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have been severely felt; the four hundred millions of paper money then issued had simply taken the place of a similar amount of specie. But soon there came another result: times grew less easy; 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. The old remedy immediately and naturally occurred to the minds of men. Thoughtless persons throughout the country began to cry out for another issue of paper; thoughtful men then began to recall what their fathers had told them about the seductive path of paper-money issues in John Law's time, and to remember the prophecies that they themselves had heard in the debate on the first issue of assignats less than six months before.

In that debate, as we have seen, Maury and Cazalès foretold trouble. Necker, who was less suspected of reactionary tendencies, had certainly feared danger. The strong opponents of paper had prophesied, at that time, that, once on the downward path of inflation, the nation could not be restrained, and that more issues would follow. The supporters of the first issue had asserted that this was a calumny; that France could and would check these issues whenever she desired.

The condition of opinion in the Assembly was, therefore, chaotic; a few schemers and dreamers were loud and outspoken for paper money; many of the more shallow and easy-going were inclined to yield; the more thoughtful endeavored manfully to breast the current.

Into the midst of this debate is brought a report by Necker. Most earnestly he endeavors to dissuade the Assembly from the proposed issue; suggests that other means can be found for accomplishing the result, and predicts terrible evils. But the current is again running too fast. The only result is that Necker is spurned as a man of the past. He at last sends in his resignation, and leaves France forever. The paper-money demagogues shout for joy at his departure; their chorus rings through the journalism of the time. No words can express their contempt for a man who cannot see the advantages of

filling the treasury with the issues of a printing press. Marat, Hébert, and Camille Desmoulins are especially jubilant.

The nation at large now began to take part in the debate; thoughtful men saw that here was the turning point between good and evil; that the nation stood at the parting of the ways. Most of the great commercial cities bestirred themselves and sent up remonstrances against the new emission, twentyfive being opposed and seven being in favor of it. But on September 27, 1790, came Mirabeau's great final speech. In this he dwelt first on the political necessity involved, declaring that the most pressing need was to get the government lands into the hands of the people, and so to commit the class of landholders thus created to the nation, and against the old privileged classes.

Through the rest of the speech there is one leading point enforced with all his eloquence and ingenuity, the thorough excellence of the proposed currency and the stability of its security. He declares that, being based on the pledge of public lands, and convertible into them, the notes are better secured than if redeemable in specie; that the precious metals are only employed in the secondary arts, while the French paper money represents the first and most real of all property, the source of all production, the land itself; that, while other nations have been obliged to emit paper money, none has ever been so fortunate as the French nation, for none has ever before been able to give landed security for its paper; that whoever takes French paper money has practically a mortgage to secure it on landed property which can be easily sold to satisfy his claims, while other nations have only been able to give a vague claim on the entire nation. "And," he cries, "I would rather have a mortgage on a garden than on a kingdom!"

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In vain did Maury show that, while the first issues of John Law's paper had brought apparent prosperity, those that followed brought certain misery; in vain did he quote from a book published in John Law's time, showing that Law was at first

considered a patriot and friend of humanity; in vain did he hold up to the Assembly one of Law's bills, and appeal to their memories of the wretchedness brought on France by them; nothing could resist the eloquence of Mirabeau. Barnave follows: says that "Law's paper was based upon the phantoms of the Mississippi; ours upon the solid basis of ecclesiastical lands," and proves that the assignats cannot depreciate further. Prudhomme's newspaper pours contempt over gold as security for the currency, extols real estate as the only true basis, and is fervent in praise of the convertibility and self-adjusting features of the proposed scheme. In spite of all this plausibility and eloquence, a large minority stood firm to their earlier principles; but on the 29th of September, by a vote of 508 to 423, the deed was done; a bill was passed authorizing the issue of eight hundred millions of new assignats, but solemnly declaring that in no case should the entire amount put in circulation exceed twelve hundred millions. To make assurance doubly sure, it is also provided that, as fast as the assignats were paid into the treasury for land, they should be burned; and thus a healthful contraction be constantly maintained.

