Emergency currency of the French Republic during World War I

Châu Ngọc Đức, Vietnam Numismatics #2 (01-2018), p.49-51

At the beginning of World War I, France faced a serious shortage of metals for making weapons and could face the risk of high inflation. When the war broke out, France suspended the circulation of silver and gold coins and treasury notes in order to preserve its gold reserves. As inflation increased, the French treasury had accumulated a large amount of gold and silver, while copper coins were diverted to be melted down for making weapons for the war. The shortage of coins caused difficulties in everyday transactions because there was no small change in circulation, while the war machine urgently needed money to support the defense of France. An idea emerged: to raise funds from the public by issuing interest-free bonds. These bonds had a fixed term, and people bought them at a price lower than their face value (at a discount) and were repaid the full face value when they matured.

In August 1914, the Paris Chamber of Commerce was authorized and requested by the French Central Bank to issue bearer bonds with denominations of 0.25 franc, 0.5 franc, 1 franc, and 2 francs. These notes were accepted by the public and began to be used in circulation.

Shortly after, Chambers of Commerce in other cities across France adopted the same system as Paris and issued bonds for holders to use locally. They spread throughout France, including even distant colonies.

Most emergency money bore the words "Chambre de Commerce" and the name of the issuing city. They were quite small in size, similar to the German and Austrian Notgeld, but with much higher artistic quality. In particular, they were officially issued, so the banks had full control over the quantity in circulation, unlike the uncontrolled Notgeld issued in Germany and Austria.

The emergency currency system circulated for five years during the war. Over time, problems began to arise. These bonds increasingly functioned like regular money and were used beyond their local issuing cities. At the same time, it was difficult to replace them with normal money, since they were issued as time-limited bonds. In 1921, they were withdrawn and replaced by aluminum bronze coins known as Commerce Industrie (also called Jetons). These coins had denominations of 0.5, 1, and 2 francs. They were issued under the unified name "Chambres de Commerce de France" and circulated to standardize France's monetary system.