Transcript: The French Revolution's disastrous money experiment -- Part 2

This is an audio transcript of The Story of Money podcast episode: 'The French Revolution's disastrous money experiment -- Part 2'

Robin Wigglesworth

Today on The Story of Money, how the French Revolution's fight for liberty also was a fight over money. So the Reign of Terror is now kicking off.

Rebecca Spang

They do not want to keep producing chaos. They want the chaos to end. But since they have chaos, they say, Oh, well, how about if we try this?

Robin Wigglesworth

So they just start printing tons and tons of assignats.

Rebecca Spang

The assignat very, very quickly loses value.

Robin Wigglesworth

Napoleon becomes France's leader, and I'm curious whether you think the roots of his power, whether that essentially grew out of all this economic chaos?

[MUSIC PLAYING]

In today's episode, we're going to be talking about the French Revolution. If you wanna hear all about the lead-up to the infamous moment of the storming of the Bastille, you can find out about it on our last episode. But today, we're going to get stuck into the time of the executions of Louis XVI and Marie Antoinette, when the Reign of Terror paralysed France.

And already creaking under economic instability, despite the introduction of a whole new currency, there's a huge amount of political and social unrest. Did all this economic chaos lead to the rise of Napoleon and his empire? We'll be finding out.

This is The Story of Money. Gillian's away this week, and I'm Robin Wigglesworth.

And to tell this story, we have Rebecca Spang back once again. Rebecca is a professor of history at Indiana University. She's also the author of the wonderful Stuff and Money in the Time of the French Revolution, which this time I have now brought down from my bookshelf upstairs. Rebecca, welcome back to The Story of Money. It's so great to have you here with us again.

Rebecca Spang

Well, thank you. I wasn't gonna leave you hanging in 1790.

Robin Wigglesworth

No, that'd be terrible. It was such a cliffhanger moment to end on, so I'm glad that we can tackle, frankly, you know, the Reign of Terror. We can't really do the French Revolution without tackling the Reign of Terror.

So Rebecca, we ended last week's episode in the summer of 1790. It was a hot and sticky summer in Paris. There's so much going on. There's a National Assembly meeting to figure out what to do with the country, and nobody really knows. King Louis XVI, our rather overweight monarch, is still the head of state, at least in theory, but his power is damaged, and France is on its way to establishing a constitutional monarchy.

The government has started issuing assignats, a nifty financial innovation that began as an interest-bearing short-term debt instrument but is fast being used as paper money. But France is broke. So the big question is: how can the country pay off its debts?

Rebecca Spang

In the summer of 1789, they vow to abolish privilege, and they pass something called the Declaration of the Rights of Man and the Citizen. And the knock-on effect is suddenly they realise they have to redo the entire country. They have to create administrative districts. They have to figure out what the administration's gonna look like. They have to figure out how, sort of social services are gonna run. They have to figure out how the judiciary is gonna work. They have to figure out everything, and they have to figure out the money and the debt.

Robin Wigglesworth

But I'm curious, I mean, these are big, important questions that frankly many countries have wrestled with. How do they figure out what to do with these assignats that we talked about last week? This kind of, this proto-currency or slash short-term debt that they issued backed by nationalised church property that they seized and used as securities collateral for these assignats. What do they decide to do about this?

Rebecca Spang

So there's an extremely heated, extremely long debate in 1790. They finally vote on it, and you can tell what a hot-button issue this was is because it's one of the three votes in the National Assembly where they actually take a roll-call vote. And that may seem like, Oh sure, that's fine, but remember, you know, this is 1,200 people, and there are no computers. You've got to call out the names one by one, 1,200 of them, and say, how do you vote on this? And then there's actually a printed record of who votes for issuing more assignat to pay off the short-term debt and who votes against it. So there's gonna be a permanent record of where you were on this issue, which gives you some indication of just what a major source of contention it was.

And by a quite small margin, the votes that say, let's issue more assignats, carry the day.

Robin Wigglesworth

Yeah, because some people said that the assignats were illegal. This was based on seized property. And some people said, well, this is just the way it has to be. And in fact, given that there's this acute shortage of something that kind of walks, talks and quacks like money in the French economy and it's struggling because of this, this is essential. So they issued, what was it? 800mn livres of assignats?

