Andrew Dickson White - Fiat Inflation in France - 1896 - Skull&Bones

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Although this a reprint from 1933, it was first published in 1896. Prior to the formation of the Federal Reserve, the bankers were trying to see how a fiat system could be controlled and what the effects could be. They're go to guy was Andrew White.

As an original Bonesman they felt he could give them the most scholarly insight.  This was the book that formed the FEDRES system and created the system of perpetual inflation in America

http://mises.org/books/inflationinfrance.pdf


FIATMONEY INFLATION IN FRANCE
How It Came, What It Brought, and How It Ended
ANDREW DIGESON WHITE, LL.D., Ph.D., D.G.L.
Late President and Professor of History at Cornell University;
Sometime United States Minister to Russia and Ambassador to Germany; Author of "A History of the Warfare of Science with Theology,'' etc.

FOREWORD BY MR. JOHN MACKAY
I am greatly indebted to the generosity of Mr. Andrew D. White, the distinguished American scholar, author and diplomatist, for permission to print and to circulate privately a small edition of his exceedingly valuable account of the great currency-making experiment of the French
Revolutionary Government.

From among an almost infinite variety, there are four great and fundamental facts that clearly emerge, namely,—

1) Notwithstanding the fact that the paper currency issued was the direct obligation of the State, that much of it was interest bearing, and that all of it was secured upon the finest real estate in France, and that penalties in the way of fines, imprisonments and death were enacted from time to time to maintain its circulation at fixed values, there was a steady depreciation in value until it reached zero point and culminated in repudiation.

(2) In the attempt to maintain fixed values for the paper currency the Government became involved in an equally futile attempt to maintain a tariff of legal prices for commodities ...

(3) An wholesale demoralisation of society took place under which thrift, integrity, humanity, and every principle of morality were thrown into the welter of seething chaos and cruelty.

(4) The real estate upon which the paper currency was secured represented confiscations by the State of the lands of the Church and of the Emigrant Noblemen.

.....

And finally, as to the general development of the theory and practice which all this history records: my subject has been Fiat Money in France; How it came; What it brought; and How it ended.

It came by seeking a remedy for a comparatively small evil in an evil infinitely more dangerous. To cure a disease temporary in its character, a corrosive poison was administered, which ate out the vitals of French prosperity.
It progressed according to a law in social physics which we may call the "law of accelerating issue and depreciation." It was comparatively easy to refrain from the first issue; it was exceedingly difficult to refrain from the second; to refrain from the third and those following was practically
impossible.

It brought, as we have seen, commerce and manufactures, the mercantile interest, the agricultural interest, to ruin.
It brought on these the same destruction which would come to a Hollander opening the dykes of the sea to irrigate his garden in a dry summer.
It ended in the complete financial, moral and political prostration of France—a prostration from which only a Napoleon could raise it.

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In Addition here is another portion that seems to relate to today:

All thoughtful men had lost confidence.
All men were waiting; stagnation became worse and worse. At last came the collapse and then a return, by a fearful shock, to a state of things which presented something like certainty of remuneration to capital and labor.

Then, and not till then, came the beginning of a new era of prosperity. Just as dependent on the law of cause and effect was the moral development. Out of the inflation of prices grew a speculating class; and, in the complete uncertainty as to the future, all business became a game of chance, and all business men, gamblers. In city centers came a quick growth of stock-jobbers and speculators; and these set a debasing fashion in business which spread to the remotest parts of the country. Instead of satisfaction with legitimate profits,
came a passion for inordinate gains. Then, too, as values became more and more uncertain, there was no longer any motive for care or economy, but every motive for immediate expenditure and present enjoyment.

So came upon the nation the obliteration of thrift. In this mania for yielding to present enjoyment rather than providing for future comfort were the seeds of new growths of wretchedness: luxury, senseless and extravagant, set in: this, too, spread as a fashion.

To feed it, there came cheatery in the nation at large and corruption among officials and persons holding trusts. While men set such fashions in private and official business, women set fashions of extravagance in dress and living that added to the incentives to corruption. Faith in moral considerations, or even in good impulses, yielded to general distrust. National honor was thought a fiction cherished  only by hypocrites. Patriotism was eaten out by cynicism.

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From the stock-gambler who sat in the Assembly to the small land speculator in the rural districts; from the sleek inventor of canards on the Paris Exchange to the lying stock-jobber in the market town, all pressed vigorously for new issues of paper; all were apparently able to demonstrate to the people that in new issues of paper lay the only chance for national prosperity.

This great debtor class, relying on the multitude who could be approached by superficial arguments, soon gained control. Strange as it might seem to those who have not watched the same causes at work at a previous period in France and at various times in other countries, while every issue of paper money really made matters worse, a superstition gained ground among the people at large that, if only enough paper money were issued and were more cunningly handled the poor would be made rich.

Henceforth all opposition was futile. In December, 1791, a report was made in the Legislative Assembly in favor of yet another great issue of three hundred millions more of paper money. In regard to this report Cambon said that more money was needed but asked, "Will you, in a moment when stock-jobbing is carried on with such fury, give it new power by adding so much more to the circulation?" But such high considerations were now little regarded. Dorisy declared, "There is not enough money yet in circulation; if there were more the sales of national lands would be more rapid." And the official report of his speech states that these words were applauded.
....

The evils which we have already seen arising from the earlier issues were now aggravated; but the most curious thing evolved out of all this chaos was a new system of political economy.

In speeches, newspapers and pamphlets about this time, we begin to find it declared that, after all, a depreciated currency is a blessing; that gold and silver form an unsatisfactory standard for measuring values
...
No more striking example can be seen of the truth uttered by Daniel Webster, that "of all the contrivances for cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper-money." *

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Daniel Webster, who attempted to revive Lincoln Nationalist policies with a Third National Bank;

Daniel Webster
Daniel Webster (January 18, 1782 – October 24, 1852) was a leading American statesman during the nation's Antebellum Period. He first rose to regional prominence through his defense of New England shipping interests. His increasingly nationalistic views and the effectiveness with which he articulated them led Webster to become one of the most famous orators and influential Whig leaders of the Second Party System...

As with Henry Clay, Webster's desire to see the Union preserved and conflict averted led him to search out compromises designed to stave off the sectionalism that threatened war between the North and South. Webster tried three times to achieve the Presidency; all three bids failed, the final one in part because of his compromises. Similarly, Webster's efforts to steer the nation away from civil war toward a definite peace ultimately proved futile. Despite this, Webster came to be esteemed for these efforts and was officially named by the U.S. Senate in 1957 as one of its five most outstanding members.[3]