II

Every cause was assigned except the right one

1791 – 1794 · prices, wages, thrift, and the arrival of price control with the guillotine behind it

The depreciation of the assignats — paper secured on confiscated Church land — began at once, and the explanations began with it. A leading member of the Assembly held that the cause was a want of knowledge and confidence among the rural population, and proposed means of enlightening them. La Rochefoucauld proposed an address to the people showing the goodness of the currency and the absurdity of preferring coin; it was voted unanimously. As well, says White, might they have set out to prove that a quart of wine mixed with two quarts of water keeps all the exhilarating quality of the original.

Coin disappeared, and that had explanations too. Prudhomme’s newspaper announced in January 1791 that the price of coin “will keep rising until the people shall have hanged a broker.” Another theory held that the Bourbons were somehow drawing off the solid money to Germany. Another that British emissaries were at work instilling notions hostile to paper; great efforts were made to find them and more than one innocent person met the popular wrath. Talleyrand, shrewd as he was, thought the cause was simply that imports were too great and exports too little — which White answers by observing that you may as well explain why oil and water separate by saying that the oil rises to the top. At Quilleboeuf a citizen’s hoard of specie — coined gold and silver — was seized and sent to the Assembly as the fruit of unpatriotic wickedness. Marat proposed death as the proper penalty for hiding money.

Manufactures, and then wages

Mirabeau had promised that the second issue would serve manufacturers even if it hurt bankers. For a season it did: plenty of currency stimulated production, orders poured in from abroad because French goods could be paid for so cheaply, and from every quarter came satisfactory reports of activity. Then the markets glutted. One manufactory after another stopped; at Lodève five thousand workmen were discharged; the great works of Normandy closed and the rest followed. Heavy duties were laid on foreign goods and everything that tariffs and custom-houses could do was done, and every cause was assigned except the right one.

By late 1791 nobody knew whether a hundred livres of paper would buy ninety livres’ worth of goods a month later, or eighty, or sixty. That uncertainty did the deeper damage: it withered every far-reaching undertaking and reduced the business of France to living from hand to mouth. Capitalists could put surplus paper into land and wait. Men who needed their money from day to day could not. Every purchase became a speculation, and in a speculation the professional has an immense advantage over the ordinary buyer. Louis Blanc — “the most brilliant of apologists for French revolutionary statesmanship,” as White introduces him, so the witness cannot be called hostile — put it in four words: “Commerce was dead; betting took its place.”

Prices rose enormously; the day’s wage in the summer of 1792 stood at fifteen sous — one twentieth of a livre apiece, three quarters of a livre for the day — what it had been four years earlier, because manufactures had closed and the supply of labour had grown. Meanwhile merchants had to add to their ordinary profit a margin to cover the fluctuation itself, so prices ran ahead of the depreciation rather than following it. White reaches for Daniel Webster: of all the contrivances for cheating the labouring classes of mankind, none has been more effective than that which deludes them with paper money.

Thrift, then luxury, then corruption

Here the book turns from economics to morals, and it is the half that made it famous. The French are naturally thrifty, White says; but with such quantities of money and such uncertainty about its future value, the ordinary motives for saving diminished and a loose luxury spread. At the great city centres grew a speculative, stock-gambling body that absorbed the strength of the nation into itself; in the country at large grew a dislike of steady labour and a contempt for moderate gains and simple living. A pamphlet of May 1791 asked what could be said of the stock-jobbing, “as frightful as it is scandalous,” that went on under the very eyes of the legislators — and then proposed a change in matters of detail, which White compares to prescribing a pimple wash for a diseased liver.

The historian he quotes throughout, Heinrich von Sybel, supplies the line that lands hardest: “What a prospect for a country when its rural population was changed into a great band of gamblers!”

Then the officials. Mirabeau, who had risked imprisonment and death for constitutional government, was at this very time a regularly paid servant of the royal court — the evidence came out of the iron chest of the Tuileries when the monarchy fell. Jullien of Toulouse, Delaunay of Angers and Fabre d’Églantine conspired to raise and depress securities by legislative action; Delaunay, Jullien and Chabot took five hundred thousand livres for services to certain stock-jobbers. White notes, with what is unmistakably satisfaction, that nearly all concerned were guillotined for it. He is careful that the number of corrupt legislators was small, far smaller than alarmists claimed — and then makes the point that matters more: there were enough to produce widespread distrust and a want of faith in any patriotism or any virtue at all.

The debtor class

This is the mechanism White understands best, and a modern reader will recognise it at once. Buyers of Church land had paid small sums down with the remainder in deferred instalments, so a multitude of people now owed hundreds of millions — payable in the currency whose fall they could vote for. They were joined by everyone who had gone into debt expecting nominal values to rise. Before long the class ran through every rank of society, from the stock-gambler in the Assembly to the small land speculator in the country, and all of them pressed vigorously for new issues, and all of them could demonstrate to the people that new issues were the nation’s only chance of prosperity.