Rebecca Spang

Yes. So livre in the old regime is the unit of currency. I mean, I know that if you've studied any French at all, you know le livre is a book, but la livre is the pound, and that's the unit of currency. And that really ought to have taken care of the debt problem. That, on paper, solves things. In terms of the actual day-to-day functioning of the economy, it perhaps causes more problems.

Robin Wigglesworth

So these assignats did not pay interest. They did not pay interest like the original ones.

Rebecca Spang

That's right. So these new ones do not pay interest. They're really meant to circulate like money, but the smallest one is still going to be for 50 livres, which is much smaller than the original. But it's still, it'll buy you 20 nice dinners in a French restaurant -- in a Paris restaurant -- and nobody needs 20 nice dinners, right?

So there's a real problem that the first assignat, even, you know, through 1790, they're in denominations that are too large for retail use. And because they're very worried about the threat of counterfeiting, the first assignats have very high production values.

They're slow to manufacture. Each one is numbered and signed by hand. And the engraver is making minute little differences in his engravings 'cause he thinks that's a good way to track potential counterfeiters. So they're slow to make, they're slow to get into circulation and then when they're in circulation, they cause a bottleneck because they use up all the change.

Robin Wigglesworth

We actually have a picture of them here. I mean, it kinda looks like, I mean, I'd guess paper money. It has a picture of some dude. It's usually some guy in the middle of it.

Rebecca Spang

That dude is Louis XVI.

Robin Wigglesworth

Louis XVI. So he still has his face on there. OK. That's interesting.

Rebecca Spang

Yeah, it has his face on it. So what it is actually is, it looks like a 17th or 18th-century bill of exchange, and it has a representation of a coin. So again, it's meant to be this sort of hybrid paper which circulated between individuals, coin, which circulated notionally, universally. It's meant to do both.

Robin Wigglesworth

OK. Yeah, and I see on this picture of Louis XVI, our chubby anti-hero, he still has his head attached to his shoulders still. So it's interesting that even at this time of revolution, we kind of know where it's going.

Rebecca Spang

Well, remember, nobody knew where it was going.

Robin Wigglesworth

No, that's true. We know, but they didn't know.

Rebecca Spang

That is the hardest thing to teach people when you're a historian. People in the past don't know what happens next, much as we don't know right now what's gonna happen next year. And nobody, nobody in the summer of 1789 or the summer of 1790 thought that France was going to become a republic.

France was too big. It had too long a history as a monarchy. No, they're not gonna have a republic. They're gonna have a king. It's gonna be a constitutional monarchy like they have in Britain. And that's what people expect is going to happen. But you know, history is a long story of people's expectations not really getting met.

Robin Wigglesworth

Well, so we have these assignats now. They still boast the face of the king. They are too high denominations really to work as everyday currency.

Rebecca Spang

What ends up happening is that literally thousands of bodies all across the country, probably starting with merchants in Bordeaux, which is, you know, a trading hub, it's a port city, they start issuing their own small change. And they say, you know, this isn't gonna be inflationary. And what is this backed by? It's backed by an assignat. So I have this assignat for 1,000 livres, and I'm gonna take it, and I'm gonna lock it up in my desk. And my desk has three locks on it, and three different people have the keys, and so it's really secure. So there's what's gonna back it, and then I'm gonna make 1,000 pieces of paper, each good for one livre.

Well, that's OK. I haven't created any additional value. It's all backed by the 1,000 that I have secured in my desk. And so you know where these ones are coming from, I will sign it, and then I'll have some other people sign it too, and then we can use this as small change. So one merchant in Bordeaux does this, and then another merchant, and then merchants in Lyon, and then municipalities. So like an entire town will say, Oh, OK, great. We'll lock up 2,000. We'll make 2,000 pieces of small change, and now we can buy office supplies. Now we can pay the clerks. And so by early mid-1791, there are probably 3,000 different issuers. And they all look different, and they all have different signatures on them.

Robin Wigglesworth

Yeah. I mean, Rebecca, I'm starting to suspect this is one of those great ideas on paper, but in practice it starts breaking down quite dramatically, right?

