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Based on an extensive survey of French primary sources and a discussion of the recent literature on fiscal policy in France and Europe during Louis XIV's wars, this article revisits the rationale behind the first experiment with paper money undertaken by finance minister Michel Chamillart, comparing it to other belligerents’ strategies, in particular England's, to adjust their monetary regime to the challenges of funding long wars of attrition. The article shows how concerns about economic activity, coinage and the need to finance the war deficit led to a series of debasements of the French currency, the establishment of a bank in the form of aCaisse des empruntsand the introduction of mint bills, which became legal tender and caused the first experience of fiat money inflation in history. Whereas Chamillart's personal shortcomings have been recently suggested as the cause of Louis XIV's humbling in the War of the Spanish Succession, I argue on the contrary that the introduction of paper money in 1704 was key to the capacity of France to sustain its military effort, but that a succession of military defeats against a more powerful coalition led to inflation. I also argue that the introduction of paper money saved theCaisse des empruntsand its bonds which helped sustain the war effort up until the peace. By situating the use of paper money within the broader question of the exercise of power in the absolute monarchy, this article examines the formation of fiscal policy, paying attention to the ways in which government sought advice from experts. It concludes by calling for further studies on policy- and decision-making under Louis XIV.

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The articles published in this special issue proceed from a workshop whichtookplaceattheUniversityofReadinginApril20 1 4,fundedbythe Economic and Social Research Centre (ESRC,UK),withthesupportofthe Centre de Recherches Historiques at the cole des Hautes tudes en Sciences Sociales (CRH-EHESS). 8 At o t a lo fn i n ee x p e r t so ns i xO l dR e g i m eE uropean polities (France, Spain, the United Kingdom, the Dutch Provinces, t h eKi n g d o mo fN a p l e sa n dS w e d e n)d e b a t e dt h et h e m e' T h eE x c e s s e so f 7. M. DINCECCO, 2013. 8. I thank both these institutions for their nancial help. Support from The Economic and Social Research Council is part of a 3-year professorial fellowship (ES/K010654).

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