Economic problems and finance Flashcards
Strengths of the French economy in 1780s:
Population change
21.5 million 1700 -> 27 million in 1780s
3x population of GB
Strengths of the French economy in 1780s:
Commerce
1715 -> 1771 commerce improved by almost eightfold
France 2nd to GB in trade
Bordeaux thrived on handling goods to and from Spain
Strengths of the French economy in 1780s:
Transport
1760- 1000km trip from Paris to Toulous took 15 days
1780s- Same trip took 8 days
Industrial production 2x between 1715 and 1771
27 new factories
Weaknesses of the French economy in 1780s:
Land
Divided due to inheritance, seigneurial arrangements
-Hard to control
Weaknesses of the French economy in 1780s:
Trading
25,000 units of measure in France before 1789
Lacked network of rivers and canals to carry goods
-Expenses for shipping, land movement of goods took a while
Weaknesses of the French economy in 1780s:
Banking System
Not advanced
-Borrowing schemes collapsed
Downturn in 1770s
-Bad winters from 1785-9 depressed peasant incomes
-July 1788 hailstorm destroyed crops
-Worst harvest in 40 years
Layoffs in industry at a time of rising prices
Banks had a fear of paper notes as they could be forged
Direct taxation- Who did it effect, what was it on, who was it collected by, examples.
Who did it effect?
Third Estate (supposed to be all but First Estate easily evaded these)
What was it on?
Individuals and their income
Who collected it?
Royal officials
Examples:
The taille
-Brought in 20 million livres a year
-Introduced to pay for the Seven Years War
-Calculated according to value of property and income received
Capitation
-Introduced in 1695 to pay for War
-Clergy didn’t have to pay this
Vingtième
-Introduced to offset the costs of France’s imperial Wars
-1/20th of annual income
-Came and went due to different wars but stayed during Louis XVI’s time because they didn’t have enough money despite opposition from the public.
Indirect taxation- Who did it effect, what was it on, who was it collected by, examples.
Who did it effect?
Everyone
What was it on?
Paid on duties and goods
Who was it collected by?
Tax farmers
Examples:
Gabelle-
Salt (essential for French life) tax
Applied to all salt purchases, private or commercial
Varied from place to place- half a livre in Paris per pound, exempt in other provinces in South and East
Raised 55 million livres a year
Aide
-Wine
Tabac
-Tobacco
Octroi
-Municipal tariff on goods entering large cities e.g Paris.
Tax farmers corruption
40 fermiers-généraux (tax farmers)
Collected taxes on behalf of the government
Some made several million livres a year- wealthiest groups in France
As they were corrupt and avaricious they were blamed for the financial woes in Frances.
How did France help America?
Benjamin Franklin was enthusiastically received
French supplied aid in secret from early 1776 when Pierre Beaumarchais was authorised to sell gunpowder and ammunition to the Americans
By 1777, over 5 million lives of aid had been sent
Who was Turgot?
Friends with philosophers like Pierre-Samuel who held similar physiocrats’ schools of thought.
Entered a career in the royal administration in later 1751.
When was Turgot a controller general?
1774-6
What were Turgot’s six edicts? What else did he introduce?
Introduced in 1776
Cuts to royal expenses
Demand that government departments submit their expenses to the Controller-General (to find ways to reduce spending)
Removal of several pensions
Reform of the tax-farming system to increase efficiency
Abolishing the corvee
He disliked their involvement in the American Revolutionary War
Results of Turgot’s reforms
Reduced the deficit
Negotiated a low-interest loan of 4% with some Dutch Bankers in 1776
Opposition to Turgot
Several of his proposals were abandoned
Replacing indirect taxes with land tax (opposed by second estate nobles)
1774 attempt to establish free trade in grain, abandoned after the poor harvest of 1774
1776 six edicts-
5th opposed the guilds, 6th abolished the corvee
Offended Marie Antionette’s favourite people.
When was Turgot fired?
May 1776, most likely in response to the edicts
