Monnaie de Paris History

Company Perspectives:

The Direction of Coins and Medals' objective is to become a leading monetary institute of reference at the European level by building upon, on the one hand, its quality systems and industrial performance, and, on the other hand, its services to individual private and institutional clienteles, and by deploying a dynamic commercial strategy in the corporate gift and collector coin market segments.

Key Dates:

1360:

John the Good, after being ransomed from British captivity, introduces the first franc coin.

1795:

The franc is adopted as France's official currency.

1803:

A full-scale currency system based on the franc is developed; this action includes the creation of what will become the Monnaie de Paris.

1879:

The French government passes legislation placing minting activities under the government's exclusive control.

1958:

The French government, under Charles de Gaulle, announces creation of a "new" franc to replace the devalued old franc.

1973:

The Monnaie de Paris builds a fully integrated coin production site in Pessac, near Bordeaux.

1979:

The European Monetary System, a first step toward a common European currency, is adopted.

1998:

Monnaie de Paris ends its production of the franc and launches full-scale production of euro coins, producing nine billion coins over four years.

1999:

The euro becomes the officially monetary unit of the European Union.

2002:

The euro begins circulation; Monnaie de Paris launches a restructuring program.

Company History:

Monnaie de Paris is one of Europe's top money-issuing authorities. The French Mint, as the agency is also called, is attached to France's Ministry of Economy, Finance, and Industry, and is responsible for the production and issuing of the country's supply of euros. Monnaie de Paris manufactures coins and bills at two facilities--one in Paris and the other in Pessac, in the Gironde region near Bordeaux. The latter facility is a fully integrated site, with operations spanning metal production to packaging. Between 1998 and 2002, that facility produced more than nine billion coins for the launch of the euro. The state-run agency also manufactures foreign currency coins and bills. Through the Direction of Coins and Medals (DCM), Monnaie de Paris produces a wide range of commemorative coins (not just for the French government but also for the private and business sectors) and has extended its range to include art bronzes and even jewelry. In support of these activities, Monnaie de Paris began to hold thematic design compositions in 2003. The DCM is also responsible for the production of civil and military medals and related honor decorations for the French and other governments. In 2002, Dov Zerah was appointed as director of the Monnaie de Paris.

History of the French Franc

Charles the Bald became the first French monarch to assert control over the country's currency, proclaiming in 864 that the minting of coins was to be the exclusive province of the palace. In 1358, the palace's minting powers were modified when oversight of the country's financial administration and the manufacture of its currency were separated. Production of coins was then given over to small workshops, which nonetheless acted under the authority of the crown.

The first record of a monetary unit known as the "franc" goes back to 1360. Captured by the English four years earlier in the midst of the Hundred Years War, John the Good had agreed to pay a ransom. In order to pay the ransom, the monarch ordered the creation of a new coin known as the "golden franc." The new coin served additional purposes, commemorating on the one hand that John the Good had been "franc'd" (freed) by the English, and, on the other, emphasizing the monarch's claim to sovereignty over France.

John the Good's franc, which continued to be minted for some 25 years, was just one of many currencies then in circulation in the country. Other versions of the franc appeared over the next two centuries, including a silver franc minted under Henri III starting in 1575. While that particular franc was withdrawn from circulation a decade later, the franc as a unit of common currency in France remained in circulation as half- and quarter-franc coins until 1642, when it was replaced by the livre (pound).

The next appearance of the franc proved more long-lasting. The French Revolution at the end of the 18th century brought about a call for a new French currency. The new government--which had not only adopted the metric system but also developed an entirely new calendar--officially established the franc as the country's monetary unit in 28 Thermidor Year III (August 15, 1795). The new coin was also placed under the metric system, subdivided into the decime, worth th of a franc, and the centime, worth th of a franc. At the same time, the weight of the full franc coin was fixed at 5 grams of .900 silver for a final weight of 4.5 grams, making the new coin roughly equivalent in value to the pound. Oversight of the new currency was given to a newly created body, later to be known as the Direction of Coins and Medals.

