NECKER had reached Bâle on his way back to Geneva when King Louis' messengers found him. He and his wife and daughter set out, next day, to return to Paris.
It was a triumphal march. Those French country folk whom this man had pillaged during years, and from whom he had snatched the reforms prepared for them by their King and his minister, Turgot, displayed an overflowing gratitude. The banker addressed to them, at every posthouse, pious words of exhortation. They responded by filling his carriage with flowers and his ears with praise. He drove direct to Versailles. Next day he made his entry into Paris and showed himself to the people from the balcony of the Hôtel de Ville. Madame de Staël swooned with joy.
A fortnight later the nobles who were members of the Assembly renounced their privileges in a sitting which was characterized by every sort of manifestation of hysteria, and the Feudal System was pronounced dead and buried. But these same nobles showed themselves reluctant to subscribe to a loan which Necker floated a few days later and to which, as a piece of window-dressing, he himself subscribed about £100,000.
The failure of the loan and the impossibility of collecting any taxes, after the abolition of the system of taxation, occasioned the banker grave anxiety. He addressed anxious letters to the Assembly informing its members that the Government was bankrupt and that it was impossible to pay the interests due on the loans. Nobody gave any attention to him; worse still, he convinced himself that the King was awaiting a favourable opportunity to leave Versailles and betake himself to some part of his realm farther removed from Paris and its mobs. He played again the card which, until now, had never failed to achieve success. It was suggested in the capital that the Assembly was once more forgetting its mission and that, in consequence, it would soon fall a victim to Royal tyranny. The King, the rumour ran, meant to go to Rouen and to summon the Parliament to follow him. Once he got safely away the chains would soon be fastened again on his people's necks.
Lafayette, who kept in touch with Madame de Staël, began to speak of going to Versailles and bringing King and Assembly back with him to Paris. The National Guard took up its General's cry. It was repeated in the streets, until the gutters resounded with it. When Paris learned that the Queen had presented herself at a banquet given by the officers of the Guard and had bidden the officers remove their tricolour cockades and wear again the Bourbon white, the tide of wrath apparently overflowed, for a mob of women, largely of the prostitute class, and all liberally supplied with wine, marched out to Versailles shouting like the mobs which had demonstrated against Turgot for bread, which, clearly they did not want. The King ordered his carriages; the people of Versailles, the same who had carried Necker shoulder high, refused to let them pass. After a hideous night, during the course of which the mob broke into the palace and threatened to murder the Queen, Louis and Marie Antoinette were compelled to accompany the women to Paris. Lafayette had marched out his National Guard with the avowed object of protecting the King; he offered no resistance to the mob's fury.
The Assembly followed the King; Versailles was deserted. The banker made sure now that his demands for money would be attended to. He was not mistaken. With the mob howling in the galleries the representatives of the People descended swiftly to earth. Madame de Staël's lover, Talleyrand, Bishop of Autun, having proposed that the nation should possess itself of the lands of the Church, these were immediately seized to serve as security for further borrowing. Necker had won. He had the King under lock and key in the old palace of the Tuileries; he had the Assembly held in living fear of the Parisian mob, which he alone could direct; and here was a rich harvest in the shape of the plunder of Mother Church ready for his honest reaping. He made haste to thrust in his sickle.
He urged that the Church lands should be made over to the bankers in exchange for a loan to the Government to be issued by the bankers, to be redeemable on a fixed date and to carry interest. Holders of the loan were to possess the right to change their paper for land. The bankers, in other words, were not disposed to trust the Government's bare word. Mirabeau criticized the project by asking why the Government should lend to itself and pay interest for so doing. Was not the land of France the property of the French people? Why pledge it to bankers in exchange for their paper? Let the Government pay its creditors in its own paper, giving these creditors the right to change the paper for land if they so desired. No interest would require to be paid on such paper, and redemption would lie with the holders of the paper, who could use it as money or turn it into land at their discretion. Is the land not there? Mirabeau asked. Is it not the good soil of the father-land? What better security can any man desire?
