French Canada saved from destitution in 1685?

[Libertarian_Guard]

First time I've come by this. Is it true or BS?

An earlier example of debt-free currency that is unlikely to be known even among most monetary reformers is the manner by which French Canada was saved from destitution in 1685.

French Canada (Quebec) was dependent on an annual remittance from Paris. In 1685 King Louis XIV, with his wars and his extravagance, failed to provide French Canada with its financial sustenance. Fortunately the ‘Intendant’ of the Province, M. de Meulle, had not been blessed with an education into the necessities of orthodox economics as it then was and remains today; of such panaceas as ‘balancing the budget’, ‘belt tightening’, or increasing taxes. Simple man as he obviously was, he apparently did not understand that money and credit are only supposed to appear when loaned into circulation as a usurious debt. So instead of disbanding his troops, whom he could not pay, and making redundancies in his public service, thereby obliging employers to lay off workers due to the lack of purchasing power, de Meulle thought that since money was not available from France he would simply make his own.

Without even a printing press to produce a currency, he called in all the decks of playing cards that could be gathered, and cut them into quarters. On these he wrote the value that each was to represent, gained public confidence in their efficacy as legal tender by giving them his personal guarantee, and spent them into circulation.

While the Mother Country was broke and in such debt as to be a major precipitant of the Revolution a century later, French Canada maintained itself. M. de Meulle reported to the Minister in Paris:

My Lord – I have found myself this year in great straits with regard to the subsistence of the soldiers. You did not provide for funds, My Lord, until January last. I have, notwithstanding, kept them in provisions until September, which makes eight full months. I have drawn from my own funds and from those of my friends, all I have been able to get, but at last finding them without means to render me further assistance, and not knowing to what saint to pay my vows, money being extremely scarce, having distributed considerable sums on every side for the pay of the soldiers, it occurred to me to issue, instead of money, notes on [playing] cards, which I have had cut in quarters. I send you My Lord, the three kinds, one is for four francs, another for forty sols, and the third for fifteen sols, because with these three kinds, I was able to make their exact pay for one month. I have issued an ordinance by which I have obliged all the inhabitants to receive this money in payments, and to give it circulation, at the same time pledging myself, in my own name, to redeem the said notes. No person has refused them, and so good has been the effect that by this means the troops have lived as usual. There were some merchants who, privately, had offered me money at the local rate on condition that I would repay them in money at the local rate in France, to which I could not consent as the King would have lost a third; that is, for 10,000 he would have paid 40,000 livres; thus personally, by my credit and by my management, I have saved His Majesty 13,000 livres. de Meulle, Quebec, 24th September, 1685[vii]

Six years later there was another shortage of money, and again the playing card currency was issued. According to Sir Ralph Norman Angell, Nobel Laureate and British Member of Parliament, the currency became ‘exceedingly popular and remained current during the whole of the remainder of that century and the first half of the next’.[viii] As late as 1749 ordinances were passed in French Canada increasing the issue to a million livres. A. N. Field, a very well-know expert on monetary reform in New Zealand during the Depression era, and a Rightist of radical temperament, commented:

What M. de Meulle did was a very simple thing. At the same time it was a very profound thing. M. de Meulle probably never considered that there was anything very profound about it. It was just an obvious, commonsense step; and it was the right step. Money is merely a ticket entitling the bearer to goods and services, and it matters little whether it is made of gold or cut out playing cards.

http://altright-archive.net/author/kbolton/

[palani]

Money is merely a ticket entitling the bearer to goods and services, and it matters little whether it is made of gold or cut out playing cards.

Of course this is true when you have no intention of ever complaining about the goods or services you receive in a court of law. When you pay in fiction though you lose the ability to enforce your agreement because unless some substance is involved you have given nothing in the exchange.

The common law form of substance is 'one dollar and other valuable considerations' or 'one dollar love and affection'. There is not any need for the entire transaction to be in specie. To satisfy the consideration element in a court of law only one dollar of substance need be involved. The rest may be corn husks or even marked playing cards.

[Libertarian_Guard]

A break occurred in 1685. The annual boat that brought goods (including a load of metallic coins) from France usually came in the Summer, but this year he only reached Canada in January. The coins were meant to pay the troops, and thus the soldiers had waited for 8 months ! The Governor, having tried everything possible, like feeding the soldiers on credit, letting them work for peasants...) decided to requisition all decks of playing cards in the colony. He then had each card cut in quarters, wrote a monetary value on each, signed and stamped them. Then he let it be known that these cards had to be accepted in payment for anything that was for sale in the colony, without any raise in prices. The soldiers were paid with these cards, and the merchants wily-nilly accepted. When the boat arrived each and every card was exchanged at par against metallic coins in a week.This was an emergency solution, and had worked fine. All the card were destroyed after the conversion, and life returned to normal.


But the problem was recurrent, and soon the story began all over again, and repeated itself year after year, notwithstanding the "strong disapproval" of the King. Sometimes paper was used instead of playing cards (which had become hard to find), and this system could have given Canada an efficient monetary system, were it not for the excessive emissions. After 1690, the card emission had become annual. Around 1706 the exchange of cards against coins was already random, the King being less generous with this colony that brought him so little. Several years of arrears grew, and cards exchanged at a third of their nominal value, when merchants accepted them altogether ! Emissions multiplied, leading to a 400% inflation in 1713. After several unsuccessful attempts to convert the outstanding cards in real values, the governor almost stopped the emissions of new cards. French Canada began to suffocate by lack of money (as a mean of exchange, not as standing for resources). People tried to cope with credit, bills of exchange and other IOU's. In fact money was so badly needed that in 1729 merchants sent a petition to the king to reintroduce the playing card money. He accepted and the cycle began again, leading to strong inflation and ultimately loss of trust in paper money, especially in 1755 during the 7 years war against the English. Inflation and fear of repudiation of any form of paper money became chronic. Peasants refused to sell their goods for anything other than metallic coins, shopkeepers raised their prices every week. Metallic coins still disappeared, as people hoarded them to protect them from requisition from the government who needed them to buy grain.The playing card money was over.


http://www.micheloud.com/FXM/MH/canada.htm