DEVALUATIONS AND THE FRENCH 'MINT BILLS'

France was the setting of one of the largest early experiments with paper money in Europe. This experiment usually refers to the paper money introduced in France by the Scottish economist and banker John Law in the mid-to-late 1710s. This was not the true introduction of paper money in France though. The country used paper money just before John Law, when France was engaged in the War of the Spanish Succession from 1701-1714. These were the billets de monnaie, or 'mint bills'.

Michel Chamillart

French public finances resorted to greater improvisation under the management of Michel Chamillart, who was finance minister starting from 1699. His tenure overlapped substantially with the War of the Spanish Succession, which started in 1701 by which point Chamillart had already also been made minister for war. Wars always tested the limits of governments and this one cost the French state about 100 million livres annually. A fiscal deficit of up to 80 million livres appeared, and this before considering debt service costs that were mounting as well.

Starting from 1702, Chamillart made greater use of the caisse des emprunts, a semi-public body that received control over certain tax revenues and used that money to make payments on short-term bonds it issued on behalf of the state. However, the issuance of bonds by the caisse des emprunts did not cover the full cost of the war. Other avenues for raising money were resorted to; for instance, the government created new offices by the thousands which they sold to officeholders to raise new money. More interestingly though, Michel Chamillart would introduce a paper money to France. He would also make use of currency devaluations to secure more seigniorage revenues for the state.

Precedent for Devaluations

France had utilized devaluation as a mean of raising money before the introduction of paper money by Chamillart. The value of the livre tournois was reduced in 1689 in response to capital flight from France by emigrating Huguenot bankers. In this devaluation, old coins were demonetized and stamped with a new value.

Even in the absence of paper money, devaluations were a source of revenue for the state. Upon a revaluation, people turned in coins of a certain value; they would in turn receive back from the mint the same nominal value in newly-stamped coins, each of a greater denomination, which meant they received back a smaller number of coins than they gave up, delivering the state a profit. Another devaluation along these lines took place in 1693.

 
Gold Louis d'Or of 1701, Stamp/Overstrike on Both Sides

Paper Money Introduced in 1701

After Chamillart took over French finances, there was yet another devaluation by restamping in 1701. During the old devaluations, people delivering their demonetized coins to the mint were given a receipt representing their right to new coins once they were stamped. This time, in advance of the stamping process, which took time, the state introduced billets de monnaie (mint bills). The bills were essentially an 'advance' received by the state on the expected profit from devaluation, a form of credit for the government. In theory, billets de monnaie should each be outstanding for a few days since re-stamping does not take long but, in practice, they remained outstanding for longer.

To read the complete article, see:
Devaluations and the French 'Mint Bills' (https://tontinecoffeehouse.com/2026/07/20/devaluations-and-the-french-mint-bills/)

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