paper before members of both parties in Washington on April 12, 1876, and before the Union League Club in New York the next day (White 1n), during the American argument over greenbacks. It was reprinted in various editions, “among these one for campaign purposes,” and in 1896 he introduced a new edition by saying it “may be of use in showing to what folly, cruelty, wrong, and ruin the passion for fiat money may lead” (White iv).

That does not make White wrong. His footnotes point to the decrees, memoirs, and price tables he used, so readers can check him. It does tell us what he set out to show, and it explains why his account dwells on the dramatic. On why ordinary people accepted, hoarded, or refused the notes, and on how war, unrest, and the confiscation itself shaped those choices, he says less.

Read in order, the documents tell a consistent story. The Assembly began with a real asset and a sound-sounding rule: paper has no value unless it represents specific property. It then made the paper compulsory, issued it far beyond the value of the property, and finally tried to hold its value up by law. Its supporters were not fools, its critics were not neutral, and its best-known historian wrote with a purpose of his own.

The assignats were a promise printed on land. The decrees, the speeches, and the price of a gold coin record what became of it.

Note on Terms

Assignat. From the French assigner, to assign. The December 1789 decree created assignats “up to the value of the said properties to be sold” and made them acceptable “in preference in the purchase of the said properties” (Duvergier 1:73; translation ours).

Fiat money. Money whose value rests chiefly on a government’s decree rather than on a commodity it can be exchanged for. The phrase appears here in the title and preface of Andrew Dickson White’s study.

Gold louis (louis d’or). A French gold coin. White values it at 25 francs and uses its price in paper money to track the fall of the assignats.

Legal tender. A form of payment the law says must be accepted to settle a debt. The decree of April 1790 gave the assignats this status.

Livre and franc. The livre was France’s old unit of account. The franc replaced it during the 1790s, so sources from the period count the same paper in both. English sources sometimes call the livre the French pound, as the 2005 Cleveland Fed commentary does.

Mandats territoriaux. The paper that replaced the assignats in 1796. Like the assignats, the mandats were backed by public land.

Revolutionary calendar. The calendar of the French Republic, in which the later laws cited here are dated. The law of April 7, 1795, is dated 18 germinal, year III, and the law of August 15, 1795, is dated 28 thermidor, year III.

Names

John Law. Burke’s “Mr. Law.” The Scot whose scheme had shaken France seventy years before Burke wrote. As the economist François Velde summarizes it, “From 1716 to 1720, a Scotsman named John Law undertook a radical restructuring of French public finances,” and the System “ultimately unraveled with a coincident, and dramatic, fall in the market value of both the money and the equity” (Velde 1).

Works Cited

Translations from French are ours; the French original of each passage is in the source cited beside it.

Archives parlementaires de 1787 à 1860. First series. Edited by J. Mavidal and E. Laurent. Paris: Paul Dupont. Vol. 9, session of November 2, 1789, https://archive.org/details/archivesparlemen09pariuoft; vol. 15, session of April 30, 1790, Adresse de l’Assemblée nationale aux Français sur l’émission des assignats-monnaie, pp. 343 to 347, https://archive.org/details/archivesparlemen15pariuoft; vol. 18 (1884), session of August 27, 1790, speech of Mirabeau, pp. 358 to 360, https://archive.org/details/archivesparlemen18pariuoft.

Bibliothèque nationale de France. “Assignat de cent francs, créé le 18 nivôse l’an 3.” Gallica. https://gallica.bnf.fr/ark:/12148/btv1b8412435j.

Burke, Edmund. Reflections on the Revolution in France. London: J. Dodsley, 1790. https://archive.org/details/reflections00burkuoft.

[Cerutti, J.-A.-J., and Mirabeau]. Correspondance entre M. C*** et le comte de Mirabeau, sur le rapport de M. Necker, et sur l’arrêt du Conseil du 29 décembre, qui continue pour six mois, force de monnoie au papier de la Caisse-d’escompte. [S.l.], 1789. Mirabeau to Cerutti, January 6, 1789, p. 39. https://archive.org/details/correspondanceen00ceru.

Correspondance entre M. C*** et le comte de Mirabeau. See Cerutti, J.-A.-J., and Mirabeau.

Dutu, Richard, Ed Nosal, and Guillaume Rocheteau. “The Tale of Gresham’s Law.” Economic Commentary, Federal Reserve Bank of Cleveland, October 1, 2005. https://www.clevelandfed.org/-/media/project/clevelandfedtenant/clevelandfedsite/publications/economic-commentary/2005/ec-20051001-the-tale-of-greshams-law-pdf.pdf.

Duvergier, J.-B., ed. Collection complète des lois, décrets, ordonnances, règlemens, et avis du Conseil d’État. Vol. 1. 2nd ed. Paris: A. Guyot et Scribe, 1834. https://archive.org/details/collectioncompl19duvegoog.

FranceArchives. “Création du franc Germinal.” French Ministry of Culture. https://francearchives.gouv.fr/pages_histoire/38864.

Loi relative aux poids et mesures, du 18 germinal, l’an troisième. Paris: Imprimerie de la République, year III [1795]. https://archive.org/details/loirelativeauxpo00fran.

Velde, François R. “Government Equity and Money: John Law’s System in 1720 France.” Working Paper 2003-31, Federal Reserve Bank of Chicago, November 30, 2003. https://www.chicagofed.org/publications/working-papers/2003/2003-31. PDF: https://fraser.stlouisfed.org/files/docs/historical/frbchi/workingpapers/frbchi_workingpaper_2003-31.pdf.

White, Andrew Dickson. Fiat Money in France: How It Came, What It Brought, and How It Ended. New and revised edition. New York: D. Appleton, 1896. Cover title: Fiat Money Inflation in France. https://archive.org/details/fiatmoneyinflat00whit.

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