Rebecca Spang

Right. So it works fine locally but if you travel at all, then you've got a piece of paper signed by somebody maybe you don't know, and you're trying to pass it to somebody else. None of it is forced circulation. It's all voluntary. So you go to the market and the merchant can say, no, I've never seen one of those before. I'm not gonna take that. Oh, I recognise that one. I'll take it at half the face value. And none of this, not even the assignat, has to be accepted at face value, so it's already trading at a discount with coin.

There were so-called patriotic butchers who said, I'm going to take the assignat at face value because I believe in the nation, I believe in France, I believe in the revolution. And then their neighbour might say, yeah, well, but I actually can't buy cows and pigs with this stuff, so I'm only gonna take it at 20 per cent off.

Robin Wigglesworth

Well, it sounds like it's quite a complicated mess. We wanna get into some of the mess that this causes, but I'm curious, what's going on with Louis XVI, our slightly chubby royal friend, the King of France whose face is on these assignats? What happened to him after the storming of the Bastille?

Rebecca Spang

Right. So after the storming of the Bastille and after the Women's March, which is when a large number of market women from Paris and others, I mean, they're joined by the National Guard, by Lafayette, march from Paris to Versailles, it's a long walk, and demand that the royal family move to Paris because they feel that because the royal family is still out at Versailles, they don't really understand the plight of the common people.

The royal family moves back to Paris, and Louis again continues to vacillate. Does he like this? Does he wanna be popular? Maybe he doesn't like it. But right from the beginning, Marie Antoinette and her Austrian relatives hate the revolution, and they are really, really worried that this could spill over and, like, happen in Austria or the Austrian Netherlands in, as well.

In this context, Marie Antoinette and her relatives plot for the entire royal family to run away. They're gonna get out of France and get to the security of something Austrian. That's called the Flight to Varennes. It happens in June 1791. So imagine the situation for the National Assembly. They've been writing a constitution for a constitutional monarchy, and then the monarch tries to run away.

Robin Wigglesworth

Oh, that sounds quite messy.

Rebecca Spang

The members of the National Assembly who have spent so long writing a constitution for a constitutional monarchy, they're not gonna say, oh, well, forget that. They say, oh, unfortunately, the king has been king-napped, but we've managed to get him back, and he really loves the Constitution. See, he just said he loves the Constitution. OK, he loves the Constitution. Great. We have a constitutional monarchy. Goodbye. And they actually vote themselves out of existence, and then there's a new body created, the Legislative Assembly, which doesn't have any of the same members as the National Assembly.

And that's 1792, and then France declares war on Austria. Why does France declare war on Austria? For fomenting counter-revolution, for harbouring the émigrés. So remember, the king's brothers have fled the country, and they're building up armies. And so they're being harboured somewhere, and that doesn't look so good from within France. And then somewhere, I think it's item 25 or something on the causes of war is, and the Austrians and the British are trying to discredit the assignat.

Robin Wigglesworth

Oh, wow. OK. That's interesting.

Rebecca Spang

That they don't even like our land in a form that could circulate.

Robin Wigglesworth

Well, I can understand why they frown on this sort of incipient monetary disaster. But so essentially, so Louis is now being kingnapped, and by the way, that's an amazing term. I'm definitely gonna be using that more, even though it doesn't happen a lot in history, unfortunately. But he's been kingnapped back to France, Louis and his family. But they are increasingly now seen as traitors because they're kind of allied to the Austrians and the Germans who want to restore the absolute monarchy and this new legislative assembly, they decide to abolish the monarchy then, right, and declare a republic?

Rebecca Spang

Yes. There's a moment of crisis in which a commander of one of the German armies says that he's going to march on France, and if there's any damage, any harm done to the royal family at all, anybody who doesn't welcome the invading army, there will be exemplary violence. So he's basically saying, you know, we're gonna burn Paris to the ground. And the Parisians and others are like, look, it has obviously come to the point where it's us against the monarch who's allied with these foreigners. We're getting rid of the monarchy. We're declaring a republic.

Robin Wigglesworth

So Rebecca, what happened to Louis the XVI? I guess the new government doesn't really know what to do with him immediately, right?