Necker's plan, in other words, was a fresh loan from the bankers secured on the Church lands. With the proceeds of this new loan the Government could pay its debts to Finance. The advantages, as the banker saw them, were a safe investment yielding a good rate of interest; the repayment of earlier and less well secured loans; above all, no possibility of an increase in the quantity of money in circulation which would have the effect of lowering the value of all investments. Mirabeau cared nothing for these ideas. He was out to serve France, not international finance. He saw in Necker's scheme chains for Government and people. The interest payments on Necker's new loan would prevent expenditure on the reforms which all, Louis XVI included, knew to be urgently necessary; they would place the Government in the position of hopeless debtor to the bankers, who would be free to invest their interests abroad, and thus further reduce the quantity of money in France. Finance, in short, would take the place of the Church as the largest landowner in the kingdom and so obtain, virtually, the sovereign power.
But the Assembly distrusted Mirabeau and feared Necker, who had the mob of Paris at his back. Necker's propagandists were shouting the word inflation from the housetops and demanding why the wages of the poor should be paid in worthless paper." The Assembly, which was unskilled in money matters, was stampeded. With the bogey of inflation before its eyes, and the yelping pack of banker's scribes and orators at its heels, it voted for Necker's plan.
The banker experienced a great relief, for, in truth, the standing loans which he and his friends had made to the King were much too big and much too unsafe for his liking. Necker proceeded with the help of the Church lands to set his house in order. But he had reckoned without the French people. The new loan was an act of deflation because it enabled the Government to pay its debts without creating any fresh money, and so was the means of transferring a large block of purchasing power to the bankers. The effect was to increase the existing stringency and to cause hoarding of coin in anticipation of a crash. The bankers were trying to get their money out of France; notes no longer commanded any confidence. A money scarcity began.
"If Necker remains another month," Mirabeau cried, "there will not be an ecu in circulation in the country."
The situation grew desperate; commerce came to a standstill; the cities were threatened with famine because nobody would accept Necker's bank notes, and all the coin had disappeared. In these circumstances the demand that the Government should be allowed to pay its debts directly in the new landpaper was revived. Mirabeau took it up; the Assembly rallied to him. "This paper," he cried again, "is circulating land. What better security do you want ?" Necker's heart sank. He saw his loans being repaid in paper which would possess little or no international value, since its backing was the soil of Revolutionary France. He would no longer possess the least hold over the Government, for the Assignats, as the land notes were called, would bear no interest and be irredeemable in money. France's wealth would be attached to the soil, so to speak, and would no longer be available for transference to other lands offering higher rates of interest and better security. He protested, argued, threatened. Mirabeau tore him to pieces. The mob, obedient so long, went over to the enemy, and the banker sank under a tornado of execration. He fled from France and with difficulty gained his native Switzerland. Politics had conquered finance.
Mirabeau, almost alone among his contemporaries, understood what had happened. Necker, as he saw, had fallen victim to his own plotting. He had shaken so successfully the confidence of the French people in their King that the King's credit was no longer good. There was the explanation of the hoarding of coin and the refusal to give goods for paper. Recovery depended, therefore, on a restoration of the King to his people's affection and respect. If that could be achieved, the new land-paper would circulate freely because faith in it would be established. Louis would then possess the means of getting rid of his debt and of giving effect to all his projects of reform.
Mirabeau set himself to accomplish for the King what the King could not, by any means, achieve for himself. He constituted himself the Royal mentor, and wrote letter after letter explaining his policy. The King was to assume his rightful place as the leader of the Revolution; the Revolution was to be shown in its true character as a restoration of the God-system of service. The tribune himself wooed and won the Paris mob, charming it by his eloquence. He exalted the Monarchy as the lively foundation of government and urged, again and again, that King and Nation were necessary to one another, so that if they became separated, catastrophe in the shape of the rule of force and fear must follow.
The Assembly heard this doctrine with patience if not with pleasure. Nobody, as yet, dreamed of abolishing the monarchy, but many people hoped to rule it. Mirabeau advised the King to leave Paris openly, go to Rouen or Compiégne and summon his Parliament to follow him, on the ground that the state of feeling in Paris made calm deliberation impossible. For a short time it seemed that Louis might follow this advice. The King has been blamed severely for not following it. But it may very well be that he was right in thinking that the estrangement from his people, which Necker had brought about, was of such a character that action in accordance with Mirabeau's advice would have been the signal for civil war. The opportunity, if it was an opportunity, passed quickly. Mirabeau died. Louis with his wife and children tried to leave France, was arrested at the frontier, and became the prisoner of his Government.
