n with his system of issues, was in effect
what in these days would be called an "_interconvertibility scheme_" By
various degrees of persuasion or force,--the guillotine looming up in
the background,--holders of _assignats_ were urged to convert them into
evidence of national debt, bearing interest at five per cent, with the
understanding that if more paper were afterward needed more would be
issued. All in vain. The official tables of depreciation show that the
_assignats_ continued to fall. A forced loan, calling in a billion
of these, checked this fall, but only for a moment. The
"_interconvertibility scheme_" between currency and bonds failed as
dismally as the "_interconvertibility scheme_" between currency and land
had failed. [58]

A more effective expedient was a law confiscating the property of all
Frenchmen who left France after July 14, 1789, and who had not returned.
This gave new land to be mortgaged for the security of paper money.

All this vast chapter in financial folly is sometimes referred to as if
it resulted from the direct action of men utterly unskilled in finance.
This is a grave error. That wild schemers and dreamers took a leading
part in setting the fiat money system going is true; that speculation
and interested financiers made it worse is also true: but the men who
had charge of French finance during the Reign of Terror and who made
these experiments, which seem to us so monstrous, in order to rescue
themselves and their country from the flood which was sweeping
everything to financial ruin were universally recognized as among the
most skillful and honest financiers in Europe. Cambon, especially,
ranked then and ranks now as among the most expert in any period. The
disastrous results of all his courage and ability in the attempt to
stand against the deluge of paper money show how powerless are the most
skillful masters of finance to stem the tide of fiat money calamity
when once it is fairly under headway; and how useless are all enactments
which they can devise against the underlying laws of nature.

Month after month, year after year new issues went on. Meanwhile
everything possible was done to keep up the value of paper. The city
authorities of Metz took a solemn oath that the _assignats_ should bear
the same price whether in paper or specie,--and whether in buying
or selling, and various other official bodies throughout the nation
followed this example. In obedience to those who belie