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The Story of Money · Economy & Finance

• 0:00
  Speaker 1: Nobody at the time knew or expected that this was
• 0:03
  Speaker 1: the French Revolution. So it's really a scene of bloody
• 0:07
  Speaker 1: violence and horror. And very shortly after that, they say,
• 0:12
  Speaker 1: all of the existing taxes are illegal because we didn't
• 0:16
  Speaker 1: vote on them. And then the next thing they say is,
• 0:19
  Speaker 1: you should keep paying them anyway until we get some
• 0:21
  Speaker 1: new taxes. Well, you can imagine which part of that
• 0:25
  Speaker 1: message got heard and which part got ignored. It ruins
• 0:28
  Speaker 1: everybody's finances because suddenly— people can no longer expect that
• 0:33
  Speaker 1: tomorrow is going to be just like yesterday. In fact,
• 0:36
  Speaker 1: it's pretty obvious that tomorrow is going to be nothing
• 0:39
  Speaker 1: like yesterday.
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  Speaker 2: Today on the story of money. Liberté, égalité, fraternité. The
• 0:51
  Speaker 2: rallying cry of the French Revolution is very familiar. But
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  Speaker 2: what you may not know is that this crucial moment
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  Speaker 2: in European history is was also a violent financial revolution.
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  Speaker 2: That's because money represented not just a way to buy
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  Speaker 2: and sell things, but also formed a piece of a
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  Speaker 2: larger social contract. And when that social contract is turned
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  Speaker 2: upside down, the results can be disastrous. So in today's show,
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  Speaker 2: part one of our series on the French Revolution, we'll
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  Speaker 2: be taking you through the revolution's origins under King Louis XVI,
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  Speaker 2: the storming of the Bessie, to the development of a
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  Speaker 2: controversial new currency called at different times both a saviour
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  Speaker 2: of France and a poison. This is monetary policy at
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  Speaker 2: the time of revolution. This is the Story of Money.
• 1:44
  Speaker 2: Gillian's away this week and I'm Robin Wigglesworth.
• 1:52
  Speaker 3: What happens next in the Story of Money? Nuveen has
• 1:55
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• 2:02
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• 2:10
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• 2:12
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• 2:13
  Speaker 3: Invest like the future is watching. Visit nuveen.com slash future
• 2:16
  Speaker 3: to learn more. Investing involves risk. Principal loss is possible.
• 2:25
  Speaker 2: To tell this story, I'm joined by Rebecca Spang. Rebecca
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  Speaker 2: is a professor of history at Indiana University. She's also
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  Speaker 2: the author of the fabulous Stuff and Money in the
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  Speaker 2: Time of the French Revolution, which is a cracking title, Rebecca.
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  Speaker 2: Thanks so much for being here today.
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  Speaker 1: Thank you. I never want to turn down a chance
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  Speaker 1: to talk about the French Revolution.
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  Speaker 2: In your book, you make an argument that really kind
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  Speaker 2: of almost upends the conventional thinking around what happened with
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  Speaker 2: money during the French Revolution, is it? Fair to say
• 2:56
  Speaker 2: that to really understand the French Revolution, we have to
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  Speaker 2: understand the story of French money at the time.
• 3:03
  Speaker 1: I definitely think so. I mean, the standard wisdom, such
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  Speaker 1: as it is, is that the French Revolution fails because
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  Speaker 1: the government over-issues paper money, there's hyperinflation, it's a catastrophe,
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  Speaker 1: the whole thing falls apart. And that story has been
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  Speaker 1: used as a sort of point of reference every time
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  Speaker 1: there's a question about fiat currency, actually. And my argument
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  Speaker 1: is that that actually gets things kind of backwards, that
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  Speaker 1: money in France is began losing people's trust way before
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  Speaker 1: the government printed enormous amounts of it. And that's because
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  Speaker 1: the monetary crisis was deeply entwined with the political and
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  Speaker 1: social conflict that was the revolution itself.
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  Speaker 2: Well, that sounds fascinating and right up our alley here
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  Speaker 2: at The Story of Money. Let's go to the beginning.
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  Speaker 2: Can you tell us a little bit about France? And
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  Speaker 2: this situation there leading up to the revolution in 1789,
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  Speaker 2: what's the country like at the time?
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  Speaker 1: So France before 1789, what is conventionally called the old regime, though,
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  Speaker 1: of course, nobody at the time knew they were living
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  Speaker 1: in an old regime, right? I mean, they're living in
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  Speaker 1: the kingdom of France and the king of France is
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  Speaker 1: an absolute ruler and That means he's bound to no one.
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  Speaker 1: There are no representative bodies. And at the same time,
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  Speaker 1: that doesn't mean that the king has limitless wealth. Far
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  Speaker 1: from it. In fact, there's a lot of it in
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  Speaker 1: the hands of the nobility and that of the Catholic Church.
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  Speaker 1: And the monarchy would really like to be able to
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  Speaker 1: tap into some of that wealth. because France in the
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  Speaker 1: 18th century is almost constantly at war, usually with Britain.
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  Speaker 2: Yeah, that sounds familiar. I've lost track of all the
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  Speaker 2: wars between France and England over the decades.
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  Speaker 1: Right, I mean, sometimes people call it the second hundred
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  Speaker 1: years war.
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  Speaker 2: And the king was Louis XVI at the time, right?
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  Speaker 4: Yes.
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  Speaker 2: Yes, yes.
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  Speaker 1: Louis XVI, I suppose Louis' most consistent character trait was
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  Speaker 1: his inconsistency. He's just not a strong leader. So on
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  Speaker 1: one hand, does he want to be a sort of
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  Speaker 1: model absolutist and the terror of his enemies, quote unquote,
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  Speaker 1: just like his great, great grandfather, Louis XIV, the Sun
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  Speaker 1: King who built Versailles. Yes, he would like to be that.
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  Speaker 2: I mean, so would I, to be fair. That sounds
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  Speaker 2: like a pretty good gig being called the Sun King.
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  Speaker 1: True enough, true enough. And you get Apollo on the
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  Speaker 1: ceiling of your bedroom. And yeah, I mean, the whole
• 5:54
  Speaker 1: world is sort of set up to revolve around you.
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  Speaker 1: But at the same time, Louis XVI also wants to
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  Speaker 1: be an enlightened modern monarch. He wants to sort of
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  Speaker 1: be efficient and organized. And that doesn't really go with
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  Speaker 1: the pageantry of absolutism. And personally, he really just likes
• 6:18
  Speaker 1: sort of futzing around and playing with puzzles.
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  Speaker 2: Like mechanical puzzles, right? He had a thing for mechanical puzzles.
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  Speaker 1: Of some kind? Yes. He sort of fancied himself a
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  Speaker 1: bit of a locksmith. And poor Louis, his biggest weakness
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  Speaker 1: as monarch was actually something that wasn't of his own
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  Speaker 1: devising at all. It was his marriage to the young
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  Speaker 1: Austrian princess, Marie Antoinette. You may have heard of her.