By December 1791 the arguments had inverted completely. Cambon asked whether an Assembly should give new power to a stock-jobbing fury by adding to the circulation. Dorisy answered that the government lands were worth thirty-five hundred millions: “Fear nothing; your currency reposes upon a sound mortgage,” and the official report records applause. Becquet observed that “the circulation is becoming more rare every day.” The issue passed on 17 December, coupled with a fresh ceiling — the third in fourteen months and the second in one, each higher than the last and each broken by the next vote. The authorisations table sets every issue beside the limit pledged with it. The note fell within days:

Linear scale — 100 is the note's face value

And out of the debates came what White calls a new system of political economy: that a depreciated currency is a blessing; that gold and silver are an unsatisfactory standard; that a currency which cannot leave the kingdom usefully separates France from other nations; that commerce with other nations may be a curse and a hindrance to it a blessing; that the laws of political economy, however operative elsewhere and in other times, do not apply to the free and enlightened inhabitants of France at the close of the eighteenth century.

Three expedients

By February 1793 the washerwomen of Paris could hardly buy soap and were demanding death for merchants who declined to sell for the currency. The market women called for a law to equalise the value of paper money and silver coin. On the 28th, at eight in the evening, a mob in disguise began plundering the shops; two hundred were stripped over six hours, and order was restored by voting seven million francs to buy the mob off. At the City Hall, Roux told the plundered merchants — to great applause — that shopkeepers were only giving back to the people what they had hitherto robbed them of.

What followed, White says, was a series of amazing expedients, and yet all perfectly logical.

The Forced Loan, 22 June 1793, voted by the National Convention — the assembly that had replaced the Legislative Assembly in September 1792, and would itself give way to the Directory in 1795. It was aimed at the rich and secured on the confiscated land of émigrés (nobles and officeholders who had left France), and it failed as such levies fail: so many of the rich had gone or hidden their money that the yield came to a fifth of the target, whereupon the threshold fell until it caught people of very modest means and the rate at the top reached half of a whole income. The margin has the figures. Little provision was made for repayment.

Repudiation of the first issue, 31 July 1793. The notes bearing the king’s portrait traded above the Republic’s later paper, because people reasoned that a returning Bourbon would honour his own face and repudiate everything else. The remedy was to repudiate them first — the whole of that first issue, which carried the guarantee of the nation as well as the king’s face. Cambon salvaged what White calls a clause claiming to protect the poor, exempting the smallest notes. Danton answered the objections with a sentence that has outlived him: “Imitate Nature, which watches over the preservation of the race but has no regard for individuals.” The sums, and what the Convention decreed two months later, are in the margin.

The Law of the Maximum, 29 September 1793 — and White is at pains to say that this legislation was high-handed but not careless. Committees of experts studied prices, and produced four rules that looked entirely reasonable:

Barère carried it. France had suffered from a monarchical commerce which only sought wealth; what she was now to receive was a republican commerce, of moderate profits and virtuous, which existed in no other nation. He poured contempt on political economy as “that science which quacks have corrupted, which pedants have obscured and which academicians have depreciated.”

The first result was that every means was taken to evade the fixed price and the farmers brought in as little as they could. Scarcity increased; the cities went onto tickets entitling the bearer to a fixed weight of bread or sugar or soap or wood. Goods of foreign origin had already been pushed by the war far above the 1790 price plus a third, so shopkeepers could not sell them without ruin; many left the trade, and the remainder charged what they liked under the entirely valid excuse that the seller risked his life by trading at all. That the excuse was valid is visible, White observes, in the daily lists of the condemned, where the names of men charged with violating the Maximum are not infrequent. A spy system paid informers a third of the value of goods discovered. The Criminal Tribunal at Strassburg was ordered to destroy the dwelling of anyone convicted of selling above the legal price. Farmers who held back crops they could not afford to sell at the legal price often had them taken by force, and were fortunate to be paid even in the depreciated money — fortunate, indeed, if they escaped with their lives.

The penalties, in order

The escalation deserves to be read as a sequence, because each step is the logical child of the one before:

On 13 November 1793 the Exchange was closed and all commerce in the precious metals suppressed. About a year later the Maximum itself was abolished.

White’s own summary of why the price laws followed logically from the currency is the most lucid theory he offers, and it does not depend on his moralising at all: a nation that entrusts to its legislators the issue of a currency not redeemable in a coin the commercial world recognises has entrusted to them the power to raise or depress the value of everything every citizen owns. Louis XIV had claimed that all property in France was his. That claim, White says, is exceeded by the confiscating power exercised where values are left to be depressed or raised at the whim of a body of legislators — and once that power is given, the power of fixing prices is inevitably included in it.

He then anticipates the obvious objection, that the war made all of this necessary, and rejects it in a paragraph: the fighting was soon successful and pushed onto foreign soil, contributions were levied on the subjugated countries, and the main cause of the evils was tampering with the circulating medium of an entire nation. Modern scholarship has spent more effort on that paragraph than on any other page of the book.