The first paper money of France
In France paper bank notes have appeared in the beginning of 18 centuries. In 1716 Scot John Law (John Law) has taken out the patent for opening of private bank (Banque Generale) with the right of release of change bank notes to metal. These tickets began to be accepted on account of taxes on the same level with a hard coin. In 1718 Law's bank is renamed into the State bank.
John Law (1671 - 1729) - the French financier, the Scot by origin. He believed that it is possible to fill a hard coin lack with paper money that country prosperity depends on development of the credit having capitalist force. In 1718 Law has created the joint-stock trading Western company, and in 1719 has united a number of the companies in the Indian company monopolising almost all overseas trade in France. In January, 1720 Law became the general controller of the finance of France.
The Success of Bank, huge trust to its actions and banknotes, the mad gamble which has begun on actions of bank and its Western the companies have created favourable circumstances for use of unlimited issue of the bank
Tickets for the budgetary purposes of the royal government. By the end of 1719 difficulties of bank with exchange of tickets have begun.
In the beginning of 1720 the mass pressure on bank wishing has begun to exchange tickets for a hard coin. Exchange at first has been slowed down, and then and is suspended.
By the Decree from March, 11th, 1720 it has been declared an interdiction after May, 1st to use a hard coin; found at someone, it was subject to confiscation. John Law in January, 1720 became the general controller of the finance of France. «Law's system», based on release in the reference poor the banknotes, called unprecedented an exchange agiotage and gamble, has in a short space of time led Law's bank to bankruptcy, it was
It is compelled to run from France.
By the Decree from May, 22nd, 1720 it has been declared decrease in a nominal rate of bank notes twice. And on October, 10th, 1720 the decree about the termination of circulation of tickets after November, 1st has been published. Small tickets has been decided to exchange for the state bonds with reduction of a nominal rate of tickets still twice. The remained debt of the state under tickets has been decided to extinguish in the form of 2 % of eternal and 4 % of life annuities. The first experience of France with release paper monetary signs thus has ended. It has made so strong impression that later 50 years, in 1771, the king of France Louis XV was obliged for the blessing of the citizens «to expel for ever any system and the theory from the finance».
The Following release of paper bank notes in France has been carried out only in 1776 - 1790 by private credit institution "Caisse D"Escompte"face values from 200 to 1000 livres. In 1783 the government
Louis XVI has stopped exchange of these monetary signs and used for a covering of budgetary deficiency new releases of these tickets which received a compulsory course and have turned to paper unchangeable money. Soon behind it there was an agio on a metal coin. The quantity of tickets in circulation for 5 years has grown almost in 5 times.
the Author: Denisov A.E.