Rebecca Spang

Because once you declare a republic, you don't have a use for a king. And, you know, many people believe that he's been conspiring with France's foreign enemies. So the convention -- this new body that has to write a constitution for a republic -- has a debate that goes on for about a month about how do we decide what to do with this guy who used to be king?

And some people argue that because he used to be king, he obviously has committed crimes against a republic because a republic has no kings, as the saying goes. And others argue, well, no, we need to actually get this clearer. So they eventually decide, all right, we need to have a trial, and then the trial goes on for weeks. They convict him of crimes against France, and then they have another debate, well, what should the punishment be for crimes against France? And the eventual conclusion is to execute him, because if you let him live, he will be a figurehead. People will gather around him.

Robin Wigglesworth

No, I mean, understandably so. It's almost his realpolitik, I guess, at that stage. Can you tell us a little bit what the scene must have been like when Louis XVI loses his head when he's marched to the guillotine in Paris?

Rebecca Spang

Right. So I mean, remember there is, of course, a precedent for this, which is the execution of Charles I. Images from that moment do circulate in 1793. But so the guillotine in Paris is set up at the Place de la Concorde. So right there, sort of beside the Louvre, facing toward the Champs-Élysées. It's a big open space. There's a space for a crowd of thousands, maybe tens of thousands. The guillotine has been introduced by Dr Guillotin as a humanitarian measure, because the way that ordinary people were executed in the old regime was by hanging, which takes hours and is cruel, and, again, it was a big spectacle, whereas members of the nobility could have their heads cut off by an executioner.

But, you know, you don't necessarily have enough executioners, and some of them aren't very good at their jobs. But if you then mechanise it, you can make sure that it's much more efficient and that the machine works every time.

So Louis is led to the guillotine. The blade is dropped. The executioner holds up his head to show to the crowd to say, see, this is really the end of him. And the body is thrown on a pile with the other bodies.

Robin Wigglesworth

Wow, I have to admit, I didn't know that the guillotine was kind of almost a socially responsible way of execution in the time of the French Revolution. But his body was just thrown in among all the piles of what everybody else that was being executed then.

Rebecca Spang

Yeah, because you don't want to make a site for martyrdom.

Robin Wigglesworth

Rebecca, what happens with Marie Antoinette, his Austrian controversial wife?

Rebecca Spang

She's left in prison for a while, and then they realise she's in prison, and they haul her out an, denounce her, bring a whole series of charges against her, including actually that she had seduced her son, which seems improbable. But they're just piling on all the accusations they can think of. And in October of 1793, she too goes to the guillotine. Their children do or do not survive. There's some mystery around that. And of course, his brothers are outside of the country, busy organising armies.

Robin Wigglesworth

So Rebecca, one of the most memorable moments in the French Revolution, really in world history, has just taken place. Louis XVI, he was beheaded on January 21 1793, in the Place de la Concorde in the centre of Paris. What happens to the French government next? And importantly to our story, what happens to the assignats? That's really what I want to dig into now.

Rebecca Spang

So situation in France at this point is that there's a new body of 700 elected representatives, including a number of people who had served in the National Assembly. This is called the National Convention, and it has two jobs. One is to write a constitution for a republic, and the other is to manage everything. All right, so it's gotta fight the war, it's gotta fight the civil war. It has to try to develop a colonial policy. It's doing all of those things simultaneously. And it has to deal with the repercussions from the failure of one of the biggest issuers of the private small change.

So in the wake of that disaster, the convention says, you know what? Hold on. Wait a minute. We're the government, we make the money. All of this locally issued small change, it's gotta go out of circulation. All right?

Robin Wigglesworth

These are the billets de confiance. The individual merchants have been issuing...

Rebecca Spang

Individual merchants, municipalities, little political clubs. The convention says, no, none of that can circulate after, I think it's January '93. You know, if you're gonna try to circulate it, you've gotta pay a tax on it. They really are gonna try to rein in this proliferation of privately issued small change. They do that in part by changing how they manufacture the assignat.

