Information about currency: French Franc

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. 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. Decimalisation 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 symbolising revolutionary principles, like the coinage designs the United States had adopted in 1793.

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 290.32 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) until 1864, when all silver coins except the 5 franc piece were debased from 90% to 83.5% silver without the weights changing.

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 “Republique 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.

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.

During the Nazi occupation of France (1940 - 1944), the Franc was a satellite currency of the German Reichsmark. The exchange rate was 20 Fr 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.

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).

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 (according 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, basically 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.