their nominal amount, the destruction of debts, the famine from the scarcity of provisions, the laws of the maximum, the penalty of death enacted against all who should keep back their produce from the market. All specie disappeared from the country and from circulation; those who possessed any, not deeming it secure from revolutionary violence, exported it to London, Hamburg, Amsterdam, and Geneva. But many persons stoutly maintained in pamphlets, that it was not the paper which was depreciated but the specie which had risen.

24. The intolerable misery caused by this state of things induced the Government which succeeded the Reign of Terror to make an attempt to withdraw a portion of the assignats from circulation, by demonetizing them, that is, depriving them of their quality of money, and forcing their holders to receive payment in land for them. But when a man wanted to buy food to eat, what was the use of giving him land? The report that a portion of the assignats were going to be demonetized sent down their value still lower, and a decree against it was obliged to be passed to appease their holders. All sorts of plans were devised to withdraw them from circulation; lotteries, tontines, a land bank, where they were to be lodged and bear 3 per cent. interest. But the constant issue of them, required for the necessary payments of the State, rendered all such attempts useless.

25. In January, 1796, the assignats in circulation amounted to forty-five milliards, or about £2,000,000,000, and the paper money had fallen to one-thousandth part of its nominal value. The Government then determined to issue territorial mandates, at the rate of 30 assignats to one mandate, which were to be exchangeable directly for land, at the will of the holder, on demand. The certainty of obtaining land for them made them rise for a short time to 80 per cent. of their nominal value; but necessity compelled the Government to issue £100,000,000 of these mandates secured upon land, supposed to be of that value. This prodigious issue sent the mandates down to nearly the same discount as the assignats were, and, consequently, as one mandate was equal to 30 assignats, the latter had fallen to nearly the thirty-thousandth part of their nominal value. At length on the 16th of July, 1796, the whole system was demolished at a blow.

A decree was published that every one might transact business in the money he chose, and that the mandates should only be taken at their current value, which should be published every day at the Treasury. Two days afterwards it was decreed that the national property remaining undisposed of should be sold for mandates at their current value. As a matter of course, the public creditors received payment of their debts in the same proportion.

26. No sooner, however, was this great blow struck at the paper currency, of making it pass at its current value, than specie immediately re-appeared in circulation. Immense hoards came forth from their hiding places; goods and commodities of all sorts being very cheap from the anxiety of their owners to possess money, caused immense sums to be imported from foreign countries. The exchanges immediately turned in favour of France, and in a short time a metallic currency was permanently restored. And during all the terrific wars of Napoleon the metallic standard was always maintained at its full value.

27. One thing, however, we cannot help noticing. When describing the history and effects of the assignats, nothing can be more clear and correct than the narrative of Sir Archibald Alison. He sees clearly that a difference in value between the assignat and specie was truly a discount, or fall in the value of paper. Thus he says 1—

"They for some time maintained their value on a par with the metallic currency. By degrees, however, the increasing issue of paper currency produced its usual effect on public credit; the value of money fell, while that of every other article rose in a high proportion, and at length the excessive inundation of fictitious currency caused a universal panic, and its value rapidly sank to a merely nominal ratio. Even in June, 1790, the depreciation had become so considerable as to excite serious panic."

Again, speaking of 1791, p. 305

"Public and private credit had alike perished amidst the general convulsions. Specie had disappeared from circulation. The assignat had fallen to a third of its value-[This is not quite History of Europe, Vol. II., p. 219, 7th Edit.

correct. At this time the assignat had lost one-third of its value, not fallen to one-third of it.]-and occasioned such an amount of ruin to private fortunes, that numbers already wished for a return to the ancient regime.

"While the unlimited issues of assignats, at whatever rate of discount they might pass, amply provided for all the present and probable wants of the Treasury.

"The vast and increasing expenditure of the Republic could only, amidst the total failure of the taxes, be supplied by the issue of assignats; and this, of course, by rendering paper money redundant, lowered its value in exchange with other commodities, and occasioned a constant and even frightful rise of prices.

"All the persons employed by Government, both in the civil and military departments, were paid in the paper currency at par; but as it rapidly fell, from the enormous quantity in circulation, to a tenth-part, and soon a twentieth of its real value, the pay received was merely nominal, and those in receipt of the largest apparent incomes, were in want of the common necessaries of life. Pichegru, at the head of the army of the North, with a nominal pay of 4,000 francs a month, was in the actual receipt, on the Rhine in 1795, of only two hundred francs, or £8 sterling of gold and silver.