So they really do develop a mass-production system so that they can make more small-denomination bills and get them out there quickly as possible. So they're no longer gonna each be individually signed, for instance, which was somewhat slow. So they try to centralise that. But they're not really in a very good position because their predecessors had said, yeah, it's a free country. You can do whatever you want. So to say, no, actually, you can't do whatever you want, doesn't look like you're so supportive of freedom.

Robin Wigglesworth

No. Well, it's quite a problem, given everything going on and the rhetoric at the time. But I understand why the National Convention is trying to bring some order back to the currency and back to the economy, but does it work, though, at this time of immense tumult?

Rebecca Spang

It's a time of immense tumult. And so one thing they try to do is they say, the earliest assignat that were issued, the ones that have the picture of the former king, they're not gonna be valid after a certain date.

Robin Wigglesworth

Understandably so.

Rebecca Spang

Right, which would seem to make sense, except once you put into circulation the possibility that some of the assignat are not valid after a certain date, people start to be suspicious. Well, what about this one? So that makes people nervous. Then there is a period which is often called the Reign of Terror from '93 to '94, where the Convention imposes wage and price controls and mandatory acceptance of the assignat at face value.

Robin Wigglesworth

Well, this Reign of Terror is obviously such a crucial phase, but can you tell us what it meant in practice? Because I imagine that a Reign of Terror involves more than wage and price controls.

Rebecca Spang

The important thing to know is that a crowd in Paris marches on the National Convention and says, we want you to declare terror the order of the day. Now, like, hold on. Wait a minute. What do they mean? Well, remember Louis XIV, who built Versailles, he was the terror of his enemies, all right?

So the idea is what they want is sort of a policy of no compromise, take no prisoners. We want to win. We're sick and tired of this chaos, of this nonsense. Let's be clear about what we're doing. The National Convention actually never does say, we're gonna make terror the order of the day. But in retrospect, this gets called the Reign of Terror, and they do jail an enormous number of people as suspected enemies of the revolution.

Robin Wigglesworth

So the Reign of Terror is now kicking off. It's a bloody moment in French history, especially if you add in all the other death and destruction and chaos that's happening around France at the time. But what happens to France's financial picture? The stuff that I care about. Well, we're gonna be covering that after the break.

[MUSIC PLAYING]

And we are back and we are deep into this era that is known as the Reign of Terror. Now let's talk about one of the figures who's most tied up in that era, and that is Maximilien Robespierre. Can you tell us a bit more about Maximilien Robespierre? What was his background? What was his role during this time?

Rebecca Spang

Right. OK, so Robespierre becomes the sort of figurehead for terror. And the thing to know about Robespierre is he's young, as are most of the leading revolutionaries. He's a lawyer from the north of France, from Arras. He's a member of the National Assembly, and unlike many other politicians of this era, he's a man of absolutely unswerving convictions.

He was known as the incorruptible. He couldn't be bought. He didn't seem to drink very much. He wasn't a womaniser. But he had principles. So he actually was one of the people who spoke at greatest length against the death penalty. So his reputation is as somebody very bloody, somebody who's always sending people to the guillotine, but really those were not his principles.

That's sort of the position he finds himself in trying to defend the republic. All right? And I mean, I guess it's a question today: what do you have to do to defend a republic, to defend a democracy, if the winds are going in a kind of anti-democratic, anti-republic direction?

Robin Wigglesworth

We actually have a portrait of him here. I mean, he is in many ways the antithesis of Louis XVI. He looks severe. He looks gaunt. He looks quite like a serious guy who probably is not a ton of fun at a party, I have to admit, Rebecca.

Rebecca Spang

Notice that he's wearing a powdered wig, as he did throughout his life. For all that he's considered a radical, he did not embrace the sort of new vogue for natural hair or casual clothing that a few of his colleagues did.

Robin Wigglesworth

Well, he sounds like a complicated character, but I have to admit, like if a teetotal lawyer, that definitely doesn't sound like somebody I'd trust. [Rebecca laughs] But lawyers, you know, they're always lurking behind every bad event in history.

But during this Reign of Terror, and you talk about how they, you know, forcing people to accept the assignats, these new assignats at their face value was a part of it. How is the government thinking about money, and does that change at all?

