The History of Currency, 1252 to 1896

by William Arthur Shaw

them more than they have your own monies, so that the écu at this moment, to be in accordance, ought to pass for 78 sols. This arises from the craft of the foreigner, and the only exceptions of importance are the reals and pistoles of Spain, which are of known goodness and profit to the melter. They have never brought us harm, but, on the other hand, they are being melted down all over France, and at the present rate the foreigner gets a profit of about 7 livres on the mark of them, so that we advise prohibition of their circulation. Finally, we advise to do away with the old reckoning by livres and sols, and substitute for it the reckoning by écus."

The States-General, adopting in part the weakest suggestion of this remarkable paper, fixed the écus at 65 sols. The Mint officials at once represented that this only increased the evil. Henry accordingly assembled at Pontoise a conference of experts, and as the outcome of their deliberations decided on the adoption of the chief recommendation of the Mint officials' representation. By his proclamation of 13th November 1577, the reckoning by livres was abolished and that of gold écus substituted, values of under 1 écu or 60 sols. to be settled in divisional coinage, and circulation of all foreign coins prohibited, with the exception of Spanish and Portuguese gold ducats. It was forbidden to constrain payment of any sum above 100 sols. in billon money, and in sums below that amount to present more than the third of the total sum in such billon money.

FRANCE: FAILURE OF THE REFORM OF 1577

This extraordinary and, on the whole, admirably planned reformation merits so much detail because of the intense importance of its bearing. It in effect anticipated the reformation which was only accomplished in England in our own century. So far as it was actually put in practice it made France monometallic. The instinct of the time had found its way to a comprehension of the evil before it, and of the remedy. The evil was due to a badly-regulated, weltering, bimetallic system; the remedy was a monometallic system. It matters little that such terms were not in use and that the theory of the matter was not enunciated. The essential point was that the fact, the situation, was grasped in practice for a moment, dimly it may be, yet sufficiently to illustrate the whole antecedent and succeeding event. As a matter of fact the ordinance remained practically in great part a dead letter. That it did so—that it did not accomplish its purpose—has been attributed to the malheur, the unhappiness, of the time. It was due to no such thing. It was due to the simple fact that in the ordinance two quite distinct, and one of them impossible, reforms were projected. The attempt to tie down the écu to 60 sols. was foredoomed to failure, and as the eye of contemporaries was fixed more entirely on prices rather than on method of tender, the most significant part of the ordinance passed out of mind; already by the time of the death of Henry III., "the people," it is again said, had increased the écu to 64 sols. On the 30th March 1594 a proclamation

was issued to call it down to the value prescribed by the celebrated declaration of 1577, i.e. 60 sols. but, finding it impossible, the whole system created by that declaration was abolished (September 1602); the reckoning by écus was done away with, and the old system of reckoning by livres returned to; the gold écu was tariffed at 65 sols., and the circulation of foreign monies was again permitted. Henry IV., in his proclamation abolishing the almost invulnerable system established by Henry III., attributes to the attempts at working that system "the present dearness of everything." It is almost impossible fully to represent the unwisdom of this counter-reformation. To the eye of the then legislator there was only one evil—the rising of prices. If levelly effected it was, as a matter of fact, no evil at all—far the reverse indeed, and he did not need to concern himself about it at all. Besides, it was irresistible. The evil that escaped his eye, or to which he was blind, was that unceasing process of flux which was caused by the different ratios prevailing in different parts of Europe. The scheme of Henry III. would have proved effective, where no other measure or scheme of the time was or could be, and its abrogation in 1602 by Henry IV. removed a bulwark and a barrier, and made way for catastrophe.

Le Blanc considers that this repeal of the system established in 1577, itself failed of its purpose, because the increase of prices still continued. "In the seven years of peace which followed the ordinance of 1602,

the depreciation of the gold écu was as much as it had been in the preceding sixty-five years of war and trouble." The simple truth was, that it was much more likely to increase in time of peace and trade activity than in time of war. The point to notice was not at all how much the écu did depreciate, but the relativity of such its depreciation with that of the standard currency of other countries, and the monetary disorder which the inequality of ratio and of rate of depreciation induced.

Alarmed beyond measure at the evident failure of his plans, Henry IV. summoned monetary conferences of his wisest and best, and they were not even suspended by his assassination. The complaint again was, that the permission to circulate foreign monies had led to the transport of all the good coinage, to the ruin of commerce and great general disorder. Assemblies were held all over France in the trading towns, and the result of the advice of their delegates was the proclamation of 5th December 1614 (issued early in 1615). By this proclamation silver monies were left untouched, the tariff of the gold écu was increased from 65 to 75 sols., and the value of the mark of gold proportionally increased. The ratio was thereby altered from 12.01 to 13.90. It is hardly too much to say that this step and alteration in the ratio saved France from the catastrophe which befell England and Germany in 1622 and 1623. The arrangement established in 1615 endured unaltered until 1636, when a slight

reduction in the ratio was made to 13.61 (on the 8th May). Two months later it was found that so serious an export of good coinage was ensuing that "our kingdom would be entirely stripped of good currency, to our great damage, etc." A proclamation was accordingly issued (28th June 1636) attempting to regulate the course of exchange. The effort was vain, and on the following 22nd September the ratio was suddenly and violently altered to 15.36.[10]