French Revolution, Points Test 3 - Economic Problems and Royal Finance under the AR Flashcards
1
Q
- Why did the French Economy have many positive aspects for most of the 18th century (esp. with population and agriculture)?
A
- Why did the French Economy have many positive aspects for most of the 18th century (esp. with population and agriculture)?
- Many signs of a thriving economy in France for the first 3/4s of the 18th century.
- Rapid population growth from 1730s meant it had population of 27 million by 1780s.
- It had been 21.5 million in 1700.
- This was more than three times the population of Great Britain.
- France united and politically stable, in comparison to most neighbours.
- Italy and Germany politically fragmented, Spain in decline.
- Had lots of excellent agrarian land: prices for produce rising due to demand, large landowners profited and increased their holdings.
- From 1730s, France followed Britain’s lead in improving agricultural techniques (crop rotations, use of fertilisers).
- Cultivation of American Maize and Potatoes expanded, increasing calorific intake.
2
Q
- Why had French Commerce increased significantly in this period?
A
- Why had French Commerce increased significantly in this period?
- Between 1751 and 1771, French commerce increased almost eight fold, making France second only to Great Britain in trade.
- Trade with colonies quadrupled, making trading ports prosperous.
- Marseilles boomed on trade with Levant; Nantes and le harve with French West Indies.
- Bordeaux thrived on handling goods to and from Spain.
- Merchants grew rich from the slave trade and import of cotton, indigo, coffee and sugar, which they re-exported across Europe.
3
Q
- How was transport and infrastructure improving in this period?
A
- How was transport and infrastructure improving in this period?
- Transport improving: in 1760s, 1000km from Paris to Toulouse took 15 days.
- By 1780s, it took 8.
- Visitors commented on quality of royal roads (maintained by the corvée royale).
4
Q
- How was manufacture/industrial production improving in this period?
A
- How was manufacture/industrial production improving in this period?
- Industrial production doubled between 1715 and 1771; mining, metallurgy and textiles (in particular printed fabrics) did well.
- Mechanisation introduced, some factories appeared.
5
Q
- How did French banking improve in this period?
A
- How did French banking improve in this period?
- Paris became the centre of France’s banking.
- Caisse d’Escompte founded in 1776 to discount bills of exchange.
- These helped trade by offering ready cash for a bill, so that a trader didn’t have to wait for payment.
6
Q
- What economic problems did the AR Economy suffer in terms of agriculture?
A
- What economic problems did the AR Economy suffer in terms of agriculture?
- However, there were also economic problems, and these grew worse in the 1770s and 1780s.
- The French economy was predominantly agricultural: only 15% of pop. Lived in areas of more than 2,000 inhabitants.
- However, agriculture comparably backward (say to Britain or the United Provinces), partly due to seigneurial arrangements, and partly due to farm division for multiple sons due to rising population.
- This reduced size of holdings to below that of self-sufficiency.
- Yield from French farms very low, there was rural over-population, and peasantry high-taxed.
- They persisted with backward agricultural techniques (often because they had to?).
- Food production could not keep up with population growth.
7
Q
- Why did state regulations often hinder the French Economy’s growth at this time?
A
- Why did state regulations often hinder the French Economy’s growth at this time?
- State imposed regulations on domestic economy: set requirements for production quality and limited industries to certain cities.
- There were also internal trade barriers.
- Variations in weights and measures across the country.
- Before 1789, estimated 25,000 different units of measure. They varied from town to town and from trade to trade; some traders used their own measuring devices, offering ample opportunity for fraud.
- France lacked a network of rivers and canals to carry goods, especially grain.
8
Q
- Why did France’s industry suffer in the late 18th century?
A
- Why did France’s industry suffer in the late 18th century?
- In the 1780s there was a decline in France’s textile industry in the face of British Competition.
- French industry was less mechanised than that of Britain.
- In 1789, Britain had 200 cotton mills, while France had 8.
- Britain also had 20,000 spinning jennies, while France had 1,000.
- British competition produced unemployment among France’s spinners and weavers.
9
Q
- Why was the French Banking system weak in the late 18th century?
A
- Why was the French Banking system weak in the late 18th century?
- French banking system not advanced: borrowing scheme using paper money had been initiated by John Law at start of 18th century, but had collapsed.
- This led businessmen and traders to fear paper notes, as opposed to metal currency.
- Raising capital, therefore, not easy (and aristocrats traditionally uninterested anyway).
10
Q
- Why did AR France suffer a downturn in the 1770s/1780s?
A
- Why did AR France suffer a downturn in the 1770s/1780s?
- Downturn in 1770s; failure of the vintage in 1778 followed by series of poor harvests and disastrous winters from 1785 to 1789 which depressed peasant incomes.
- In July 1788, a hailstorm destroyed crops and France had its worst harvest in 40 years.
- This downturn led to a trade slump which produced lay-offs in industry, at a time of rising bread prices.
11
Q
- How in general did the AR government keep France solvent?
A
- How in general did the AR government keep France solvent?
- Government financed from direct and indirect taxation.
- Also supplemented by ‘temporary expedients’ such as loans or the sales of offices.