Rebecca Spang

Well, I mean, they try to consolidate the debt. So at this point they still had on their books some debt that, you know, paid 7 per cent and some paid 2.5 per cent and some was due now and some was due whenever, and they try to consolidate that and make something like the British consolidated debt, which is a sort of model that they're following.

So they're trying again to rationalise and modernise various aspects of the debt. Robespierre doesn't really have a hand in that. He's not a money guy. He really isn't. But the point at which other people in the convention start to think Robespierre has really gone round the bend, and he's gonna come for us next, we'd better do something about it, is when he denounces Joseph Cambon, who was the sort of leading speaker on monetary issues in the convention. And at that point, people were like, oh, we just don't know where Robespierre is going next. We've got to get him out of here.

Robin Wigglesworth

Well, it seems like, I mean, almost understandably, at such a time of upheaval, that France is flaming from one potential solution to the next. At first, they have the assignats as sort of a quasi-bond that pays the interest backed by land seized from the church.

Then they have assignat monet, and they kind of iterates and they iterates and keep trying to find something that kind of sticks. Does the Reign of Terror approach to money and debt stick, essentially? Have they managed to turn this into a consolidated bonds?

Rebecca Spang

Right. So I think that's a very good way to think about it, right? That what they want to do, they do not want to keep producing chaos. They want the chaos to end, but since they have chaos, they say, oh, well, how about if we try this? But you know, if you keep changing what you're trying, the effect is that people feel like they're living through chaos. Yeah. Even if what you're really trying to do is stop the chaos.

And that, I think, is a very good way to understand the sort of chops and changes of monetary policy in France through this period. So the brief period when the convention tries to force the circulation of the assignat, and I mean, of course, that is what governments do today. So it's not a crazy radical thing to do.

Robin Wigglesworth

And it sounds when it's backed by something called the Reign of Terror. I take it quite seriously as well. Wouldn't you? I mean, you'd think it sticks.

Rebecca Spang

Right, you would think it sticks, but then, there's another turn in the revolution, the event called the 9th of Thermidor, where Robespierre and his closest allies in the Committee of Public Safety are themselves denounced as enemies of the republic and sent to the guillotine.

Robin Wigglesworth

Well, I guess it's all revolutionaries end up eating their own eventually. But is this another turn then for money at the time of the French Revolution? What happens then?

Rebecca Spang

Yes, because what's gonna happen is that in the aftermath of that, the members who are left in the National Convention, generally men who do not have any principles at all, and who drink quite heavily and are womanisers, not all of them, but many, they say, oh, don't worry. The terror's over. That was all Robespierre's fault. And to prove that we're not terrorists. We are going to stop enforcing wage and price controls. We are going to stop mandating the circulation of the assignat at face value. This is what liberty is. You can use whatever money you want.

Robin Wigglesworth

But that does not, I'm guessing, again, this does not end up well for France either, right?

Rebecca Spang

No, because after that brief period where it seemed like the assignat was sort of stabilising in value, is you've got another government that comes along and says, nah, whatever, do whatever you want, the assignat very, very quickly loses value. Where people who have something hard to sell, and often of course that's farmers, say, no, I know that bill says 1,000, but I'm only taking it for 100. And in that situation, the only way to have enough money to pay for, say, what the army needs, is to print more of it.

Robin Wigglesworth

OK, so they do start printing tons and tons of assignats. It is completely unanchored from that initial idea that it was backed by church land and assets.

Rebecca Spang

It's not completely unanchored, 'cause they still don't really know how much church land there is, and they've also confiscated property from families that have fled the country. But it's not very tightly anchored at all, and yes, they're just at this point in late '94, '95, they've just got the printed presses going 24 hours a day.

Robin Wigglesworth

So they're not hand-signing every single assignat anymore.

Rebecca Spang

No. That's long gone.

Robin Wigglesworth

Yeah, so what's the scale of the inflation we're talking about now? Like, how much, how many livres were in circulation, the French currency was in circulation?

Rebecca Spang

Right, right. So they've gone from about 8bn to 20, right? So 2.5 times in circulation over the course of less than a year. And in terms of how much depreciation there is, again, this is gonna vary depending on how much local chaos there is. But it can be that the assignat are accepted for only 5 per cent of their face value.