It was a Liberal Government, under the influence of Madame de Staël, Necker's daughter. Its object was to restore sound finance by a discreet use of the Royal authority. Madame de Staël's lover, Louis de Narbonne, was Minister of War. With her help he planned a campaign against Austria and compelled the King to fall in with his plans. The land-paper money fell sharply in value, and Necker in Geneva began to anticipate the time when, the paper having become hopelessly debased, it would be necessary to appeal once more to high finance. The war proved disastrous; the German armies under the Duke of Brunswick advanced on Paris. A panic-stricken mob attacked the palace, broke through the King's defenses, and murdered his guard. The Royal Family was shut up in the Temple prison. Less than a month later, when Brunswick was only a few days' march from the capital, a system of organized massacre revealed the fact that power had passed into new hands. The party of Madame de Staël was swept away; in its place appeared the Republican party with an admixture of Radicals including Danton. Danton recruited a new army and drove back the invaders. The Assignat (land-paper money) appreciated sharply in value, so much so that the Government felt itself free of financial embarrassment. It was believed everywhere that the Revolution had reached its climax and that a stable Republic would be established. The policy of terror was relaxed and its alleged authors who showed anxiety to disavow their activities fell into disgrace.
Immediately, the Assignat began to depreciate again. Farmers looked doubtfully at the notes they had been eager to accept only a few weeks earlier, and hoarding of wheat and other foodstuffs caused prices to rise sharply. What had happened? The earnest Republicans (called the Girondins) who were in control of government could not supply an answer. The enemy threatened no longer; the King was safely under lock and key; priests, nobles, and bankers had been driven beyond the frontiers. France had glory, security, the wealth of her matchless soil. Why then this strange lack of confidence?
Mirabeau could have supplied the answer namely, that France was no longer a nation, but merely an agglomeration of factions not greatly different from the factions of the barons. Department was in arms against department, province against province, city against city. So much so, indeed, that the Government was making plans to introduce a form of federal-ism under the pretext of strengthening local authorities. The grievances of Lyons, of Bordeaux, of Marseilles, of Toulon, of La Vendée, bulked larger in many minds than the afflictions of France. All these places had their rights. Having determined the Rights of Man in general, the Government was busy determining also the rights of this man and that. Duty was a word tarnished for want of use. In these circumstances, since confidence is inspired only by service, a universal want of confidence was inevitable. What Necker had destroyed was not merely faith in the Throne, but faith in the purpose of life of which the Throne was the expression. By preventing the King from abolishing privilege, he had robbed him of the exercise of his office and with him all his subjects. Lacking the sense of divinely imposed duty, men remembered their grievances, nursed their wrongs, and reverted to the use of force. They were ready no longer to sacrifice themselves. That readiness, in the last issue, is the foundation of credit, whether financial or other.
The Republicans, in their bewilderment, had glimpses of this truth. They tried to substitute for the King's authority what they called the sovereignty of the People. God, it was declared, had bestowed His Grace on the Nation, so that each citizen might render service to his fellows in the double capacity of sovereign and subject. Unhappily for this doctrine, the discovery was soon made that there are as many Peoples as there are parties in the State. If the Republicans claimed to represent the People, and so to exert a natural sovereignty, exactly the same claim was made by the Radicals. It was a competition for power in which success chiefly depended on efficient organization and a plentiful supply of money. The People in other words, had to be coaxed or bribed or terrified into giving their support. Such a state of affairs possesses nothing in common with responsible nationalism; it is essentially self-seeking and mercenary. Its foundation is not God but brute force and greed.