In 1803, the French government inaugurated a full-fledged coinage system based on the Franc Germinal, which officially established the weight of the French franc in silver. At that time, the range of issued coins included 50 and 25 cent pieces, as well as coins valued at two and five francs. The government also established larger currencies, 20 franc and 40 franc coins, which were minted in gold. This new monetary system, which linked the currency to both the silver and gold standards, proved the country's first modern currency and remained in effect until the outbreak of World War I.

The new franc resisted the many political upheavals in France, remaining the country's currency long after the end of the Revolution. While the portraits on the coins underwent a number of changes, the principle of the franc itself remained unchallenged. The strength of the French currency, at least in the first half of the 20th century, led a number of the country's neighbors to align their own currencies to the franc, starting with the Italian lire piemontaise in 1816 and including the Belgian and Swiss francs, the Greek drachma, and, finally the Spanish peseta in 1859.

A first attempt at European monetary union took place under Napoléon III with the creation of the Latin Union among France, Switzerland, Belgium, and Italy in 1865. Two years later, at the Universal Exposition, Napoléon proposed to extend that monetary alliance with the creation of an international currency. The idea failed to catch on, however, and the Latin Union succeeded in attracting only one other member, Greece, in 1868. In the meantime, the Union's use of both gold and silver standards compromised the franc. Dramatic increases in the production of silver had vastly lowered its value, leading to a flood of counterfeit silver coins into the Union's member nations. The silver standard remained in effect in France until 1928, when it was finally abandoned and gold became the de facto currency standard.

An important result of the currency crises resulting from silver's loss in value was the move by the French government to take control of the production of the country's currency. The first step was taken in 1876, when the government took over all production of silver franc coins, a move that was extended throughout the Latin Union two years later. Then, in 1879, the French government passed new legislation establishing the production of currency as the exclusive province of the state. This date marked the birth of the modern French Mint, the Monnaie de Paris.

Industrial production techniques enabled the Mint to increase its output. By the end of the century, the French Mint had reached production capacities of more than 22 million gold, silver, and bronze coins each year. The Mint had also become a major producer of foreign currencies as well, counting customers among a growing number of states, including Indo-China, Greece, Bolivia, Haiti, and Morocco.

New Franc in the 1950s

World War I not only put France's gold reserves under pressure, it made the manufacture of coins more costly as well. The Mint responded to the metal shortage, and to the war in general, by issuing a new series of bills featuring patriotic themes. The country also issued a new series of coins, made from nickel, featuring holes in the center in order to save on raw materials. The economic upheavals of the postwar period led to a rapid devaluation of paper-based currency in France and elsewhere. By 1926, the Latin Union was officially disbanded, and the franc itself was in danger of collapse.

The appointment of Raymond Poincaré as Finance Minister led, in 1928, to the stabilization of the country's currency around a devalued French franc--worth less than 20 percent of the former Franc Germinal. The currency reform meant that silver and gold-based coins were taken out of circulation and replaced by coins made of less valuable metals, particularly nickel, and a new series of designs. The Poincaré reforms rescued the franc, if only temporarily.

The Depression era revived the production of "pierced" coins, which were now made from a nickel-bronze alloy. By the end of the decade, zinc had been added to the mix. The occupation of France during World War II forced a new issue of coins, which replaced the slogan "Liberté, Fraternité, Egalité" with the Nazi-inspired "Work, Family, Country." These new coins, especially those of low value, were increasingly produced from zinc. One coin was even struck in iron.

Following the French liberation, the country issued a new set of currency. The French Mint also became responsible for the production of a new currency, the Franc CFA. During the war, France's colonial possessions had been placed under the French currency system. In 1948, the French government created the new currency for use throughout its zone of influence. The name CFA originally stood for Colonies Françaises d'Afrique. With the independence of nearly all of the countries within the CFA zone, the initials came to refer to "Communauté Financière Africaine."

In the meantime, France's rising postwar economy led to a new devaluation of the franc. In 1950, the French Mint began issuing a new series of coins featuring higher denominations. The new series included 10, 20, and 50 franc coins. These were supplemented with a 100 franc coin issued in 1954.

