The franc (sign: ₣, commonly also FF or F) was a currency of France. Along with theSpanish peseta, it was also a de facto currency used in Andorra (which had no national currency with legal tender). Between 1360 and 1641, it was the name of coins worth 1 livre tournois and it remained in common parlance as a term for this amount of money. It was re-introduced (in decimal form) in 1795 and remained the national currency until the introduction of the euro in 1999 (for accounting purposes) and 2002 (coins and banknotes). It was a commonly held international reserve currency in the 19th and 20th centuries.
History
[edit]Before the French Revolution
The franc was introduced by King John II in 1360. Its name comes from the inscription,Johannes Dei Gratia Francorum Rex ("John by the grace of God King of the Franks"), and its value was set as one livre tournois (a money of account). Francs were later minted underCharles V, Henry III and Henri IV.
Louis XIII of France stopped minting the franc in 1641 (replacing it with the Écu and Louis d'Or), but use of the name "franc" continued in accounting as a synonym for the livre tournois.
[edit]French Revolution
The decimal "franc" was established as the national currency by the French Revolutionary Convention in 1795 as a decimal unit (1 franc = 10 decimes = 100 centimes) of 4.5 g of fine silver. This was slightly less than the livre of 4.505 g but the franc was set in 1796 at 1.0125 livres (1 livre, 3 deniers), reflecting in part the past minting of sub-standard coins.
However, the circulation of this metallic currency declined during the Republic, which exchanged the old gold and silver reserves (needed to finance wars and try to solve the shortage of food supplies by importing them) against printed assignats, initially designed as bonds based on the value of the confiscated goods of churches, but later declared as legal tender currency.
Too many assignats were put in circulation (by largely overvaluing the value of the "national properties"), and the silver franc rarefied to pay foreign providers, and the unpaid governmental national debt caused decreasing trust in this secondary unit, shortage of silver supplies for producing metallized francs, hyperinflation, even more food riots in the population, and severe political instability and termination of the First French Republic (the political fall of the French Convention, the economic failure of the Directoire that replaced it, then a coup d'état that lead to the Consulate during which only the first Consul progressively gained all the legislative powers against the other unstable and discredited consultative or legislative institutions).
[edit]French Empire and Restoration
In 1803, the "germinal franc" (named after the month Germinal in the revolutionary calendar) was established, creating a gold franc containing 290.32 mg of fine gold. From this point, gold and silver-based units circulated interchangeably on the basis of a 1:15.5 ratio between the values of the two metals (bimetallism). This system continued until 1864, when all silver coins except the 5 franc piece were debased from 90% to 83.5% silver without the weights changing.
The currency was retained during the Bourbon Restoration.
[edit]Latin Monetary Union
France was a founding member of the Latin Monetary Union (LMU) in 1865. The common currency was based on the franc germinal, with the name franc already being used in Switzerland and Belgium, whilst other countries used their own names for the currency. In 1873, the LMU went over to a purely gold standard of 1 franc = 0.290322581 g gold.
[edit]World War I
The outbreak of World War I caused France to leave the gold standard of the LMU. The war severely undermined the franc's strength, as war expenditure, inflation and postwar reconstruction, financed partly through the printing of ever more money, reduced the franc's purchasing power by 70% from 1915 to 1920 and a further 43% from 1922 to 1926. After a brief return to the gold standard (1928 to 1936) the currency was allowed to resume its slide, until it was worth in 1959 less than a fortieth of its 1934 value.
[edit]World War II
During the occupation of France, the franc was a satellite currency of the German Reichsmark. The coins were changed, with the words Travail, Famille, Patrie (Work, Family, Fatherland) replacing the Republican triad Liberté, Égalité, Fraternité (Liberty, Equality, Fraternity) and the emblem of the Vichy regime added.
At the liberation, the US attempted to impose use of the US occupation franc, which was averted by General De Gaulle.
[edit]Post-War period
After World War II, France devalued its currency within the Bretton Woods system on several occasions. Beginning in 1945 at a rate of 480 francs to the British pound (119.1 to the U.S. dollar), by 1949 the rate was 980 to the pound (350 to the dollar). This was reduced further in 1957 and 1958, reaching 1382.3 to the pound (493.7 to the dollar, equivalent to 1 franc = 1.8 mg pure gold).
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