The fall in the value of the Assignat, therefore, was a true reflection of the political and moral situation. Credit-money, as has been said, depends on the character and security of the people by whom it is issued. Both character and security were suffering deterioration by reason of the substitution of the idea of benefit for the ideal of service. The farmer, for example, no longer felt it incumbent on him to feed the towns. As he did not like the look of the Assignats he planted less and took his ease. When appeals were addressed to him to play a citizen's part, he retorted by asking if liberty did not belong to him. Prices rose and the mob of Paris grew threatening. Was this the Sovereign People? The leaders of the mob, Danton and his friends, removed any doubt on the matter by demanding that the tyrant Louis XVI should be brought to trial.
The Republicans began to lose their nerve. Action against the King, as they now saw, could have no other effect than a further shaking of confidence and credit. The value of the Assignat would fall; the hoarding of foodstuffs would increase and the cities, in all probability, would starve. What would happen then no man could tell. The Government, therefore, tried to prevent the King's trial. Instantly they were accused of treachery. The names which, under Necker's guiding hand, they had flung at King, priests, and nobles were flung at them. It was asserted by Robespierre at a later period, that Danton, who led the attack on the Republicans, was in the pay of foreign banking houses. It is certain that he served their ends. The King's trial effected a further fall in the purchasing power of the Assignat; his execution continued the process. The Government passed from anxiety to despair. Their money was ceasing to command confidence and they had a great European war on their hands. So evil did their plight seem that revolt against their authority was everywhere stimulated. Both Lyon and Marseilles declared for the King's son, Louis XVII. The inhabitants of Toulon handed that great naval base over to the English. Metz fell and German and Spanish armies crossed the frontiers. Famine threatened the capital.
Danton led his mob against the Republicans and they were swept away to prison. He took their place, but failed utterly to restore authority or attract food to the cities. It seemed that France must infallibly succumb to her enemies both foreign and financial. This was the opinion of these enemies. Necker, for example, felt that the time was at hand when a Regency under Marie Antoinette must be instituted, and urged his daughter, who was with Narbonne in England, to rejoin her husband at the Swedish Embassy in Paris. Danton, the ferocious, began to use mild language and to talk of bringing the Revolution back into peaceful courses.
Suddenly the accusation that he was in English pay began to be whispered. Why, it was asked, had he attacked so persistently French policy in India and elsewhere if not because the English financial houses with interests in India had bribed him? A wave of panic swept the Parliament, and within a few weeks of his victory over the Republicans Danton himself was gently, it is true, removed from power. Robespierre and Carnot replaced him.
They were a strange couple, Robespierre small, fragile, rather timid; Carnot big, burly, with a plentiful self-assurance. The odds were against agreement between these two; perhaps, even, against toleration of the one by the other. Certainly they did not like each other. But they loved France. The idea that France should yield to her enemies, or ask succour of them, was hateful to both. Carnot undertook the conduct of the war without, Robespierre that of the war within.
Robespierre was reputed a mild little man. He had earlier in his career relinquished a legal appointment held by him in the town of Arras because it entailed the duty of signing the death warrants of criminals. That was in keeping with his record as the best boy at the Jesuit school at which he had been educated and at which, because of his merit, he had been chosen to deliver the address of welcome to Louis XVI when the King visited the school. He set himself, with conscientious thoroughness, to discover ways of pulling France together and averting the threatened famine. Within a few weeks he discovered that the accustomed means to that end had been destroyed. There was no longer in the land any discipline, religious, moral, or political. Loyalty had perished with the King; glory possessed so little attraction that desertions had seriously reduced the strength of the army; even patriotism had grown cold, so that the majority of Frenchmen despaired of the State. What force remained whereby men's allegiance might be bound and their service compelled? Robespierre glanced at the empty throne; he must find a substitute for that excellent power by which the tribes of France had been wrought into the French nation, and men held in duty to God. He was a party leader. Only force remained to him.
He set up the guillotine and, instead of the ministry of the King's grace, proclaimed a new ministry of fear. First the Republicans, then the Queen, were hurried to the scaffold. They were followed by a great crowd of persons accused and persons suspected. Lyon, Bordeaux, and Marseilles were brought to submission. Thanks to the genius of an officer of artillery, named Napoleon Bonaparte, the British and Spanish fleets were driven from Toulon harbour and the town retaken. The foreign armies were driven across the Rhine, the Alps, and the Pyrenees. Robespierre sent his agents into the disaffected districts. They brought with them their red guillotines, their firing parties, and their executioners, until France sickened with the horror of it all. But the cities were fed and the armies disciplined. The name of France grew terrible again in Europe, and the Assignat rose in purchasing power so sharply that this paper money was taken gladly throughout the length and breadth of the land.
