but in 1795, after the
Terror, the system and the paper money collapsed. The gold and silver
money, which had been hoarded, returned to circulation. In June, 1795,
the quotation of the assignat oscillated violently. On one day a louis
of 24 livres would buy 450 paper livres, on another, 1000.[10] Paper
notes which fluctuated so violently were useless as money. They could
not serve either as a medium of exchange or as a measure of value.
Country people expressed their contempt for the assignats by calling
them _l'argent de Paris_.

A new currency of _mandats_ was tried, into which assignats were made
convertible. It was a complete failure. The _assignats_ were wound up
in 1796, and in February, 1797, there was "a general demonetisation of
paper money."[11] The holders got practically nothing. France returned
to hard cash, as Mexico has done recently. In 1918, when Mr. Hawtrey
wrote, he was able to describe the decline and full of the assignats as
an 'almost unique' instance of "the currency of a great nation fading
away into nothing." The Russian paper rouble has performed the same
feat since 1918. So has the Polish mark. And now (December, 1921) the
German paper mark is also fading into nothingness.[12] In Austria and
in most of the new states of Europe, the inconvertible paper legal
tender currency has lost almost the whole of its value, in comparison
with the pre-war coin which it pretends to represent.

[10] Hawtrey, _op. cit._, chap. XV.

[11] A _turn_ which even a Polish Chancellor of the Exchequer
might envy.

[12] In the second week of November the mark fell to 1300 to the
paper pound, recovering a day or two later (Wednesday, November
9) to 980.

The real difference between the present monetary conditions and the
American _continentals_, or the French assignats, is a difference not
of kind, but of degree and extent. The causes and the consequences, the
motives of those who work the mint, the ruin and demoralization of the
victims, the effects upon public and private debts and credit are the
same. But a whole continent populated by four hundred millions of
people is concerned. The commercial and moral fabric of European
civilization is tottering. Three years have passed since the war ended;
but the currencies and exchanges of Europe are in a much worse
condition than when peace was being negotiated.

At the end of June, 1921, I walked from my office in the Strand down t