Before the French Revolution
The first franc was a gold coin introduced in 1360 to pay the Ransom of King John II of France. This coin secured the king's freedom and showed him on a richly decorated horse earning it the name franc à cheval (meaning "free on horse" in French). The obverse legend, like other French coins, gives the king’s title as Francorum Rex ("King of the Franks" in Latin) and provides another reason to call the coin a franc. Its value was set as one livre tournois (a money of account). John’s son, Charles V, continued this type. It was copied exactly at Brabant and Cambrai and, with the arms on the horse cloth changed, at Flanders. Conquests led by Joan of Arc allowed Charles VII to return to sound coinage and he revived the franc à cheval. John II, however, was not able to strike enough francs to pay his ransom and he voluntarily returned to English captivity.
John II died as a prisoner in England and his son, Charles V was left to pick up the pieces. And so he did. Charles V pursued a policy of reform, including stable coinage. An edict dated 20 April 1365 established the centerpiece of this policy, a gold coin officially called the denier d’or aux fleurs de lis which had a standing figure of the king on its obverse. Its value in money of account was one livre tournois, just like the franc à cheval, and this coin is universally known as a franc à pied. In accordance with the theories of the mathematician, economist and royal advisor Nicolas Oresme, Charles struck fewer coins of better gold than his predecessors. In the accompanying deflation both prices and wages fell, but wages fell faster and debtors had to settle up in better money than they had borrowed. The Mayor of Paris, Étienne Marcel, exploited their discontent to lead a revolt which forced Charles V out of the city. The franc fared better. It became associated with money stable at one livre tournois
Henry III exploited the association of the franc as sound money worth one livre tournois when he sought to stabilize French currency in 1577. By this time, inflows of gold and silver from Spanish America had caused inflation throughout the world economy and the kings of France, who weren’t getting much of this wealth, only made things worse by manipulating the values assigned to their coins. The States General which met at Blois in 1577 added to the public pressure to stop currency manipulation. Henry III agreed to do this and he revived the franc, now as a silver coin valued at one livre tournois. This coin and its fractions circulated until 1641 when Louis XIII of France replaced it with the silver écu. Nevertheless, the name "franc" continued in accounting as a synonym for the livre tournois.
1795 five centimes, the first year of decimal fractions for the franc.
for 5 livres (1791)
Three separate strikes of the proposed two-decimes coin (not adopted)
The decimal "franc" was established as the national currency by the French Revolutionary Convention in 1795 as a decimal unit (1 franc = 10 décimes = 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. Silver coins now had their denomination clearly marked as "5 FRANCS" and it was made obligatory to quote prices in francs. This ended the ancien régime’s practice of striking coins with no stated denomination, such as the Louis d'or, and periodically issuing royal edicts to manipulate their value in terms of money of account, i.e. the Livre tournois.
Coinage with explicit denominations in decimal fractions of the franc also began in 1795. Decimalization of the franc was mandated by an act of 7 April 1795, which also dealt with of weights and measures. France led the world in adopting the metric system and it was the second country to convert from a non-decimal to a decimal currency, following Russia’s conversion in 1704, and the third country to adopt a decimal coinage, also following the United States in 1787. France’s first decimal coinage used allegorical figures symbolizing revolutionary principles, like the coinage designs the United States had adopted in 1793.
The circulation of this metallic currency declined during the Republic: the old gold and silver coins were taken out of circulation and exchanged for printed assignats, initially issued as bonds backed by the value of the confiscated goods of churches, but later declared as legal tender currency. The withdrawn gold and silver coins were used to finance wars and to import food, which was in short supply.
As during the "Mississippi Bubble" in 1715–1720, too many assignats were put in circulation, exceeding the value of the "national properties", and the coins, due also to military requisitioning and hoarding, rarefied to pay foreign suppliers. With national government debt remaining unpaid, and a shortage of silver and brass to mint coins, confidence in the new currency declined, leading to hyperinflation, more food riots, severe political instability and termination of the First French Republic and the political fall of the French Convention. Then followed the economic failure of the Directoire: coins were still very rare. After a coup d'état that led to the Consulate, the First Consul progressively acquired sole legislative power at the expense of the other unstable and discredited consultative and legislative institutions.