The guillotine, then, was an efficient substitute for the throne. Fear could achieve some of the results which loyalty had achieved. It could whip opponents into submission; it could compel service and impose silence. In these respects it resembled God's grace more nearly than ambition or glory or greed. But the resemblance ended there. Even Robespierre knew that fear could not be continued indefinitely. He began, in the spring of 1794, to speak of milder measures, and marked the expressions of joy which greeted these hints. He sent the worst of the butchers, who had — so he said — exceeded his orders, to the guillotine.
Danton tried to come back on the wave of moderation. Instantly Robespierre recoiled. Was the alternative to fear the rule of greed and corruption? He accused Danton of treachery, of taking foreign pay, of robbery of the People. Danton also ascended the guillotine. The Reign of Terror began. It marks the madness of Robespierre, for it proceeded from the idea that fear, often enough renewed, can beget love. He called it the purge of virtue, suggesting that it was the terror to end terror. It grew fiercer from day to day. And from day to day the paper money appreciated in value and the power of the French arms increased. Robespierre passed from politics to ecstasy. His grace of fear assumed, in his mind, a mystic quality. He began to see himself as the Scourge of God. He ordered a solemn festival in which France, under his leadership, should acknowledge The Supreme Being. The Palace of the Tuileries looked down gloomily on a small figure in a sky blue coat and nankeen breeches, with powdered hair and prim, beautifully laundered cravat, calling upon God to bless the guillotine's office.
That was a figure of dread as well as a figure of mockery. Robespierre had achieved mightily for France. He had saved her from invasion, from civil war. He could not save her from himself. His acknowledgment of God, indeed, was a gesture of despair. By it, he confessed that above fear there his love, above force there is loyalty, above Man there is God. What he had accomplished horribly, by the slaughter of thousands of victims, Kingship, during centuries, had achieved without violence.
As he preached and prayed, there were gathered round him men, once the creatures of his will, who had resolved already on his ruin. Like him, they reeked of innocent blood; unlike him, they were corrupt, the agents of the wolves and vultures of finance. Because there is a term set to fear, these fellows triumphed. Robespierre was flung under the knife. This man who had possessed all the riches of France, who had known no woman, who had tasted no wine, left behind him as the sum of his worldly goods a small shelf of books and an Assignat to the value of five francs.
On the morrow of Robespierre's execution the Assignat began to depreciate in value. Its fall now was swift and catastrophic, for the new rulers, the vicomte de Barras and his crew, dared not employ fear, and possessed no other means of commanding obedience. France would certainly have perished by invasion but for the discipline imported into the armies during the reign of Robespierre. These armies of the Revolution, therefore, were the inheritors of the guillotine. Could the sword maintain what the ax had failed to maintain?
The Government was not concerned to answer this question. So long as they were able to hold the foreign armies in check, they felt confident of being able to maintain themselves in power, if only because the Parisians were weary of violence. Barras was hopelessly corrupt and so were his associates. They looked upon office primarily as a means of getting rich and buying pleasure.
This attitude spread to all sections of the community. Service was put away, except in the armies; greed was exalted into the chief end of man. Rights were insisted upon. Confidence naturally and inevitably declined. People did not like the look of those in authority, and so fought shy of money the basis of which, as they believed, was the character of their rulers. The value of the Assignats fell from thirty per cent. in January 1795—six months after Robespierre's death—to twenty per cent. in April 1795, and to one per cent in November 1795. These figures display one of the differences between a nation and an agglomeration of factions.
It must not be supposed, however, that the fell of the Assignat was due solely to lack of confidence. It was too quick, too catastrophic for that, for the paper, after all, retained the land security, and France had triumphed so signally in the field that all the European Powers were ready to make peace with her. What was it, then, apart from the bad character of the new rulers, that destroyed within a few months a paper money on which fourteen armies had been supported and by means of which France bad been preserved from ruin ?