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  Speaker 1: And the problem there is that France and Austria have
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  Speaker 1: been ancestral enemies for centuries. Centuries. So people hate her
• 6:56
  Speaker 1: just because she's Austrian. And that's already there as a
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  Speaker 1: base long before her enemies at court start spreading rumors
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  Speaker 1: that she spends too much money, that she has lesbian orgies.
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  Speaker 1: So poor Louis. It's just not a good setup.
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  Speaker 2: Okay. Well, we actually have, I mean, there's lots of
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  Speaker 2: paintings of Louis XVI, our unfortunate absolute king come locksmith.
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  Speaker 2: I mean, looking at one here now and he's, I mean,
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  Speaker 2: maybe I'm throwing stones in glass houses here, but he
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  Speaker 2: looks a little bit chubby. He looks like he enjoys
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  Speaker 2: high court. He's very well dressed in like an ermine coat.
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  Speaker 2: He definitely looks like somebody who enjoys a glass of
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  Speaker 2: wine more than running a country. Is that fair, you think?
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  Speaker 1: Certainly, there were rumors that he enjoyed his wine perhaps
• 7:50
  Speaker 1: more than he should have. But what's really striking to
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  Speaker 1: me about this portrait is how much it is a
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  Speaker 1: copy of the famous Rigaud portrait of the great-great-grandfather, Louis XIV.
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  Speaker 1: And Louis XIV had been a ballet dancer, so he'd
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  Speaker 1: like to show off his legs. Louis XVI is not
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  Speaker 1: much of a dancer, but he's still trying to do
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  Speaker 1: the showing off his legs thing. And in the portrait
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  Speaker 1: of Louis XIV, he's got a big wig that somehow
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  Speaker 1: sort of balances the bigness of his ermine robes. Whereas here,
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  Speaker 1: it's true. Poor Louis XVI does look a little swamped
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  Speaker 1: by all of this pageantry that he's inherited. He's just
• 8:42
  Speaker 1: sort of filling the role. And he's not exactly the
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  Speaker 1: right man in the right place at the right time.
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  Speaker 2: So let's go into the economics and the financial side
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  Speaker 2: of things. I mean, what does France's economy look like?
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  Speaker 2: How does its financial system look like at the time?
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  Speaker 1: Two things to think about here. One is how do
• 9:00
  Speaker 1: the finances of the monarchy, of the state, And then
• 9:04
  Speaker 1: the other is how do ordinary people function on a
• 9:10
  Speaker 1: day-to-day basis? And credit is super, super important at both
• 9:16
  Speaker 1: levels because there literally is not enough money to go around,
• 9:21
  Speaker 1: and it's actually a quite thriving economy. France in the
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  Speaker 1: 18th century, like Britain, like the Low Countries, really sees
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  Speaker 1: something of a commercial revolution in which there are more
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  Speaker 1: goods available. Fifty percent of the households in Paris in
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  Speaker 1: the 1780s have a gold watch. So it's a reasonably
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  Speaker 1: prosperous place. And yet at the same time, everything is
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  Speaker 1: done on very small margins. and we're not seeing a
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  Speaker 1: lot of industrialization. There are two main sources of wealth.
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  Speaker 1: One is going to be France's sort of historical source
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  Speaker 1: of wealth, which is that it's a fairly big country,
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  Speaker 1: and it's a very strong agricultural country. And the other
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  Speaker 1: source of wealth is that France holds the wealthiest colony
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  Speaker 1: in the Americas, Saint-Domingue, which becomes Haiti, the poorest country
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  Speaker 1: in the world, which is a sugar plantation. Even up
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  Speaker 1: until spring 1789, France has what we would today call
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  Speaker 1: a good credit rating. People want to lend money to France.
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  Speaker 1: It has a strong economy. But for decades, the monarchy
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  Speaker 1: has been trying to tax the nobility because the nobility
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  Speaker 1: holds a lot of money. And for decades, the nobility
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  Speaker 1: has been resisting the saying that, no, no, no, no, no,
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  Speaker 1: for the king to try to do this is a
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  Speaker 1: sort of tyranny. It's despotism. And it's a really clever
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  Speaker 1: rhetorical maneuver on the part of the nobility to say
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  Speaker 1: that they're protecting themselves from despotism. Because what they're really
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  Speaker 1: doing is protecting their own privilege.
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  Speaker 2: Exactly.
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  Speaker 1: The privilege of not having to pay taxes. Exactly. But
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  Speaker 1: they position themselves as defenders of French liberty, French tradition,
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  Speaker 1: and that makes them very popular with ordinary people. And
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  Speaker 1: so the monarchy is kind of stuck because the monarchy
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  Speaker 1: wants to be popular with ordinary people. The ordinary people
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  Speaker 1: don't have any more money to pay taxes. The monarchy
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  Speaker 1: can borrow internationally money. But it's going to have to
• 11:42
  Speaker 1: pay more and more to borrow. And sooner or later,
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  Speaker 1: it's going to have to tax to pay back those loans.
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  Speaker 2: This is all coming to a head in 1789, because
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  Speaker 2: that's when Louis XVI calls this meeting a gathering, a
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  Speaker 2: concave of sorts, that hasn't happened in a very long time.
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  Speaker 2: It's called the Estates General. So what was the Estates
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  Speaker 2: General exactly?
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  Speaker 1: France is imagined as being made up of three estates,
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  Speaker 1: three categories of people. These aren't economic classes. They're social status.
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  Speaker 1: So your first estate is the clergy. And they're first
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  Speaker 1: because they're closest to God. Second estate is the nobility.
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  Speaker 1: And the third estate is absolutely everybody else. So the
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  Speaker 1: third estate is 97.5% of the population. And there had
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  Speaker 1: historically been meetings where representatives of each of those three
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  Speaker 1: estates would come together to discuss, well, for instance, whether
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  Speaker 1: there should be new taxes. But that meeting hadn't happened
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  Speaker 1: since 1614. That's 175 years. So imagine if something were
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  Speaker 1: to happen today that hadn't happened since 1851.
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  Speaker 2: Okay, so it was a huge deal. It was like
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  Speaker 2: a major announcement, in other words.
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  Speaker 1: It's a major announcement.
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  Speaker 2: So, Rebecca, what triggered the calling of the Estates General,
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  Speaker 2: the summoning of this grand conclave?
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  Speaker 1: As I mentioned, for decades, the monarchy has been trying
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  Speaker 1: to impose a new and uniform tax code that would
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  Speaker 1: extract wealth from the whole country. And every time it tries,
• 13:31
  Speaker 1: one of the representative bodies' nobility protests and says, no,
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  Speaker 1: you can't do that. You have to call a meeting
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  Speaker 1: of the Estates General. And, you know, monarchs have been like, no,
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  Speaker 1: we're not going to call a meeting of the Estates General.
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  Speaker 1: What are you talking about? And then finally, this just
• 13:46
  Speaker 1: keeps happening. And so in something like desperation, frustration, they're like, OK, fine,
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  Speaker 1: we'll have a meeting of the Estates General.
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  Speaker 2: And where was this meeting taking place?
