Table of Contents
- Introduction
- France’s Pre-Revolutionary Crisis
- The Idea Behind Assignats
- Nationalization of Church Lands
- April 19, 1790: First Issue of Assignats
- Initial Reception and Economic Role
- Inflation and Devaluation
- Social and Political Reactions
- Legacy and Lessons
- Conclusion
- External Resource
- Internal Link
1. Introduction
On April 19, 1790, in the midst of economic collapse and revolutionary upheaval, France issued its first assignats—paper currency backed by confiscated church properties. It was a bold move that aimed to rescue a crumbling economy, but ultimately led to chaos and hyperinflation.
2. France’s Pre-Revolutionary Crisis
✔️ France was drowning in debt from wars and royal extravagance
✔️ Tax system was regressive and inefficient
✔️ The Estates-General had just convened, sparking political transformation
The monarchy had lost control over both finances and popular trust.
3. The Idea Behind Assignats
✔️ Proposed as a bond-like paper currency
✔️ Backed by the value of nationalized church lands (biens nationaux)
✔️ Intended to solve liquidity problems and stimulate trade
It was an early experiment in asset-backed fiat currency.
4. Nationalization of Church Lands
✔️ The National Assembly seized vast church properties
✔️ These lands were used to guarantee the value of assignats
✔️ Aimed to weaken clerical power and strengthen the revolution
In essence, religion was being sold to pay for the revolution.
5. April 19, 1790: First Issue of Assignats
✔️ Issued in denominations starting at 200 livres
✔️ Initially well-received by the public and merchants
✔️ Helped relieve short-term fiscal pressure
But optimism was short-lived as more assignats were printed.
6. Initial Reception and Economic Role
✔️ Stimulated short-term economic activity
✔️ Created a new medium of exchange in a fragile economy
✔️ Gave the revolutionary government some breathing space
The early success gave false hope in an unsustainable policy.
7. Inflation and Devaluation
✔️ Overprinting of assignats led to rapid inflation
✔️ Public trust eroded as purchasing power collapsed
✔️ Counterfeiting further exacerbated the crisis
By 1795, assignats had lost nearly all their value.
8. Social and Political Reactions
✔️ Price controls and penalties were introduced
✔️ Food riots and black markets emerged
✔️ Royalists and conservatives used the chaos as propaganda
The currency crisis intensified the divisions within France.
9. Legacy and Lessons
✔️ Highlighted the dangers of excessive money printing
✔️ Early warning on fiat inflation in unregulated environments
✔️ Lessons still cited by economists and monetary theorists
The assignats became a symbol of revolutionary overreach.
10. Conclusion
The issuing of French assignats in 1790 was a revolutionary attempt to rescue an economy in crisis using innovative but risky monetary policy. What began as a solution to state insolvency became a cautionary tale of inflation, speculation, and public distrust in paper money.