France was now fully committed to a policy of inflation; and, if there had been any doubt of this before, it was soon proved by an act of the government, very plausible, but none the less significant as showing the exceeding difficulty of stopping a nation once in the full tide of a depreciated currency. The old cry of the lack of a circulating medium" broke forth again; and especially loud were the clamors for more small bills. This resulted in an evasion of the solemn pledge that the circulation should not go above twelve hundred millions, and that all assignats returned to the treasury for land should immediately be burned. Within a short time there had been received into the treasury for lands one hundred and sixty million francs in paper. By the terms of the previous acts this amount ought to have been retired. Instead of this, under the plea of necessity, one hundred millions were reissued in the form of small notes.

Yet this was but as a drop of cold water to a parched throat. Although there was already a rise in prices which showed that the amount needed for circulation had been exceeded, the cry for more circulating medium" was continued. The pressure for new issues became stronger and stronger. The Parisian populace and the Jacobin Club were especially loud in their demands for them; and a few months later, on June 19, 1791, with few speeches, in a silence very ominous, a new issue was made of six hundred millions more; less than nine months after the former great issue, with its solemn pledges as to keeping down the amount in circulation. With the exception of a few thoughtful men, the whole nation again sang pæans.

In this comparative ease of a new issue is seen the action of a law in finance as certain as the action of a similar law in natural philosophy. If a material body fall from a height, its velocity is accelerated, by a well-known law in physics, in a constantly increasing ratio: so in issues of irredeemable currency, in obedience to the theories of a legislative body, or of the people at large, there is a natural law of rapidly increasing issue and depreciation. The first inflation bill was passed with great difficulty, after a very sturdy resistance, and by a majority of a few score out of nearly a thousand votes; but you observe now that new inflation measures are passed more and more easily, and you will have occasion to see the working of this same law in a more striking degree as this history develops itself.

Nearly all Frenchmen now became desperate optimists, declaring that inflation is prosperity. Throughout France there became temporary good feeling. The nation was becoming fairly inebriated with paper money. The good feeling was that of a drunkard after his draught; and it is to be noted, as a simple historical fact, corresponding to a physiological fact, that, as the draughts of paper money came faster, the periods of succeeding good feeling grew shorter.

Various bad signs had begun to appear. Immediately after this last issue came a depreciation of from eight to ten per cent; but it is very curious to note the general reluctance to assign the right reason. The decline in the purchasing power of paper

money was in obedience to one of the simplest laws in social physics; but France had now gone beyond her thoughtful statesmen, and took refuge in unwavering optimism, giving any explanation of the new difficulties rather than the right one. A leading member of the Assembly insisted, in an elaborate speech, that the cause of depreciation was simply want of knowledge and of confidence among the rural population, and proposed means of enlightening them. La Rochefoucauld proposed to issue an address to the people, showing the goodness of the currency and the absurdity of preferring coin. The address was unanimously voted.

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Attention was next aroused by another menacing fact, specie was fast disappearing. The explanations for this fact also displayed wonderful ingenuity in finding false reasons and evading the true one. A very common explanation may be found in Prudhomme's newspaper, Les Révolutions de Paris, of January 17, 1791, which declared that "coin will keep rising until the people have hung a broker." Another popular theory was that the Bourbon family were in some miraculous way drawing off all solid money to the chief centers of their intrigues in Germany.

Still another favorite idea was that English emissaries were in the midst of the people, instilling notions hostile to paper. Great efforts were made to find these emissaries, and more than one innocent person experienced the popular wrath, under the supposition that he was engaged in raising gold and depressing paper. Even Talleyrand, shrewd as he was, insisted that the cause was simply that the imports were too great and the exports too little. As well might he explain the fact that, when oil is mingled with water, water sinks to the bottom, by say ing that it is because the oil rises to the top. This disappearance of specie was the result of a natural law as simple and sure in its action as gravitation: the superior currency had been withdrawn because an inferior could be used.

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Still another troublesome fact began now to appear. Though paper money had increased in amount, prosperity had steadily diminished. In spite of all the paper issues business activity

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