In 1958, the French government, under Charles de Gaulle, moved to reform the country's currency system as part of its commitment to economic stability. In that year, the government announced its intention to replace the existing currency with a "new" franc. The new currency system called for the emission of a revised range of coins and bills, which came into full circulation in the mid-1960s.

In 1973, the Monnaie de Paris decided to concentrate its coin production into a single facility, in Pessac, near Bordeaux. The new production plant gave the Mint a fully vertically integrated facility, from foundry operation to packaging. The site also took over production of medals and commemorative coins and developed into one of the world's major coin-production centers, enabling the Monnaie de Paris to continue producing coins for other countries. By the beginning of the new century, the Monnaie de Paris was responsible for the coin production for more than 30 countries.

New Currency for a New Century

The passage from the old to new franc gave France valuable experience for the next major revolution in the European currency market: the adoption of the euro. The creation of the European Common Market (EC) inspired new efforts to limit the fluctuation among European currencies. By the late 1970s, the EC countries had agreed to a first link among their currencies, launching the European Monetary System in 1979 and establishing a common unit of exchange, the "ecu."

Movement toward the creation of a truly common currency picked up speed with the passage of the Maastricht Treaty of 1992, which replaced the Common Market with the European Union and abolished trade barriers among member countries. The new union now turned toward creating its own currency, which, in 1995, was given the name "euro."

The euro was slated to become the official European monetary standard in 1999, with actual circulation of the new currency to begin on January 1, 2002. In the meantime, Monnaie de Paris turned its attention toward the herculean task of producing the bills and coins needed to replace the more than 12 billion banknotes and seven billion coins then in circulation. The Department of Currency and Coinage began ramping up to that challenge in the mid-1990s, adopting a production strategy dubbed "Currency 2000," which included efficiency improvements at the Pessac facility.

The Monnaie de Paris was given the task not only of putting into place a production schedule for the euro but also of ensuring that the franc remained in full supply until the end of 2001. Indeed, as one of the world's most popular tourists destinations, hosting close to 100 million visitors each year, many coins fell out of circulation at the bottom of tourists' pockets. In preparation for the switch to the euro, the Pessac plant boosted its production output of franc coins.

At last, after striking a final, commemorative franc designed by Philippe Starck, the Monnaie de Paris converted its production to euro coins in May 1998. In 1999, the euro became the official currency of the European Union, although the use of euros took place only in the corporate and governmental sectors. By 2001, the government began preparing consumers for the "big bang." The first euro packs became available for purchase at the end of the year, allowing consumers to familiarize themselves with the new coins and leading up to the full-scale launch of the euro on January 1, 2002.

The Monnaie de Paris had successfully overseen production of more than nine billion coins in less than four years. The Mint and the Direction of Coins and Medals then began a restructuring program within a wider reorganization of France's Ministry of Economy, Finance, and Industry. The new strategy, launched at the end of 2002 and continued throughout 2003, involved a reorganization of the Mint's production facilities in Paris and Pessac in an effort to cut costs and enhance efficiency. An important part of the Monnaie de Paris' future strategy centered on its development as a design house for commemorative coins and medals, not only for government use but also for the corporate and consumer markets. As part of that effort, in 2003 the Monnaie de Paris launched the first of its design competitions, which were open to engravers, graphic designers, illustrators, and artists.

Principal Divisions: Direction of Coins and Medals; Department of Currency and Coinage.

Principal Competitors: Royal Mint; Royal Canadian Mint; U.S. Mint; Deutsche Bundesbank; De Koninklijke Nederlandse Munt; Fabrica Nacional de Moneda y Timbre.

Further Reading:

• Blume, Mary, "History Prepares France for the Daunting Euro," International Herald Tribune, April 4, 1998, p. 20.
• "French Mint Forges ahead with Euro coin," Metallurgica, July 1999, p. 2.
• Johnson, Jo, "Franc to Go out with a Bang," Financial Times, October 5, 2001, p. 12.

Source: International Directory of Company Histories, Vol.62. St. James Press, 2004.

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