Assignats

France

Assignats were paper money (fiat currency) authorized by the Constituent Assembly in France from 1789 to 1796, during the French Revolution, to address imminent bankruptcy. They were originally backed by the value of properties now held by the nation; those of the crown taken over on 7 October, and those of the Catholic Church, which were confiscated, on the motion of Mirabeau, by the Assembly on 2 November 1789. Credit was wrecked, according to Talleyrand; for Mirabeau "the deficit was the treasure of the nation". In September the treasury was empty. Charles Maurice de Talleyrand-Périgord proposed "national goods" should be given back to the nation. Necker proposed to borrow from the Caisse d'Escompte, but his intention to change the private bank into a national bank similar to the Bank of England failed. A general default seemed certain. On 21 December 1789 a first decree was voted through, ordering the issue (in April 1790) of 400,000 livres' worth of assignats, certificates of indebtedness, with an interest rate of 5%, secured and repayable based on the auctioning of the "Biens nationaux". The assignats were immediately a source of political controversy. Constitutional monarchists such as Jean-Sifrein Maury, Jacques Antoine Marie de Cazalès, Nicolas Bergasse and Jean-Jacques Duval d'Eprémesnil opposed it. While their proponents, like other eighteenth-century advocates of "land banks," argued that land was a more stable source of value than was gold or silver, the assignats' opponents saw them as based on an illegitimate seizure of property.