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  Speaker 1: Since the 1660s, the court has been based at Versailles,
• 14:01
  Speaker 1: which is where Louis XIV built his enormous palace. And so,
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  Speaker 1: of course, all the representatives of the three estates need
• 14:09
  Speaker 1: to go to where the king is. But there's an
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  Speaker 1: enormous space at Versailles that's used for performances, where they
• 14:17
  Speaker 1: stage the opening ceremony of the estates generals. with great
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  Speaker 1: pomp and splendor. And the three estates each arranged in
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  Speaker 1: their own part of the room with their own costumes
• 14:31
  Speaker 1: so that we can very clearly visually see, ah, you're
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  Speaker 1: a representative of everybody else. And I'm over here with
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  Speaker 1: the nobility and the clergy are up there.
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  Speaker 2: OK, so what did happen with this meeting now? All right.
• 14:46
  Speaker 1: So almost from the beginning.
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  Speaker 4: Right.
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  Speaker 1: I mean, there's a grand ceremonial opening where Louis and
• 14:55
  Speaker 1: his chief minister, Jacques Necker, make little speeches. But. Shortly
• 15:02
  Speaker 1: after that, the representatives of the three estates are all
• 15:06
  Speaker 1: sent away to sort of ratify their membership. And they're
• 15:10
  Speaker 1: supposed to meet separately. So the first estate is going
• 15:14
  Speaker 1: to meet in its room and it's going to debate
• 15:16
  Speaker 1: an issue. And then it's going to say, we're the
• 15:18
  Speaker 1: clergy and we think this. And then the nobility is
• 15:21
  Speaker 1: supposed to meet in its room and say, we're the
• 15:23
  Speaker 1: nobility and we think this. And then the commoners are
• 15:26
  Speaker 1: supposed to say, excuse us, we're the commoners. Does anybody
• 15:30
  Speaker 1: want to listen to us? No, you probably don't. Oh,
• 15:33
  Speaker 1: never mind. And what happens is that the people elected
• 15:38
  Speaker 1: to be representatives of the third estate, many of them say,
• 15:42
  Speaker 1: you know what? We are actually the whole bloody country.
• 15:47
  Speaker 1: You know, we are the lawyers. We are the physicians.
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  Speaker 1: We are the farmers. We are the merchants. We are
• 15:55
  Speaker 1: the butchers and the bakers and the candlestick makers. We
• 15:58
  Speaker 1: are the nation. We are not going to meet as
• 16:01
  Speaker 1: the third estate. We are the assembly of the nation.
• 16:05
  Speaker 1: We are a national assembly. And that's how we're going
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  Speaker 1: to meet.
• 16:10
  Speaker 2: Yeah, and they were the ones that were paying the
• 16:13
  Speaker 2: vast majority of tax. So, Rebecca, you mentioned Jacques Necker,
• 16:18
  Speaker 2: Louis XVI's chief minister, and he's obviously a hugely important
• 16:22
  Speaker 2: person in France at the time, widely considered very competent
• 16:26
  Speaker 2: and a good minister. Can you tell us a bit
• 16:28
  Speaker 2: more about him and the role he played?
• 16:30
  Speaker 1: Yeah, sure. So, Necker comes in quite early, actually, as
• 16:38
  Speaker 1: Louis's financial minister and manages to get France through the
• 16:42
  Speaker 1: American Revolution without imposing any new taxes. So everybody loves him.
• 16:48
  Speaker 1: And he's a Genevan banker. So he has a reputation
• 16:52
  Speaker 1: as being a financial whiz. He's tapped in to all
• 16:55
  Speaker 1: the international circuits. And he's a Protestant. So he's a
• 17:01
  Speaker 1: foreigner and he's a Protestant. And so lots of other
• 17:04
  Speaker 1: people at court hate him. And so through court dynamics,
• 17:10
  Speaker 1: court factionalism, he gets driven out. And then he gets
• 17:15
  Speaker 1: recalled in 1788. And that's one of the elements, like
• 17:19
  Speaker 1: Colin of the Estates General, that has people thinking, oh,
• 17:22
  Speaker 1: something good is going to happen. Something exciting is going
• 17:25
  Speaker 1: to happen.
• 17:26
  Speaker 2: They've actually brought a competent person in, even if he
• 17:29
  Speaker 2: is a Protestant Geneva banker, essentially. That kind of heightens
• 17:33
  Speaker 2: expectations around this grand meeting.
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  Speaker 1: Right, because after all, he'd managed to get, as I said,
• 17:38
  Speaker 1: through the American Revolution without any new taxes. So obviously
• 17:42
  Speaker 1: he's got lots of tricks. He knows lots of modern
• 17:45
  Speaker 1: sorts of financing. We're going to be fine.
• 17:48
  Speaker 2: I guess, again, it is in the wake of the
• 17:50
  Speaker 2: American Revolution and the whole no taxation without representation must
• 17:55
  Speaker 2: have been very much front and centre for this third
• 17:59
  Speaker 2: estate or new national assembly, as it were.
• 18:02
  Speaker 1: Yes, yes. I mean, they're very, very cued into that
• 18:05
  Speaker 1: rhetoric And of course, a leading figure in the National
• 18:08
  Speaker 1: Assembly is the Marquis de Lafayette, who was a hero
• 18:12
  Speaker 1: of the American Revolution, who names his children George and Virginia.
• 18:19
  Speaker 1: So there is definitely some echoing, some mirroring. So they say, no,
• 18:25
  Speaker 1: we're a National Assembly member. And very shortly after that,
• 18:30
  Speaker 1: they say, and what that means is that all of
• 18:33
  Speaker 1: the existing taxes are illegal because we didn't vote on them.
• 18:38
  Speaker 1: And then the next thing they say is, but you
• 18:40
  Speaker 1: should keep paying them anyway until we get some new
• 18:43
  Speaker 1: taxes on the books. And well, you can imagine which
• 18:46
  Speaker 1: part of that message got heard and which part got ignored.
• 18:50
  Speaker 2: God, it does feel like things are slightly spinning out
• 18:52
  Speaker 2: of poor Louis XVI's control quite quickly, right? But you
• 18:57
  Speaker 2: said they all go into these different meeting rooms to gather.
• 19:00
  Speaker 2: I mean, what I find so delightful is that there's
• 19:03
  Speaker 2: actually quite an important thing that happens on a tennis court,
• 19:06
  Speaker 2: like an indoor tennis court. There's something called the tennis
• 19:09
  Speaker 2: court oath.
• 19:10
  Speaker 5: That's because the group that's calling itself the National Assembly
• 19:16
  Speaker 5: one day gets locked out of the room in which
• 19:20
  Speaker 5: it was scheduled to meet and they panic.
• 19:23
  Speaker 1: They assume that this is the lead up to them
• 19:27
  Speaker 1: being permanently locked out, that because they've called themselves a
• 19:30
  Speaker 1: National Assembly, they're about to be sent home. And so
• 19:35
  Speaker 1: they're trying to find a place to meet. They discover
• 19:38
  Speaker 1: that there's this indoor tennis court that's open. They go
• 19:42
  Speaker 1: in there. And in a very dramatic scene that's been
• 19:46
  Speaker 1: represented several, many times by artists, they swear an oath.
