1.3. Financial Problems And Attemps To Deal With Them Flashcards
When was the war of Austrian succession?
1740-1748
How much did the war of Austrian succession cost?
1 billion livres
When was the seven years war?
1756-63
How much did the seven years war cost?
1.3 billion livres
When was the American revolutionary war?
1778-83
How much did the American revolutionary war cost?
1.07 billion livres
How much was royal income in 1788?
503 million livres
How much was royal expenditure in 1788?
629 million livres
How was the cost of war covered?
By loans and taxation
How much of royal expenditure was spent on interest by 1788?
60% of royal expenditure was spent on interest alone
Why was the taxation system of the ancien regime inefficient?
There were lots of exemptions for estates
What was tax farming?
A system where the Farmers-general paid an agreed sum to the crown and collected indirect taxation on the crowns behalf - keeping any surplus beyond the agreement as profit
What was the tax system based on?
Tax farming
Why were there complications of collecting taxes?
Each region had a different set of taxes and rules
What did Louis XV think about the crowns expenditure?
He said après moi le deluge (it will be someone else’s problem when I die)
How much was annual deficit by the 1780s?
37 million livres
What was the total debt by the 1780s?
235 million livres
Who was Turgot?
An eminent expert in economics who was heavily influenced by the philosophes of the period
What did Turgot become?
Controller General of Finances
When did Turgot become Controller General of Finances?
1774
What was Turgot’s aim?
To modernise, create wealth and increase royal revenue
What did Turgot introduce?
Six edicts
When did Turgot introduce his Six Edicts?
1776
What were Turgot’s six edicts?
- Abolishing price controls
2.reducing restrictions on trade by guilds and promoting entreprises - Proposed economies in crown spending
4.a new property tax
5.abolition of the corvée with a new system of road maintenance - Subject all three estates to taxation
Why were there bread riots in France?
Poor harvests in 1774-76 and the end to price controls
What happened to the bread riots?
Turgot harshly suppressed them
What happened to Turgot?
Privileged interests in court turned against him, leading to his downfall in 1776
What do many believe was the reason why the court turned against Turgot?
Marie Antoinette led it
Who was Necker?
A Swiss Protestant who was a prominent lawyer and banker with a large fortune
What did Necker become?
Directed General of Finances in 1777
Why wasn’t Necker controller general of finances?
He was barred due to being foreign and Protestant
What were Necker’s aims?
-To increase tax take by increasing the crowns share from the farmers general
-To reduce the number of venal offices in charge of tax farming
-To increase confidence in the crowns ability to repay loans
How much did Necker borrow?
500 million livres
What did Necker publish?
The Compte Rendu in 1781
What was the compte rendu?
Misleading royal accounts to make finances look better
What was on the compte rendu?
Salaries, pensions and royal household expenditure
Why was Necker resigned?
The compte rendu angered the court
When did Necker resign?
1781
When was Necker recalled to office?
1788
Why was Necker recalled to office?
He advocated for summing estates general to solve the financial issues
When did Calonne take over?
1783
What was the debt when Calonne took over?
Over 100 million livres
What did Calonne establish?
A sinking fund and reissued gold coinage
What was a sinking fund?
A long term savings account which set capital aside to help repay the debts
Why did Calonne reissue gold coinage?
To prevent counterfeiting which was costly to the crown
What was Calonnes three pronged approach?
- Aimed to reduce the expenditure of the crown
2.a new progressive land tax which would be applied to all land owners
3.free trade would be developed internally to boost the economy
What did Calonne do to try to prevent the parlements being hostile to these changes?
He called a special meeting of the assembly of notables to share the responsibilities for the reform
When was the meeting of the assembly of notables?
22nd February 1787
What happened after the assembly of notables meeting?
No agreement was made so Louis XVI withdrew his support for Calonne
When was Calonne dismissed from office and exiled?
By April 1787
What was the assembly of notables meeting and calonne’s exile called?
The aristocratic revolt
