1911 Encyclopædia Britannica/Assignats
ASSIGNATS (from Lat. assignatus, assigned), a form of paper-money issued in France from 1789 to 1796. Assignats were so termed, as representing land assigned to the holders.
The financial strait of the French government in 1789 was extreme. Coin was scarce, loans were not taken up, taxes had ceased to be productive, and the country was threatened with imminent bankruptcy. In this emergency assignats were issued to provide a substitute for a metallic currency. They were originally of the nature of mortgage bonds on the national lands. These lands consisted of the church property confiscated, on the motion of Mirabeau, by the Constituent Assembly on the 2nd of November 1789, and the crown lands, which had been taken over by the nation on the 7th of October (see French Revolution).
The assignats were first to be paid to the creditors of the state. With these the creditors could purchase national land, the assignats having, for this purpose, the preference over other forms of money. If the creditor did not care to purchase land, it was supposed that he could obtain the face-value for them from those who desired land. Those assignats which were returned to the state as purchase-money were to be cancelled, and the whole issue, it was argued, would consequently disappear as the national lands were distributed.
A first issue was made of 400,000,000 francs’ worth of assignats, each note being of 100 francs’ value and bearing interest daily at a rate of 5%. They were to be redeemed by the product of the sales, and from certain other sources, at the rate of 120,000,000 francs in 1791, 100,000,000 francs in 1792, 80,000,000 francs in 1793 and 1794, and the surplus in 1795. The success of the issue was undoubted, and, possibly, if the assignats had been restricted, as Mirabeau at first desired, to the extent of one-half the value of the lands sold, they would not have shared the usual fate of inconvertible paper money. Mirabeau was a strenuous advocate of the assignats. “They represent,” he said, “real property, the most secure of all possessions, the soil on which we tread.” “There cannot be a greater error than the fear so generally prevalent as to the over-issue of assignats ... reabsorbed progressively in the purchase of the national domains, this paper-money can never become redundant.”
In 1790 the interest was reduced to 3%, and as the treasury had again become exhausted, a further issue was decided upon; it was also decreed that the assignats were to be accepted as legal tender, all public departments being instructed to receive them as the equivalent of metallic money. This second issue amounted to 800,000,000 francs and carried no interest. It was solemnly declared in the decree authorizing the issue that the maximum issue was never to exceed twelve hundred millions. This pledge, however, was soon broken, and further issues brought the total up to 3,750,000,000 francs. The consequence of these further issues was instant depreciation, and the note of 100 francs nominal value sank to less than 20 francs coin. Recourse was then had to protective legislation. The first step was to decree the penalty of six years’ imprisonment against any person who should sell specie for a more considerable quantity of assignats, or who should stipulate a different price for commodities according as the payment was to be made in specie or in assignats. For the second offence the penalty was to be twenty years’ imprisonment (August 1, 1793), for which the death penalty was ultimately substituted (May 10, 1794). This severe provision was, however, repealed after the fall of Robespierre. Notwithstanding these precautions, the value of assignats still declined, till the proportion to specie had become that of six to one. Then came the passing by the Convention on the 3rd of May 1793 of the absurd “maximum.” The decree required all farmers and corn-dealers to declare the quantity of corn in their possession and to sell it only in recognized markets. No person was to be allowed to lay in more than one month’s supply. A maximum price was fixed, above which no one was to buy or sell under severe penalties. These measures were soon stultified by further issues, and by June 1794 the total number of assignats aggregated nearly 8,000,000,000, of which only 2,464,000,000 had returned to the treasury and been destroyed. The extension of the “maximum” to all commodities only increased the confusion. Trade was paralysed and all manufacturing establishments were closed down. Attempts by the Convention to increase the value of the assignats were of no avail. Too many causes operated in favour of their depreciation: the enormous issue, the uncertainty as to their value if the Revolution should fail, the relation they bore to both specie and commodities, which retained their value and refused to be exchanged for a money of constantly diminishing purchasing power. Even between the assignats themselves there were differences. The royal assignats, which had been issued under Louis XVI., had depreciated less than the republican ones. They were worth from 8 to 15% more, a fact due to the hope that in case of a counter-revolution they would be less likely to be discredited.
The Directory was guilty of even greater abuses in dealing with the assignats. By 1796 the issues had reached the enormous figure of 45,500,000,000 francs, and even this gigantic total was swollen still more by the numerous counterfeits introduced into France from the neighbouring countries. The assignats had now become totally valueless—the abolition of the “maximum” the previous year (1795) had produced no effect, and, though, by various payments into the treasury, the total number had been reduced to about 24,000,000,000 francs, their face-value was about 30 to 1 of coin. At this value they were converted into 800,000,000 francs of land-warrants, or mandats territoriaux, which were to constitute a mortgage on all the lands of the republic. These mandats were no more successful than the assignats, and even on the day of their issue were at a discount of 82%. They had an existence of six months, and were finally received back by the state at about the seventieth part of their face-value in coin.