- This was to meet the shortfall between income and expenditure.
12
Q
- What was the main direct tax?
A
- What was the main direct tax?
- Traditionally, the main direct tax was the taille personelle (paid on the estimated annual value of possessions).
- In some areas, however, this was calculated slightly differently, known there as the taille réelle.
13
Q
- What other direct taxes had Louis XIV and XV introduced to pay for wars they had fought?
A
- What other direct taxes had Louis XIV and XV introduced to pay for wars they had fought?
- Louis XIV and Louis XV had also introduced other direct taxes to pay for wars, which theoretically everyone had to pay.
- These were the capitation (Poll tax), and the vingtiéme (5% levy).
- These taxes collected by royal officials (officiers) but some of the pays d’états paid their taxes as a lump sum.
14
Q
- What were the church’s tax arrangements?
A
- What were the church’s tax arrangements?
- Furthermore the special privileges according to the first two estates varied considerably; the church only offered the crown a ‘don gratuit’, a self-calculated lump sum which bore little relation to the wealth of its lands.
- This was paid every 5 years, amounting to 2% of the church’s total revenue.
- Church had won right to this in lieu of direct taxation.
15
Q
- Why was the collection of taxation so problematic?
A
- Why was the collection of taxation so problematic?
- There were also many indirect taxes on goods and services. These were collected by tax farmers and syndicates. However, accounting procedures were limited and there was widespread corruption.
- There was no central treasury or bank, so it was almost impossible for ministers to anticipate income and budget accordingly.
- Furthermore, financial officials and corporations purchased their positions and it was accepted practice for them to keep something of what they collected.
16
Q
- Why did increasing reliance on loans call problems for the royal finances?
A
- Why did increasing reliance on loans call problems for the royal finances?
- Government was therefore increasingly forced to rely on loans, particularly at times of heavy expenditure, such as during war.
- Interest had to be paid on these loans, and they built up a substantial royal debt.
17
Q
- How was royal tax collected?
A
- How was royal tax collected?
- Direct taxes collected by royal officiers who bought their positions.
- Most indirect tax collection had been sold to collection agencies, wither via a 6 year leave to the ferme générale (general farm tax) or to a régie générale.
- Régie was a syndicate (régisseurs) who received a fixed salary for their service.
- The ferme paid the crown an annual fee and took its income from the difference between that and the amount collected.
- Members of the ferme générale called fermiers-généraux (farmers-general).
- It was the 2nd largest employer in the country (after the army), bringing in more than half of the government’s revenue.
18
Q
- What was the taille?
A
- What was the taille?
- A Tax on property and income of 3rd estate.
- Divided into taille personelle (property/revenue/personal tax) and taille réelle (land and house property, or household, applicable in Languedoc, Provence, Guyenne and Dauphiné).
19
Q
- What was the Capitiation?
A
- What was the Capitiation?
- Capitation (Poll Tax)
- Theoretically payable by everyone.
- Clergy paid don gratuity instead.
- 2nd estate payments varied depending on rank, status, occupation and property.
- 22 different tax classes.
20
Q
- What was the Vingtiéme?
A
- What was the Vingtiéme?
- Vingtiéme (income tax)
- Vingtiéme direct tax of 5% of earnings from land, property, commerce, industry and official offices.
- Although intended to be levied on all, the clergy won exemption, the pays d’états won reduced rates and the parlements resisted new assessments of income.
21
Q
- Name some indirect taxes/what they were made on?
A
- Name some indirect taxes/what they were made on?
• Gabelle, The Salt Tax, collected by the ferme générale.
• Tabac, The Tobacco Tax, collected by the ferme générale.
• Aides, Represented a consumption tax on consumer goods, such as wine, liquor, oil, textiles, tallow, iron, wood, livestock, playing cards, hides, soap and paper. Aides were collected by the régie générale.
22
Q
- What were the Domaine?
A
- What were the Domaine?
- Comprised taxes on the crown lands (the royal domain).
- Collected by the régie générale. And overseen by the Chambre des Comptes (Chamber of Accounts).
23
Q
- What was the Traite?
A
- What was the Traite?
• Customs duty, collected by the régie générale.
24
Q
- What was the Timbre?
A
- What was the Timbre?
• Stamp Duty, levied on legal transactions and collected by régie générale.
25
Q
- What was the Octrois?
A
- What was the Octrois?
Local customs duties on goods brought into towns.
26
Q
- What was France’s national debt when Louis XV died in 1715, and why was this so serious?
A
- What was France’s national debt when Louis XV died in 1715, and why was this so serious?
- When Louis XV died in 1715, France already had a national debt of 2 billion livres (c.£150million).
- The annual interest payments on the debt were 165 million Livres.
- This was more than the government collected in taxes.
27
Q
- How much had the War of the Austrian Succession (1740-1748) and Seven Years War (1756-1763) cost? How else had the Seven Years’ War proven costly?
A
- How much had the War of the Austrian Succession (1740-1748) and Seven Years War (1756-1763) cost? How else had the Seven Years’ War proven costly?
- The War of the Austrian Succession (1740-48) closely followed by the Seven Years’ War (1756-63), which cost around 1.3 billion livres.