Robin Wigglesworth

So yeah, not quite kind of Weimar Germany levels of hyperinflation, but pretty extreme.

Rebecca Spang

But like any episode of hyperinflation, there are winners and losers.

Robin Wigglesworth

Who are the winners and who are the losers?

Rebecca Spang

The losers are people who are owed money who get paid back in assignat. And the winners are those who owe the money, who are like oh, there's all these assignat in circulation, and I owe you 10,000. Great. Here are 10,000 in assignat. And the creditors say, no, no, no. I, didn't want that 10,000. I wanted 10,000 of something else.

Robin Wigglesworth

But the assignat has flailed around in so many forms for so long now. Is this the final death spiral, essentially, for it?

Rebecca Spang

Well, what the then governing body eventually decides is, yes, the problem is that it's become untethered from the land. We're going to have a different paper called the territorial mandates, and they'll be much closer tied to the land, they're called territorial.

And so to show that we're not doing assignat anymore, we're actually going to have a public destruction of all of the equipment, all of the typeface, all the plates. We'll have a big bonfire. You can see there's no danger of any more assignat ever being printed.

Robin Wigglesworth

So they have a literal, like, bonfire of not just the notes themselves but, like, all the equipment used to make those notes.

Rebecca Spang

Yes. Which, again, they could conceivably have used for something else. But yeah, it's the, how should we say, the optics of it that are important.

Robin Wigglesworth

That sounds like incredible spectacle. So this was 1796, the big bonfire of the assignats, essentially.

Rebecca Spang

And then the territorial mandates go into circulation, and they depreciate even faster than the assignat did because everybody could sort of see where this is going. And we end up in a situation where wealthy people start writing contracts that say, like say for rent or to get a loan reimbursed, they say, and must be paid in gold or silver of a certain fineness regardless of any laws that are currently on the books or may be passed in the future. So they try to write contracts that are basically get-out clauses for whatever monetary policy the government may ever have.

Robin Wigglesworth

So this is by 1796. We've had so many different variants of assignats and money and currency. The country's in just in complete chaos and civil war and external war. The money that they've tried to issue at various points is just completely worthless. I mean, what is life like for ordinary people in France?

I mean, it must have been incredibly traumatic really on so many levels.

Rebecca Spang

It was. It was really traumatising. And people felt that if they had paper, they ought to buy something with it because they knew the paper wasn't going to be good. Obviously, for people on fixed incomes, for rentiers, as one would say in the 18th century, their situation is very precarious.

The army is living off the land the way 18th-century armies tend to do, so actually the army is in a better position, because they're just ransacking and pillaging. Military suppliers become the new wealthy of this period, and yeah, everybody else, it's awful. And it's really terrible to think about because there was so much enthusiasm and excitement in 1790.

Robin Wigglesworth

Well, obviously a decade later or a decade plus in 1804, Napoleon becomes France's leader. And I'm curious whether you think the roots of his power, the reason why he was suddenly, France was able to go from a fairly sort of idealistic revolution via a constitutional monarchy to a republic to suddenly being a dictatorship. Whether that essentially grew out of all this economic chaos caused or stirred up by the assignats.

Rebecca Spang

So in 1797, 1798, the domestic picture is bleak, the domestic picture is chaotic. They're trying to get a hold of it, but it's just not working very well. Meanwhile, everybody's getting reports from his embedded journalists that there's this young general travelling with an army through Italy, winning victory after victory, setting up all of these sister republics all through the peninsula.

And then rumour has it he's gone and done amazing things in Egypt. And so yeah, this guy Napoleon Bonaparte, he really seems to know what he's doing. And his troops love him because he's quite a master at motivating people. And he actually gets invited to come back in 1799 and stage a little coup. And then in 1804, he crowns himself emperor.

Robin Wigglesworth

Wow. OK. So those wars that they kind of stumbled into France as an almost by accident or a distraction or was forced upon them, that ends up elevating Napoleon Bonaparte into, from a military officer to a general, to a plausible new leader of government, to a brand new emperor in just a few years.

That must make sense that after that kind of chaos and the trauma that we talked about, that you would want, you almost deeply need somebody like Napoleon to come forth and restore order.