• 19:50
  Speaker 1: never to be disbanded until they've written a constitution. And,
• 19:56
  Speaker 1: you know, Louis XVI, There were probably people at court
• 19:59
  Speaker 1: who wanted to send these guys away, but Louis wasn't
• 20:03
  Speaker 1: planning on it. But by the accident of them getting
• 20:07
  Speaker 1: locked out, it further intensifies their commitment to what turns
• 20:13
  Speaker 1: out to be a quite revolutionary project.
• 20:15
  Speaker 2: Kind of makes sense. I mean, not a lot of
• 20:17
  Speaker 2: built up trust between those different estates. So I'm not
• 20:20
  Speaker 2: surprised that when they found themselves locked out that they
• 20:23
  Speaker 2: feared the worst. Things are now clearly coming to a head, Rebecca.
• 20:28
  Speaker 2: It's June 1789, and a month later, on July 14th,
• 20:34
  Speaker 2: a mob storms the Bastille, the imposing royal citadel in Paris,
• 20:39
  Speaker 2: and formally starts what later becomes known as the French Revolution.
• 20:45
  Speaker 2: But let's talk about that after the break.
• 20:52
  Speaker 4: Investors today are most worried about three key factors. Interest rates,
• 20:57
  Speaker 4: the corporate credit cycle, and the impact of artificial intelligence.
• 21:01
  Speaker 4: Artificial intelligence is impacting the jobs market and corporate margins.
• 21:05
  Speaker 4: Interest rates are of concern because people are wondering when
• 21:08
  Speaker 4: will the Fed start to raise or lower interest rates again.
• 21:11
  Speaker 4: And finally, the corporate credit cycle. If the economy is
• 21:14
  Speaker 4: to weaken, what does that mean for the ability of
• 21:17
  Speaker 4: corporate credit to hold up? We are thinking about the
• 21:20
  Speaker 4: next generation and constantly adapting our portfolios to meet their needs.
• 21:30
  Speaker 2: And we are back. Fast forward a month from that
• 21:34
  Speaker 2: meeting in Versailles of the Estates General and the Tennis
• 21:37
  Speaker 2: Court Oath, and we're now in the early days of
• 21:40
  Speaker 2: the revolution. July 14th, 1789, the day the Bastille is stormed.
• 21:46
  Speaker 2: So Rebecca, can you take us to that day, what
• 21:49
  Speaker 2: it must have looked like at the time for people there?
• 21:52
  Speaker 2: Because it's such a An incredible moment in French, but
• 21:56
  Speaker 2: really European history, right? Right.
• 21:58
  Speaker 1: But again, remember, nobody at the time knew or expected
• 22:03
  Speaker 1: that this was, quote unquote, the beginning of the French Revolution.
• 22:07
  Speaker 1: It gets commemorated as such years and years later. But
• 22:11
  Speaker 1: so what's happening here is the National Assembly is meeting
• 22:15
  Speaker 1: in Versailles. Paris is 25 miles away. People get some news.
• 22:20
  Speaker 1: They also get a lot of rumours. Louis, of course,
• 22:24
  Speaker 1: is being indecisive. One day, he absolutely refuses to deal
• 22:29
  Speaker 1: with the self-styled National Assembly. And then the next day,
• 22:32
  Speaker 1: he's like, you know, okay, fine. Everybody else should actually
• 22:35
  Speaker 1: go meet with them. So he's back and forth. But
• 22:39
  Speaker 1: then he fires his very popular chief minister, Jacques Necker.
• 22:45
  Speaker 1: And Everybody imagines that if Louis has sacked Necker, his
• 22:50
  Speaker 1: next step is going to be to shut down the
• 22:52
  Speaker 1: assembly and maybe even to send the army against the
• 22:57
  Speaker 1: assembly supporters in Paris. So a crowd in Paris tries
• 23:02
  Speaker 1: to arm itself, and it ends up at this huge,
• 23:07
  Speaker 1: hulking medieval fortress on the far eastern edge of the city.
• 23:13
  Speaker 1: that was famous for its horrors, the Bastille. I mean,
• 23:16
  Speaker 1: at this point, there are seven prisoners in the Bastille.
• 23:21
  Speaker 1: It's not really being actively used.
• 23:25
  Speaker 2: But that's where they used to take political prisoners. That's
• 23:28
  Speaker 2: why it's symbolically powerful as well.
• 23:31
  Speaker 1: It's symbolically powerful because political prisoners wrote about the horrors
• 23:35
  Speaker 1: of the Bastille. But because it's so close to Paris,
• 23:39
  Speaker 1: it also has a sort of familiarity. And it's sort
• 23:42
  Speaker 1: of been looming over the city for centuries. So by
• 23:47
  Speaker 1: summer of 1789, the regiment guarding it, it's not really
• 23:53
  Speaker 1: a crack regiment. So when there's this huge crowd there,
• 23:57
  Speaker 1: first they're like, okay, go away. Then they're like, oh, well, sure,
• 24:01
  Speaker 1: you could come in to the outer courtyard. So they
• 24:04
  Speaker 1: get down, get in through one drawbridge. But then something happens.
• 24:10
  Speaker 1: Somebody fires a cannon. There's fighting. About 100 Parisians are killed.
• 24:17
  Speaker 1: And while the Parisians, with the help of some soldiers
• 24:21
  Speaker 1: who are stationed in Paris, do eventually take control of
• 24:26
  Speaker 1: the fortress, they then also cut off the head of
• 24:31
  Speaker 1: the man who'd been sort of the governor of the
• 24:33
  Speaker 1: fortress and parade that around. So it's really a scene
• 24:37
  Speaker 1: of bloody violence and horror. And the immediate reaction in
• 24:43
  Speaker 1: the National Assembly in Versailles is to react with horror
• 24:47
  Speaker 1: and just freak out about the crowd violence. But then
• 24:51
  Speaker 1: just a day or two later, they realize that their
• 24:55
  Speaker 1: calls for constitutional reform are actually going to be strengthened.
• 25:01
  Speaker 1: They're going to have some muscle behind them if they
• 25:04
  Speaker 1: claim common cause with this violent mob. And at the
• 25:10
  Speaker 1: same time, people in Paris are thinking, ah, you know,
• 25:14
  Speaker 1: it gives what we've just done a lot of legitimacy
• 25:18
  Speaker 1: if we say we did that to defend the National Assembly.
• 25:22
  Speaker 1: So it's a really unstable alliance, but it's absolutely key
• 25:26
  Speaker 1: to understanding revolutionary dynamics.
• 25:29
  Speaker 2: Yeah. And what happens to the royal family? Do they,
• 25:32
  Speaker 2: I assume, they don't handle this with calmness, essentially?