"The funds on which the enormous paper circulation was based embracing all the confiscated property in the kingdom in land, houses, and moveables, were estimated at fifteen milliards of francs, above £600,000,000 sterling; but, in the distracted state of the country, few purchasers could be found for such immense national domains; and, therefore, the security for all practical purposes was merely nominal. The consequence was that the assignat fell to one-twelfth of its real value; in other words, an assignat for 24 francs was worth only two francs; that is, a note for a pound was worth only 1s. 8d.

"Foreign commerce having begun to revive with the cessation of the Reign of Terror, sales being no longer forced, the assignat was brought into comparison with the currency of other countries, and its enormous inferiority precipitated still further its fall.

"By no possible measure of finance could paper money, worth nothing in foreign states, from a distrust of its security, and

redundant at home from excessive issue, be maintained at anything like an equality with gold and silver. The mandates were, in truth, a reduction of assignats to a thirtieth part of their value; but, to be on a par with the precious metals, they should have been issued at one-thousandth part, being the rate of discount to which the original paper had now fallen.

"The excessive fall of the paper at length made all classes perceive that it was in vain to pursue the chimera of upholding its value. On the 16th July, 1796, the measures, amounting to an open confession of a bankruptcy which had long existed, were adopted."

28. We have quoted these passages for the purpose of shewing how completely Sir Archibald Alison, when he is speaking of the paper currency in France, acknowledges the great principle that the value of the paper currency is only to be estimated at the value it will purchase in specie, that the measure of that difference between the real and the nominal value is its depreciation, and that a payment in coin at the current value of the paper currency is a NATIONAL BANKRUPTCY. Yet, such is the amazing inconsistency of this writer, that when he comes to speak of the paper currency of England, which exhibited exactly the same phenomena, only on a smaller scale, he resolutely denies that it was depreciated. When the French assignat had lost one-third of its value compared to specie, in 1791, he acknowledges that it was depreciated; when the Bank of England note in 1811 had lost one-fourth of its value compared to specie, it was not the note which had fallen, but gold which had risen ! ! When assignats were made legal tender in France at their nominal value, specie disappeared from circulation. When Bank of England notes were substantially legal tender in England, and had lost a quarter of their nominal value, specie disappeared from circulation. Sir Archibald Alison estimates the depreciation of the assignat by the difference between the current and the nominal value of the assignat; but when the Bullion Committee estimated the depreciation of the Bank note by the difference between its nominal and its current, or market value, he reads a homily to them upon their ignorance and folly, talks of the "general delusion which so long had prevailed upon the subject, when it is recollected not only that the true principles

of this apparently difficult, but really simple, branch of national economy, which are now generally admitted, were at the time most ably expounded by many men both in and out of Parliament, but that, in the examination of some of the leading merchants of London before the Parliamentary Committee on the subject, the truth was told with a force and precision, which it now appears surprising any one could resist." This truth, which was told with such irresistible force and precision, was, that twenty-seven was equal to twenty-one! He then acknowledges that it was a national bankruptcy of the French Government to pay its notes with a less amount of specie than their nominal value; but nothing can exceed the bitterness of his invective against the Currency Act of 1819, which provided that the Bank of England should pay its notes at their full nominal value in specie. Just as if it was less a bankruptcy to pay 15s. in the pound than to pay 1s. in the pound. He sees clearly that in France the paper currency is to be estimated by the value of gold; but in England he maintains that gold is to be estimated by the value of the paper currency !! Just as if the eternal truths of science are different on different sides of the Channel : or that they are reversed according to the language they are expressed in!

29.

Sir Archibald Alison's doctrines, when he speaks of English and the French inconvertible paper currency, are clearly inconsistent. He fully allows that any difference between the nominal and the current value of the assignat was a depreciation of the assignat. He never dreams of saying that the paper assignat was the standard, and that the coin had risen in value. But when he discusses the question of-What is a pound? he says—“In truth, a pound is an abstract measure of valne just as a foot or a yard of length, and different things have at different periods been taken to denote that measure, according as the conveniency of men suggested. It was originally a pound weight of silver, and that metal was, till the present century, the standard in England, as it still is in most other countries. When gold was made the standard, by the Bank being compelled by the Act of 1819 to pay in that metal, the old word denoting its original signification of the less valuable metal was still retained. During the war, when the metallic currency dis