French Empire and Restoration
In 1800 the Banque de France, a federal establishment with a private board of executives, was created and commissioned to produce the national currency. In 1803, the Franc germinal (named after the month Germinal in the revolutionary calendar) was established, creating a gold franc containing 290.034 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) until 1864, when all silver coins except the 5-franc piece were debased from 90% to 83.5% silver without the weights changing.
1807 40 gold francs, now depicting Napoleon as Emperor.
This coinage included the first modern gold coins with denominations in francs. It abandoned the revolutionary symbols of the coinage 1795, now showing Napoleon in the manner of Roman emperors, first described as "Bonaparte Premier Consul" and with the country described as "République Française". The republican pretense faded fast. In 1804 coins changed the obverse legend to Napoleon Emperor, abandoning his family name in the manner of kings. In 1807, the reverse legend changed to describe France as an empire not a republic. In analogy with the old Louis d'or these coins were called Gold Napoleons. Economically, this sound money was a great success and Napoleon’s fall did not change that. Succeeding governments maintained Napoleon’s weight standard, with changes in design which traced the political history of France. In particular, this currency system was retained during the Bourbon Restoration and perpetuated until 1914.
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 grams of gold.
World War I
The value of the old French franc, in 2007 euros
. Years shaded in gold indicate fixing to the gold standard
The outbreak of World War I caused France to leave the gold standard of the LMU. The war severely undermined the franc's strength: war expenditure, inflation and postwar reconstruction, financed partly by printing ever more money, reduced the franc's purchasing power by 70% between 1915 and 1920 and by a further 43% between 1922 and 1926. After a brief return to the gold standard between 1928 and 1936, the currency was allowed to resume its slide, until in 1959 it was worth less than 2.5% of its 1934 value.
World War II
During the Nazi occupation of France (1940–44), the franc was a satellite currency of the German Reichsmark. The exchange rate was 20 francs for 1 RM. 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.
The value of the old French franc in the post-war period, in 2007 euros
At the liberation, the US attempted to impose use of the US occupation franc, which was averted by General De Gaulle.
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).
The value of the new French franc, in 2007 euros. Years shaded in light blue indicate fixed exchange rate to the euro
In January 1960 the French franc was revalued, with 100 existing francs making one nouveau franc. The abbreviation "NF" was used on the 1958 design banknotes until 1963. Old one- and two-franc pieces continued to circulate as centimes (no new centimes were minted for the first two years). The one-centime coin never circulated widely. Inflation continued to erode the franc's value: between 1950 and 1960, the price level increased 72 per cent (5.7% per year on average); between 1960 and 1970, it increased 51 per cent (4.2%). Only one further major devaluation occurred (11% in August 1969) before the Bretton Woods system was replaced by free-floating exchange rates. When the euro replaced the franc on 1 January 1999, the franc was worth less than an eighth of its original 1960 purchasing power.
After revaluation and the introduction of the new franc, many French people continued to use old francs (anciens francs), to describe large sums (throughout the 1980s and well in to the 1990s and virtually until the introduction of the euro, many people, old and young – even those who had never used the old franc – were still referring to the old franc, confusing people). For example, lottery prizes were most often advertised in amounts of centimes, equivalent to the old franc, to inflate the perceived value of the prizes at stake. Multiples of 10NF were occasionally referred to as "mille francs" (thousand francs) or "mille balles" ("balle" being a slang word for franc) in contexts where it was clear that the speaker did not mean 1,000 new francs. The expression "heavy franc" (franc lourd) was also commonly used to designate the new franc.
All franc coins and banknotes ceased to be legal tender in January 2002, upon the official adoption of the euro.
Economic and Monetary Union
From 1 January 1999, the value exchange rate of the French franc against the euro was set at a fixed parity of €1 = 6.55957 F. Euro coins and notes replaced the franc entirely between 1 January and 17 February 2002.