• 25:37
  Speaker 1: Well, Louis XVI's brothers both immediately flee the country, as
• 25:44
  Speaker 1: do many other nobles. So that actually has an economic
• 25:48
  Speaker 1: effect because they're some of the biggest spenders. Marie Antoinette
• 25:53
  Speaker 1: would really like this whole thing to be put down
• 25:56
  Speaker 1: and taken care of. Louis XVI famously, on the night
• 26:01
  Speaker 1: of the 14th of July, writes in his diary, nothing.
• 26:06
  Speaker 1: But it was his hunting diary. And what he meant was,
• 26:08
  Speaker 1: you know, he didn't kill anything that day. But the
• 26:11
  Speaker 1: political and social chaos, right? So in the aftermath of this,
• 26:16
  Speaker 1: there are attacks on Chateau across France. This chaos means
• 26:21
  Speaker 1: that France's financial situation is much, much worse, right? Because,
• 26:24
  Speaker 1: I mean, you don't need complicated modern credit rating agencies
• 26:30
  Speaker 1: to tell you that this is not really somebody you
• 26:34
  Speaker 1: should be lending your money to.
• 26:35
  Speaker 2: Yeah, so if there were rating agencies, they'd definitely be
• 26:38
  Speaker 2: looking at France's credit rating and downgrading it a few
• 26:41
  Speaker 2: notches at this chaos. But the National Assembly, they promise
• 26:47
  Speaker 2: that they are going to stay current at all of
• 26:49
  Speaker 2: France's debts. They say, we are not going to default.
• 26:53
  Speaker 2: Just calm down, everybody. We have a lot of debts
• 26:56
  Speaker 2: that I assume are owned by, certainly like bankers in
• 26:58
  Speaker 2: Geneva and in England and the Netherlands, but especially also
• 27:01
  Speaker 2: in the country, the nobles. And I guess they want
• 27:04
  Speaker 2: to kind of make sure that they seem serious and
• 27:07
  Speaker 2: proper people.
• 27:08
  Speaker 1: That's right. They say, we will never declare the infamous
• 27:12
  Speaker 1: word bankruptcy.
• 27:13
  Speaker 2: But given the financial situation is spiraling so out of control,
• 27:17
  Speaker 2: how are they going to get the money to do that, though?
• 27:19
  Speaker 2: How are they going to stay current on France's obligations?
• 27:22
  Speaker 1: Well, there's quite a bit of uncertainty about that. But
• 27:26
  Speaker 1: there's actually one enormous source of wealth within France that
• 27:32
  Speaker 1: at the moment is completely untapped. And that's the wealth
• 27:36
  Speaker 1: of the Catholic Church.
• 27:38
  Speaker 2: Oh, the first estate, essentially. Right, the first estate. The
• 27:42
  Speaker 2: people closest to God. They've got a big cookie jar
• 27:44
  Speaker 2: of wealth that nobody dares touch until now.
• 27:47
  Speaker 1: That's right. The Catholic Church has a reputation as not
• 27:51
  Speaker 1: managing its property very well, just sort of hoarding it,
• 27:55
  Speaker 1: sort of dragon-like. And so what if we could... nationalize
• 28:05
  Speaker 1: those properties. And, you know, we probably don't need four
• 28:11
  Speaker 1: churches in this village of 1,200 people. So, you know,
• 28:17
  Speaker 1: maybe we could, like, pay with a church or something.
• 28:21
  Speaker 1: And so on a motion that's actually made by a
• 28:26
  Speaker 1: member of the first estate, made by somebody who's a bishop,
• 28:31
  Speaker 1: his name is Talleyrand, You may have heard of him.
• 28:34
  Speaker 1: He ends up being Napoleon's foreign minister.
• 28:37
  Speaker 2: Charles Maurice de Tyran Perigord, to use his full name.
• 28:41
  Speaker 2: Can you tell us a little bit about him? Right.
• 28:43
  Speaker 1: Well, as his name suggests, you know, if you've got
• 28:45
  Speaker 1: that many names and you have a de, you're a
• 28:48
  Speaker 1: member of the nobility, right? So his family have been
• 28:52
  Speaker 1: nobles for hundreds and hundreds of years. And the sons
• 28:57
  Speaker 1: of nobles, you know, the first son is going to
• 28:59
  Speaker 1: inherit the title. And then the second goes into the army.
• 29:03
  Speaker 1: But he has a little bit of a limp, which
• 29:06
  Speaker 1: means that he's really not suited to a military career.
• 29:09
  Speaker 1: So he very quickly becomes a bishop. It's just because
• 29:13
  Speaker 1: of the family he was born into. Talleyrand makes a
• 29:17
  Speaker 1: motion in the National Assembly that all of the properties
• 29:21
  Speaker 1: of the church should be put at the disposal of
• 29:24
  Speaker 1: the nation. They vote on that. It passes. And so
• 29:30
  Speaker 1: what had been the properties of the Catholic Church are
• 29:34
  Speaker 1: now the national properties, the bien nationaux. And that's an
• 29:39
  Speaker 1: enormous pool. Nobody has any idea how vast it actually
• 29:42
  Speaker 1: is or isn't, on which France can draw to pay
• 29:47
  Speaker 1: its debts.
• 29:47
  Speaker 4: Okay.
• 29:48
  Speaker 2: I mean, it sounds a little bit like what Henry
• 29:49
  Speaker 2: VIII did with the church a few centuries earlier. But
• 29:53
  Speaker 2: like you say, the Catholic Church in France is so
• 29:57
  Speaker 2: much more entrenched and so wealthily has been so powerful
• 30:01
  Speaker 2: for centuries and centuries and centuries. I'm going to go
• 30:04
  Speaker 2: out on a limb and say that they did not
• 30:06
  Speaker 2: react well to this, though, right?
• 30:09
  Speaker 1: Correct. I mean, remember that in 18th century France, Catholicism
• 30:16
  Speaker 1: is the only legal religion. You could lose all your
• 30:20
  Speaker 1: property if you were an out Protestant. It's an institution.
• 30:25
  Speaker 1: It does most of the poor relief. And so while
• 30:30
  Speaker 1: some members of the French clergy were uncomfortable with how
• 30:34
  Speaker 1: wealthy the church had become over the centuries and actually
• 30:37
  Speaker 1: quite welcomed the nationalization of the properties as restoring the
• 30:42
  Speaker 1: church to its ancient, primitive state of poverty, right? I mean,
• 30:48
  Speaker 1: nowhere did Jesus say to his disciples, go forth and
• 30:51
  Speaker 1: be property developers.
• 30:53
  Speaker 2: No.
• 30:54
  Speaker 1: So they really think that this is like what the
• 30:56
  Speaker 1: church is supposed to be. It's not supposed to own things.
• 30:59
  Speaker 1: And in contrast, about 50 percent of the clergy and
• 31:04
  Speaker 1: their followers believe that this is theft and sacrilege. And
• 31:10
  Speaker 1: the pope, of course, agrees with the latter.
• 31:14
  Speaker 2: Yes, I'm entirely unsurprised by that. But just on Tyran,
• 31:18
  Speaker 2: because he's such a famous, almost Machiavellian personality in French history,
• 31:24
  Speaker 2: I'm curious, quickly, did he propose this measure as a
• 31:29
  Speaker 2: way of forwarding or increasing his political status, his position,
• 31:34
  Speaker 2: that he could see the winds of change and where
• 31:36
  Speaker 2: they were blowing? So he thought he could be a
• 31:39
  Speaker 2: bishop who kind of is on the side of the people?