Rebecca Spang

Some people felt that way. Other people recognised that you know, this is just a new sort of police dictatorship. And, you know, how is this not a Reign of Terror? How is this not the worst sort of absolutism? Plus, you know, who is this guy? It's not like he's a member of a royal family. He's just an upstart from Corsica. So, you know, again, there, there was some division around this. But he was very good at persuading people that he knew what he was doing. He did have an eye for detail and he also had very strong feelings against paper money, and insisted that France be put on a bimetallic standard.

Robin Wigglesworth

Well, to return to that, that paper money era, I mean, after everything we've discussed now in last week's episode and this one, I'm curious what you think the story of the assignat and its sort of many iterations really tells us about what money is and what role it played in the French Revolution.

Rebecca Spang

So I think the big takeaway picture is that money works best if you don't have to think about it very hard. And once you start thinking, hold on, wait a minute, what are all these numbers? You can kind of freak yourself out a little bit. But in sort of a position, in a situation of political, social, cultural stability, you don't have to think about it. You just take it for granted. But when you do have to start thinking about it, then you realise that you're really depending on other people, and if other people don't want to accept your money, it doesn't matter what backs it.

Robin Wigglesworth

The assignat, I'm curious, is often seen as a core cause of this rampant money printing in both how the French Revolution got unmoored from its idealistic roots and why it degenerated into Reign of Terror and eventually produced, for all his, you know, clear skills and genius, an absolute dictator. Do you think it was a worthy attempt fundamentally to develop the assignat? Was the idea at its core or at its inception a good one?

Rebecca Spang

At its inception, it was not an especially radical idea. The idea that land is the source of value, that certainly made sense in an overwhelmingly agricultural economy like France. There have been many attempts in the 18th century, the 19th century into the early 20th century to create banks or monetary instruments that are backed by land, backed by property.

I mean, you could say in a way that's sort of what any mortgage is. The real problem was that in seizing property formerly held by the Catholic Church, it creates this huge divide within French culture in much the same way that Henry VIII, seizing the English monasteries.

So we just need to keep that context in mind and understand that it's not simply because the assignat were paper, even though they were coincidentally printed on it, but the specific political context in which this action is taken that leads to their discrediting.

Robin Wigglesworth

It's the trust part that's absolutely essential, whether it's on paper, gold, plastic, whatever. It's the trust that is the glue that keeps currency together, and if that trust is somehow undermined for whatever reason, that's really what causes potentially economic carnage.

Rebecca Spang

Exactly, right? Because then everybody in every transaction is asking questions about, is this good, and just everything grinds to a halt?

Robin Wigglesworth

But to what extent do you think the assignats reflect, at various stages, the iterations of the French Revolution and the political chaos that deepens and deepens? And to what extent did it exacerbate or accelerate or worsen that political instability?

Rebecca Spang

I think there are a couple ways to think about that. One is you can just look at the physical assignat and see how they change form from depicting a king to depicting, sort of republican iconography to really not having very many pictures at all. We've just gotta print as many of these as we can as quickly as we can. So that's a reflection. But I think it's more interesting or more important to think about the way that money operates as a sort of hinge between economic and political life.

And this was a place where, again, the sort of political rhetoric of freedom and liberty of the First National Assembly, when that rhetoric got applied to money and said, oh, sure, you're free to create your own small change. Thank you very much for doing that.

Robin Wigglesworth

Yeah.

Rebecca Spang

You know, it's in the name of political ideals, but it creates economic chaos. And then you've got economic chaos that makes people crave stronger political leadership. And so we've got a sort of feedback cycle, right? It's a loop.

Robin Wigglesworth

Competing money has often been a recipe for absolute chaos.

But Rebecca, thanks so much for coming back on the show to talk to us about the assignats money at the time of the French Revolution. This has been absolutely fascinating.

Rebecca Spang

Thank you so much for having me. I've enjoyed the conversation.

Robin Wigglesworth

Well, that is sadly it for this week's episode of The Story of Money, though I could probably personally have done several more episodes on this. And don't forget, if you do like what you just heard, or even if you didn't, please leave us a review, a comment. I try to read them all. I'm Robin Wigglesworth, and we'll see you again next week.