Directory- Financial and economic problems and policies Flashcards
a)Who was the minister of Finance for the Directory and b) what was his prior experience
a) Remel (Feb 1796-July 1799)
b) He was in the council of 500 in 1795 which means he served in previous revolutionary government- there for Estates General
What were some of the problems of France’s economy?
-The Assignats (paper currency) had become virtually worthless - 1% of their original value due to inflation
a)When was the Assignat abolished and b) when and what was the new paper currency that replaced it?
a) Assignat was abolished in February 1796
b) Was replaced by the Mandate in March 1796
How much (in francs) Mandate was issued to replace (in francs) assignats in February 1796?
-800m francs worth of Mandates were issued to replaced 2.4b francs worth of assignats
-When did the Mandate become worthless?
-July 1797
a) When did paper currency cease to be legal currency and b) what was it replaced by?
a)Feb 1797
b) it was replaced by metal coinage which saw a partial return to natural economy( bartering with exchange goods)- not good
What were the successes/strengths of the Reform of currency?
-Metal coinage established the groundwork for NB’s bank of France
What were the failures/weaknesses of the reform of currency:
-mandate become worthless in July 1797: Directors only paid in grain
-Treasury was empty so reform to metal coin led to limited circulation, leading to deflation, as cannot make more which was exacerbated by emigres leaving with coins
-Deflation from low circulation of coins meant lower prices which upset the bourgeois businessman who the Directory wanted to support
-Return to natural economy meant it was not standardised
-Inflation crisis from 1795-97 made the directory unpopular which led to royalist resurgence.
a)How many coins were in circulation in 1789 and b) how many by 1797 ?
a) 2.5b coins in circulation in 1789
b) 1b coins in circulation in 1797
When did the Directory declare bankruptcy?
-September 1797
How did the directory pay off debts to creditors?
-Issued them with state bonds, which could then be used to purchase biens nationaux
What is the Bankruptcy of 2/3rds?
-The law that wiped out 2/3rds of state debt
What were successes/strengths in decreasing state debt
-Bankruptcy of 2/3rds reduced government annual expenditure by 160m livres which helped to stabilise Government for a time
-National debt decreased from 240m francs to 80m francs
What were failures/weaknesses in decreasing state debt?
-Controversial and unpopular especially bonds for biens nationaux as they deprecated in value by 60%
-Bonds were condemned by council of ancients for being unorthodox as robbed creditors (bourgeoisie) of their money
a) When did the Directory refuse to accept the bonds as payments for biens nationaux and B) significance?
a)1799
b)Means the bourgeoisie will no longer support the Directory which in turn allows NB to achieve control through his coup
What taxes had been established in 1798 and significance?
a)
-Land tax
-Trading licences
-Tax on windows and doors
-Movable property- horse and carts
b)Significant as it shows how the Directory really targeted the bourgeoisie through taxes which would add to their unpopularity- however it is enlightened. Was also resented royalists
a)What indirect taxes had the Directory re-implemented and b) significance?
a)Octrois
-Stamp tax on newspapers and official documents
b) Very reminiscent of the AR as Calonne implemented a stamp tax under Louis
What indirect tax was inhibited by the council of ancients which is very reminiscent of the AR?
-The gabelle was rejected by the ancients
How did the Directory reform tax collection?
-commissioners appointed by the Directors were to assess and levy taxes which was hard line on taxation
What were the sucessess/strengths of increasing revenue through taxation?
-Reforms of Remel balanced the budget (first time in the revolution)
-taxation reforms was a long-lasting achievement of the Directory: taxes on windows and doors lasted until 1914
What were the failures/weaknesses of increasing revenue through taxation?
-Weaknesses in the constitution made it difficult for purposeful reforms to be passed sooner and was delayed until 1798 due to royalist resurgence in 1797
-Unpopular and alienated those the constitution served to protect
-Tax collection remained inconsistent and did not entirely solve the problem of state revenue
-Balancing the budget was aided by Napoleon’s successes in the Italy campaign.
Overall judgment on the financial and economic problems and policies.
-The legacy of previous regimes and safeguards of the constitution of Year III made it difficult for the directory to make long-lasting reforms.
-Directory’s reforms had become deeply unpopular
-Relied on an aggressive war policy which increased reliance on the army and allowed NB to get his foot in the door.