• 31:42
  Speaker 2: Or did he genuinely feel that this deserved to be nationalized?
• 31:46
  Speaker 1: Oh, I think it's more the former. I mean, Talleyrand
• 31:50
  Speaker 1: is born into a very old aristocratic family. He has
• 31:55
  Speaker 1: no particular interest in losing privilege, losing position, losing wealth.
• 32:02
  Speaker 2: But okay, so France now has this huge pool of
• 32:07
  Speaker 2: money and assets, really, like land and churches and maybe
• 32:11
  Speaker 2: some golden money as well, in the form of all
• 32:14
  Speaker 2: this stuff it sees from the church.
• 32:18
  Speaker 6: How are they going to turn essentially a church or
• 32:21
  Speaker 6: thousands of churches around the country into actual money that
• 32:24
  Speaker 6: they can use to service their debts and pay for
• 32:28
  Speaker 6: all other good stuff that presumably this new National Assembly
• 32:31
  Speaker 6: wants to do.
• 32:32
  Speaker 1: What they end up doing in December of 1789 is
• 32:37
  Speaker 1: to create a new financial instrument backed by the future
• 32:43
  Speaker 1: sale of those properties. And it's called the assignat because
• 32:48
  Speaker 1: it's assigned to the pool of money that is eventually
• 32:54
  Speaker 1: going to come in. from the sale of the properties.
• 32:58
  Speaker 1: So at this point, the asinia, they're not money at all.
• 33:05
  Speaker 1: They're promises to pay And they're interest-bearing, and there's no
• 33:12
  Speaker 1: expectation that they're going to circulate widely. It's a sort
• 33:16
  Speaker 1: of short-term debt, much like the other sort of paper
• 33:21
  Speaker 1: instruments that the monarchy had been using within various branches
• 33:26
  Speaker 1: throughout the 18th century.
• 33:28
  Speaker 2: Okay, so it's kind of like a short-term collateralized bond,
• 33:31
  Speaker 2: with the collateral being this unknowably but surely huge, vast
• 33:37
  Speaker 2: sum of church assets that they've just nationalized.
• 33:40
  Speaker 1: Yes, that's exactly what it is.
• 33:42
  Speaker 2: Yeah. What were the interests on the assignats?
• 33:47
  Speaker 1: At this point, I think it's 5% annual, which is
• 33:51
  Speaker 1: a pretty good return.
• 33:52
  Speaker 2: No, it's pretty okay, especially for the era.
• 33:55
  Speaker 1: Okay, so.
• 33:56
  Speaker 2: We've talked about some of the macro issues, the bigger,
• 33:59
  Speaker 2: broader pictures going with France's finances. How were ordinary people,
• 34:03
  Speaker 2: how were they using money and credit in 18th century
• 34:07
  Speaker 2: France at the time?
• 34:08
  Speaker 1: Remember that for reasons of ideology in France, as elsewhere
• 34:15
  Speaker 1: in Western Europe at this time, money is defined in
• 34:20
  Speaker 1: terms of gold and silver, but it's not like France
• 34:23
  Speaker 1: has its own gold and silver currency.
• 34:26
  Speaker 2: A big problem if you have that as your currency,
• 34:29
  Speaker 2: you don't actually have that much gold yourself or silver
• 34:31
  Speaker 2: for that matter.
• 34:32
  Speaker 1: But it's really a situation where ordinary people are doing
• 34:37
  Speaker 1: an awful lot of day-to-day life on credit. It's also
• 34:42
  Speaker 1: a world in which most people, unless you're a member
• 34:45
  Speaker 1: of the nobility or maybe you're in the army, most
• 34:48
  Speaker 1: people don't move very far. So everything they do is
• 34:52
  Speaker 1: with the same merchants. There's a lot of familiarity. and
• 34:57
  Speaker 1: accounts will just get settled sometime. So think of the
• 35:01
  Speaker 1: example of you're a Paris dressmaker, and the Duchess de
• 35:08
  Speaker 1: Namur comes to you and says, you know, oh, I
• 35:12
  Speaker 1: need a new dress for a ball, and, you know, oh,
• 35:15
  Speaker 1: I like that silk. And, you know, are you going
• 35:18
  Speaker 1: to make the Duchess pay in advance? Well, of course not, because,
• 35:24
  Speaker 1: I mean, she's a Duchess. And if she wears your dress, well,
• 35:30
  Speaker 1: you know, that's free advertising for your dressmaking shop. So
• 35:34
  Speaker 1: you want her as a client. And she's a duchess.
• 35:38
  Speaker 1: Her family has been prominent in France for possibly 600 years.
• 35:45
  Speaker 1: She could pay you when she gets around to it.
• 35:47
  Speaker 1: But because she pays you when she gets around to it,
• 35:50
  Speaker 1: that means the dressmaker is will be paying her suppliers,
• 35:54
  Speaker 1: the people who sold her the silk, the people who
• 35:56
  Speaker 1: sold her the lace, when she eventually gets paid. And
• 36:00
  Speaker 1: she's going to be paying the seamstresses who work in
• 36:03
  Speaker 1: her shop when she gets paid. So everybody is depending
• 36:08
  Speaker 1: on everybody else. And it works fine as long as
• 36:13
  Speaker 1: there's no shock to the system.
• 36:16
  Speaker 2: Yeah, but it sounds incredibly fragile when you have a
• 36:19
  Speaker 2: big shock like, an incipient revolution erupting all around you.
• 36:25
  Speaker 2: And that kind of ruins your poor dressmaker's finances.
• 36:29
  Speaker 1: It ruins your dressmaker's finances. It ruins everybody's finances because
• 36:33
  Speaker 1: suddenly people can no longer expect that tomorrow is going
• 36:38
  Speaker 1: to be just like yesterday. In fact, it's pretty obvious
• 36:41
  Speaker 1: that tomorrow is going to be nothing like yesterday. And
• 36:44
  Speaker 1: so suddenly everybody refuses to deal on credit. Everybody wants
• 36:50
  Speaker 1: cash right away, and there just is not enough of
• 36:54
  Speaker 1: it in the system. And that's a big problem.
• 36:58
  Speaker 2: And that's where the assignats start morphing a little bit.
• 37:02
  Speaker 2: So from being short-term collateralized bonds to raise money to
• 37:07
  Speaker 2: keep carrying on the obligations, but not really envisaged as
• 37:10
  Speaker 2: something you trade or let alone use as money, the
• 37:15
  Speaker 2: assembly then starts thinking about turning it into Something that
• 37:20
  Speaker 2: is legal tender, right?
• 37:21
  Speaker 1: Right. Well, kind of. So what they do in April
• 37:25
  Speaker 1: of 1790 is to create this bizarre hybrid, the assignat monnaie,
• 37:31
  Speaker 1: where they say, well, you know, we've created these assignats
• 37:35
  Speaker 1: and there's this liquidity problem throughout the country.
