Financial and economic problems and policies

Question 1

economic - problem

Answer 1

• Therimdirian attempt to switch from a system of economic control to a liberal environment caused acute inflation
• Poor harvest in 1795 meant people were poor
• Trading situations were compromised

Question 2

economic - solution

Answer 2

1795 weights and measures were standardised

Question 3

economic - success?

Answer 3

Brought the price of grain down with help form the better harvest in 1796 and 1798

Question 4

financial - problem

Answer 4

• Excess printing of assignet brought it down to 1% of its face value making it worthless
• Therimdirian attempt to switch from a system of economic control to a liberal environment caused acute inflation
• Inherited a badly unbalanced budget made worse by the cost if war and inefficient tax collection
• National Debt was very high
• Government revenue was very low due to poor tax collection

Question 5

financial - solution

Answer 5

• Introduced mandats which 800 million francs worth of mandates were issued to replace the 24 billion francs worth of assignet
• Metal coins become the legal currency
• Partial return to a natural economy in 1797
• Directory attempted to control the currency
• Directory attempted to control the currency
• September 1797 Ramel the minister of finance wrote of ⅔ of internal debt replacing it with non interest bearing bonds that could be used to purchase land
• 1789 Ramel introduced 4 basic forms of direct taxation: tax on trading licences, land tax, tax on moveable property and tax on windows and doors
• Method of collecting direct tax was changed to central control were the directors appointed commissioners who assessed and levied taxes

Question 6

financial - success ?

Answer 6

• Mandats were rapidly counterfeited and their values repaired in a year so were worthless (5% of face value)and in February 1979 they ceased to exist
• Directories and deputies refused to accept cash payment an instead only accepted grain as it was the only worthy thing
  Barter system meant that it creates an unbalanced trade system
• Halted inflation but the lack of coinage due to the emigres leaving with it brought about deflation making the directory unpopular with businessmen as lower prices meant lower profits
  1797 only a billion livres in circulation as compared to 2.5 billion in 1789
• Laid the groundwork for the Bank of France set up by napoleon in 1800
• Reduced the annual interest of the national debt form 240 million francs to 80 million
• Angered bond owner as after a year bonds values had filled by 60% and soon became worthless when the government refused to accept them for the purchase of land
• Some taxes survived until 1914