Money of Terror: 50 Sous

This time "Weimar Artifacts" will tell about special guest item: XVIII century French Revolution paper money. The Revolution itself was full of events and we just can't cover here all moments we find interesting but rather focus on special historical fact. We touch here how paper money might have something to do with Revolution itself that lead to world famous Jacobins Terror.

Before 1790 France was already familiar with paper moneys because of John Law Mississippi Company. However, the previous experience didn't stop the government from issuing new paper money. The true reason was simple: it needed to cover debts and costs of running the state.

«It was constantly urged, and with a great show of force, that if any nation could safely issue it, France was now that nation; that she was fully warned by her severe experience under John Law; that she was now a constitutional government, controlled by an enlightened, patriotic people,—not, as in the days of the former issues of paper money, an absolute monarchy controlled by politicians and adventurers; that she was able to secure every livre of her paper money by a virtual mortgage on a landed domain vastly greater in value than the entire issue; that, with men like Bailly, Mirabeau and Necker at her head, she could not commit the financial mistakes and crimes from which France had suffered under John Law, the Regent Duke of Orleans and Cardinal Dubois.» (Andrew Dickson White. «Fiat Money Inflation in France.» D. Appleton-Century Company, 1933)

Besides, the new government controlled a large portion of Church lands accumulated through several centuries and bureaucrats needed to find out how to redistribute this property. Many people believed that this time they could do different.

It started as a security with kings profile on paper notes but these notes couldn't be used for everyday purchases. Although they relieved government finances for a moment, bureaucrats later found new reasons for issuing new portions of paper moneys.

On April 16 and 17, 1790, the total value of the first issue is 400 million livres divided into assignats of 1 000 livres with interest of 20 deniers per day (that is to say 3 % the year). Such a large nominal value does not destine them to be used as banknotes for the population, but to be hoarded by investors: some assignats even included coupons with interest and their quotation starts to be discussed. (Source)

One interesting reasoning for issuing notes of smaller denomination was in the fact that coins (silver and gold in the first place) were driven out of circulation because paper notes were depreciating simultaneously. Like in Weimar Republic rapidly depreciating currency paradoxically lead to “lack of a circulating medium”.

The 50 sous paper bill is from that times. As Mr. White wrote «a beginning was made by issuing one hundred millions in notes of five francs, and, ere long, obedient to the universal clamor, there were issued parchment notes for various small amounts down to a single sou.» How much one could buy with 50 sous paper bill? The answer is complicated because France implemented strict price controls as the government discovered rapid depreciation of the currency and general economic depression.

Robert L. Scheuttinger, Eamonn F. Butler, Forty Centuries of Wage and Price Controls: How Not to Fight Inflation have a piece about possible purchasing power of 30 sous:

With the coming of the Revolution in France, successive governments still failed to learn from experience. A series of so-called “Maximum Price” laws were passed and all proved ineffectual. We are told that in Paris of 1794 one observer reported that “one hundred and fifty women had crowded up to a butcher’s door at four o’clock in the morning. They screamed out that it was better to pay twenty or thirty sous and have what they wanted than to pay fourteen, the maximum price, and get nothing.”

Thus we can guess that 50 sous might be the price of a single meal in 1793.

Enlarged photos. The bill has stamps slightly visible on the photo. The frame holds bill with pressure, no glue was used.