• 37:40
  Speaker 6: How about if.
• 37:40
  Speaker 1: We say that the assignat can circulate as money if
• 37:45
  Speaker 1: you want them to? So they've got this As I said,
• 37:47
  Speaker 1: it's a hybrid because it's still interest-bearing, but it's supposed
• 37:52
  Speaker 1: to be good in any transaction. So imagine you've got
• 37:56
  Speaker 1: your interest-bearing Asinia for 500, and it's been in circulation
• 38:03
  Speaker 1: for six months. So that means it's got 2.5% interest
• 38:06
  Speaker 1: on it. And you've got to calculate, well, is it
• 38:08
  Speaker 1: still worth 500? Or is it worth 500 plus 2.5%
• 38:10
  Speaker 1: of 500?
• 38:10
  Speaker 5: So it's not.
• 38:17
  Speaker 1: It's not an easy hybrid, but it does seem like
• 38:21
  Speaker 1: this is actually going to solve the problem. We're going
• 38:23
  Speaker 1: to have something that circulates. People can accept it if
• 38:27
  Speaker 1: they want to. And we're getting closer and closer to
• 38:31
  Speaker 1: being able to start selling off some of these extra churches.
• 38:36
  Speaker 1: We've discovered that, you know, some cathedrals have far more
• 38:39
  Speaker 1: storage space than we need. You know, we found some
• 38:43
  Speaker 1: choir boy robes that nobody ever wears. We're going to
• 38:45
  Speaker 1: sell all this stuff.
• 38:46
  Speaker 2: I think the Asignat sounds like actually a very good
• 38:50
  Speaker 2: idea in theory, maybe even a genius idea, that you're
• 38:53
  Speaker 2: kind of nationalising this vast pool of wealth that's in
• 38:56
  Speaker 2: the country. It's a national emergency. So you help the
• 39:01
  Speaker 2: government's finances to restore its creditworthiness, and it maybe helps
• 39:07
  Speaker 2: the economy by getting something that kind of maybe doesn't
• 39:10
  Speaker 2: quack like money, but at least walks... A little bit.
• 39:13
  Speaker 2: Waddles around a bit like money.
• 39:15
  Speaker 1: Waddles around a bit like money and, in theory, is
• 39:20
  Speaker 1: not going to be inflationary because they haven't created money.
• 39:24
  Speaker 1: They've just created, as they said at the time, land
• 39:27
  Speaker 1: in a form that can circulate. And when somebody eventually
• 39:31
  Speaker 1: buys the church property, the properties that had been held
• 39:34
  Speaker 1: by the church, then the Asenia is going to come
• 39:37
  Speaker 1: back into the government and they're going to have a
• 39:39
  Speaker 1: big bonfire and destroy them. So it actually sounds like
• 39:43
  Speaker 1: a really good system.
• 39:45
  Speaker 2: Yeah, like a hard money, something that was backed by
• 39:48
  Speaker 2: the hardest asset there is, like land and churches and buildings.
• 39:52
  Speaker 2: By now, in 1790, the National Assembly is meeting in
• 39:57
  Speaker 2: central Paris, right? And the royal family, they've up sticks,
• 40:01
  Speaker 2: they've moved to the city from the Versailles to the
• 40:04
  Speaker 2: Tuileries Palace. And the ASIC NAT has become this massively
• 40:10
  Speaker 2: controversial debate in this new National Assembly. So Rebecca, tell us,
• 40:14
  Speaker 2: what were people arguing about? What was the issue with
• 40:16
  Speaker 2: the ASIC NAT?
• 40:17
  Speaker 1: So the issue here is that Probably the best investment
• 40:24
  Speaker 1: you could make in France before the revolution was to
• 40:28
  Speaker 1: buy yourself a position in the government. You could buy
• 40:32
  Speaker 1: yourself a position as a judge, as a ceremonial judge.
• 40:37
  Speaker 1: You could buy yourself a position as a major general.
• 40:40
  Speaker 1: It cost a lot of money. And so— The government
• 40:43
  Speaker 1: was glad to sell those positions because it really needs money.
• 40:46
  Speaker 1: But your reward was that it made you a member
• 40:49
  Speaker 1: of the second estate. It made you a member of
• 40:52
  Speaker 1: the nobility. And it may be some of these positions
• 40:54
  Speaker 1: even ennobled your children. So in the course of the
• 40:58
  Speaker 1: summer of 1789, the revolutionaries say, you know, that was
• 41:03
  Speaker 1: really a corrupt system. We're getting rid of that. We're
• 41:06
  Speaker 1: not going to do that anymore. At the same time,
• 41:09
  Speaker 1: one of the most important things that the National Assembly
• 41:12
  Speaker 1: does in August 1789 is agree to pass a Declaration
• 41:18
  Speaker 1: of the Rights of Man and the Citizen.
• 41:20
  Speaker 2: And obviously, this is in the decades after the American Revolution,
• 41:23
  Speaker 2: so there's something in the air, as it were. Obviously,
• 41:27
  Speaker 2: France played a pivotal role in the American Revolution.
• 41:30
  Speaker 1: It begins with the statement that all men are created equal.
• 41:35
  Speaker 1: Men are born and remain free and equal in rights.
• 41:39
  Speaker 1: And that is such a complete challenge to the idea
• 41:43
  Speaker 1: of a society made up of three separate estates. And
• 41:47
  Speaker 1: then it says all sovereignty resides in the nation. And
• 41:51
  Speaker 1: at the same time, item 17 says all property is sacred.
• 41:57
  Speaker 1: So wait, we're going to keep property relations equal, but
• 42:02
  Speaker 1: we're going to change the social structure and we're going
• 42:03
  Speaker 1: to change the political structure. So if we're going to
• 42:07
  Speaker 1: abolish these venal offices, jobs that people bought, we have
• 42:13
  Speaker 1: to reimburse them. Where are we going to get the
• 42:15
  Speaker 1: money to reimburse them? Maybe we need to issue more asinia.
• 42:20
  Speaker 1: And so that debate about how to reimburse the venal
• 42:26
  Speaker 1: office holders, and they have to do it or the
• 42:28
  Speaker 1: people stay in post and the revolution really isn't going
• 42:32
  Speaker 1: very far. That debate takes an entire month. They come
• 42:37
  Speaker 1: back to it over and over and over again through
• 42:41
  Speaker 1: August and September of 1790. And as you said, by
• 42:45
  Speaker 1: this point, they're meeting in Paris. They're centrally located. They're
• 42:49
  Speaker 1: very close to the crowds in the Palais Royal. And
• 42:53
  Speaker 1: at the other hand, they're meeting in what had been
• 42:56
  Speaker 1: an indoor writing stable. I mean, they needed a big space.
• 43:01
  Speaker 1: There are 1,200 of these guys. But remember, this is
• 43:05
  Speaker 1: the 18th century. There's no electric lighting. There's no electric
• 43:11
  Speaker 1: PA system. So it's going to be dark if they
• 43:15
  Speaker 1: meet very late. And they've really got to use their
• 43:20
  Speaker 1: outdoor voice if they want to be heard in this room. Wow.
• 43:24
  Speaker 2: So, okay. So you have 1,200 men plus the occasional
• 43:28
  Speaker 2: visitors and tourists gawping along in a very dark indoor
• 43:31
  Speaker 2: stable room. shouting at each other very loudly throughout the
• 43:35
  Speaker 2: day about massively important issues of national policy. I can
• 43:41
  Speaker 2: see how that would get quite fraught, even when the
• 43:44
  Speaker 2: issues of monetary policy.
• 43:47
  Speaker 1: Something that listeners may not know is that the speaker
• 43:52
  Speaker 1: is at one end of this big hall. And as
• 43:55
  Speaker 1: it happened, the people who were eager for more change
• 44:00
  Speaker 1: tended to sit on the speaker's left. And the people
• 44:03
  Speaker 1: who wanted less change sat on his right. So our
• 44:07
  Speaker 1: whole catalogue of left-right as political designations comes from the
• 44:12
  Speaker 1: physical configuration of this room.
• 44:14
  Speaker 2: I had no... Oh, wow, that's fascinating. I didn't actually
• 44:17
  Speaker 2: know that. Oh, wow. Okay. That's quite cool.
• 44:20
  Speaker 4: Yeah.
• 44:20
  Speaker 2: Okay. So, okay, let's turn to our sort of... I
• 44:23
  Speaker 2: wouldn't call it our hero of the story, but the assignat,
• 44:26
  Speaker 2: our protagonist, let's say. What were the arguments in the
• 44:31
  Speaker 2: National Assembly about that? What was the right or the left,
• 44:35
  Speaker 2: I guess, in this situation? What were they arguing to
• 44:39
  Speaker 2: do about them?
• 44:39
  Speaker 1: The right is arguing that we don't have... We don't
• 44:47
  Speaker 1: really have any property backing the Asinia because the Catholic
• 44:51
  Speaker 1: Church has not agreed to this arrangement. This is not
• 44:54
  Speaker 1: our property to have. And look at what happened in
• 44:59
  Speaker 1: the United States with the continental dollar. That failed right away.
• 45:04
  Speaker 1: We cannot be doing this. We are just going to
• 45:07
  Speaker 1: have to not reimburse the venal offices. We're going to
• 45:10
  Speaker 1: have to leave those people in post. That's basically the
• 45:14
  Speaker 1: argument on the right. The people on— The left are
• 45:18
  Speaker 1: saying the Asinia are backed by the most solid thing
• 45:24
  Speaker 1: there is, which is land. You can see it in
• 45:27
  Speaker 1: front of your face. And we can't continue the revolution
• 45:32
  Speaker 1: if we can't pay off these debts. Now, one thing
• 45:35
  Speaker 1: that's really interesting, because remember they said we will never
• 45:38
  Speaker 1: pronounce the infamous word bankruptcy. They have to find a
• 45:43
  Speaker 1: way to reimburse and pay for everything. So that's why
• 45:47
  Speaker 1: the debate drags on and on and on through August
• 45:51
  Speaker 1: and September, which are hot months. They have lots of
• 45:56
  Speaker 1: other work to do, but it just keeps coming back
• 45:59
  Speaker 1: to this. At one point, the Abbe Mori, he sits
• 46:03
  Speaker 1: on the right. He's a very conservative member of the clergy.
• 46:07
  Speaker 1: He's rumored to carry a pistol under his vestments. He
• 46:12
  Speaker 1: suggests that the way to resolve this is that he
• 46:15
  Speaker 1: and the former Comte de Mirabeau, the leading speaker for
• 46:21
  Speaker 1: the revolution on the left, should fight a duel to
• 46:24
  Speaker 1: resolve the issue. There had been other duels fought in
• 46:28
  Speaker 1: the assembly, actually.
• 46:30
  Speaker 2: They don't.
• 46:32
  Speaker 1: But instead they just keep popping up to interrupt each other.
• 46:35
  Speaker 1: And by the end of the fourth week of debate,
• 46:38
  Speaker 1: there are actually 17 different motions on the floor. It's
• 46:42
  Speaker 1: been declared we are going to vote today, but nobody
• 46:46
  Speaker 1: even really knows what they're voting on.
• 46:48
  Speaker 2: Yeah, I mean, it does not sound like a recipe
• 46:50
  Speaker 2: for harmony. I mean, I've spent many summers in Paris.
• 46:53
  Speaker 2: It gets quite warm and sticky. And if you're all
• 46:57
  Speaker 2: inside an indoor stable room, shouting at each other for
• 47:01
  Speaker 2: days and weeks on end over important stuff. I can see,
• 47:05
  Speaker 2: and not the national stereotype, but the French do love
• 47:08
  Speaker 2: a heated debate after all as well. You can see
• 47:11
  Speaker 2: how this gets quite tense. Maybe that duel would have
• 47:14
  Speaker 2: been a good way of solving this. I'm curious, was
• 47:19
  Speaker 2: this some insistence on not declaring bankruptcy or not defaulting
• 47:23
  Speaker 2: on any of these state debts or from the old regime,
• 47:27
  Speaker 2: though it wasn't obviously called the old regime yet. Was
• 47:30
  Speaker 2: that because this National Assembly still actually had a lot
• 47:34
  Speaker 2: of fairly middle class or upper middle class people that
• 47:37
  Speaker 2: were creditors of this?
• 47:39
  Speaker 1: Yes. I mean, they have a personal interest in making
• 47:43
  Speaker 1: sure The government does not declare bankruptcy. Either they or
• 47:46
  Speaker 1: their families have purchased venal offices. Others are definitely creditors
• 47:52
  Speaker 1: of the government. But they also do see it as
• 47:55
  Speaker 1: a moral issue. They want to do the honourable thing.
• 47:59
  Speaker 1: And the honourable thing is to pay your debts.
• 48:03
  Speaker 2: Well, the stakes of this National Assembly debate about what
• 48:07
  Speaker 2: to do with the assignats is clearly reaching a very,
• 48:11
  Speaker 2: very high. heated moment in the summer of 1790. It's
• 48:16
  Speaker 2: even leading to threats of jewels on the floor. But
• 48:21
  Speaker 2: how does it all pan out? What happens to France's
• 48:24
  Speaker 2: money during the rest of the revolution? Well, we'll have
• 48:27
  Speaker 2: to tackle that in next week's episode. Rebecca, thank you
• 48:31
  Speaker 2: so much for being here with us this week. That's
• 48:34
  Speaker 2: sadly it for this week's episode of The Story of Money.
• 48:38
  Speaker 2: But before we wrap it up, I just have one
• 48:41
  Speaker 2: quick favour to ask you. We recently found out that
• 48:44
  Speaker 2: our show was nominated for a Signal Award. Yay! It's
• 48:48
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• 48:51
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• 48:56
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• 49:04
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• 49:07
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• 49:09
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• 49:12
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• 49:16
  Speaker 2: We'll see you again next week.