- It also ended with the disastrous loss of all French colonial possessions in North America.
28
Q
- By 1764, how much debt was France in (before Louis XVI came to power)?
A
- By 1764, how much debt was France in (before Louis XVI came to power)?
• By 1764 France was 2.3 Billion Livres in debt.
29
Q
- Why did involvement in the US War of Independence worsen the debt?
A
- Why did involvement in the US War of Independence worsen the debt?
- Louis increased this debt even further when he chose, in 1778, to side with the American revolutionaries in their war of independence.
- At the same time, income was hit by an economic depression.
- The Treaty of Paris in 1783 gave the French little reward.
- The former American colonialists chose to maintain their commercial ties with Britain.
- The French government faced a debt of just over 3.3 Billion livres.
30
Q
- Who was Turgot?
A
- Who was Turgot?
- First appointment as controller-general was Anne-Robert Jacques Turgot.
- The controller-general was the minister in charge of finances, between 16661 and 1791.
- A man known for his reforming ideas.
- Turgot has served in the Paris Parlement, in the Council of State and as an intendant in Limoges.
- A friend of Voltaire, an idealist and passionate for justice.
- However, he lacked tact when dealing with others – even, on occasion, with the king.
- Held physiocratic view that economy would be more efficient and productive if privileges, regulations, customs duties and other restrictive controls replaced by freer system.
31
Q
- How did Turgot reform the monarchy’s finances, and what successes did he have?
A
- How did Turgot reform the monarchy’s finances, and what successes did he have?
• Turgot produced a detailed regular budget, and took active measures to improve France’s financial state.
• Thanks to Louis’ backing, able to make some effective economies.
1. Cuts to Royal Expenses.
2. Demand that government departments submit their expense to the controller-general and find ways to reduce their spending.
3. The removal or reduction of a number of pensions (together with encouragement to Louis to be less lavish than his predecessors in granting these).
4. Some reforms of the tax-farming system to increase efficiency.
• Turgot opposed participation in the War of Independence, on the grounds of cost.
• However, he was unable to prevent some secret deals and volunteers travelling to America.
• Turgot’s measures helped to reduce the deficit, and enabled him to negotiate a low-interest loan of 4% with some Dutch Bankers in 1776.
32
Q
- Why were Turgot’s reforms opposed by some in the court?
A
- Why were Turgot’s reforms opposed by some in the court?
- Not all Turgot’s proposals met with approval, several had to be abandoned.
- His idea of replacing many indirect taxes with a property (land) tax strongly opposed by 2nd estate nobles at court, who stood to lose out.
33
Q
- Why did Turgot’s reforms for free trade in grain fail?
A
- Why did Turgot’s reforms for free trade in grain fail?
- Turgot got minor duties removed, but attempt in 1774 to establish free trade in grain, ending tolls and price controls, opposed by men with vested interests.
- His edict had to be abandoned after poor harvest of 1774.
- This drove up bread prices and provoked bread-riots, the ‘flour wars’, in early spring 1775.
34
Q
- What were Turgot’s ‘Six Edicts’?
A
- What were Turgot’s ‘Six Edicts’?
- Turgot’s ‘Six Edicts’ of 1776 produced even stronger resistance.
- In preamble, Turgot expressed desire to abolish privilege, tax all and grant every man the right to work without restriction.
- Four of edicts concerned with suppressing dues and offices.
- However, the 2 opposed were the 5th, which suppressed the guilds (to reduce control and increase competition) and the 6th, which abolished the corvée, in favour of a landowner tax.
35
Q
- Why did these reforms face opposition and how was Turgot removed?
A
- Why did these reforms face opposition and how was Turgot removed?
- Paris Parlement presented two remonstrances.
- Turgot’s Six Edicts eventually registered by a Lit de Justice in March 1776.
- However, by then Turgot had offended a wide range of people.
- These included Marie-Antoinette, whose favours to protégés he had opposed.
- In May 1776 he was ordered to send in his resignation, and the edicts were forgotten.
36
Q
- Who was Necker?
A
- Who was Necker?
- Louis took until 1777 to find a suitable replacement for Turgot.
- Appointed Jacques Necker, a banker and former director of the French East India Company.
- A wealthy protestant swiss. His wife Suzanne Curchod became a well-known salonniére.
- He tried to bring about reforms but offended the privileged.
- His Comte Redu caused his downfall in 1781.
- Banished from Paris after writing pamphlets attacking his successor Calonne in 1787.
- Recalled in August 1788, served until 11 July 1789, when his dismissal helped spark the storming of the Bastille.
- He daughter Suzanne married the ambassador of Sweden in 1786.
- She became Madame de Stael, running another influential Salon.
- He had amassed much wealth through speculation in grain and loans to the French Government.
37
Q
- What title was he given, and why?
A
- What title was he given, and why?
- However, couldn’t be controller-general, a protestant.
- That title permitted access to the Conseil-d’Etat, only open to catholics.
- Therefore given the title ‘Director-General’ of finances in February 1777.
38
Q
- How did Necker continue Turgot’s cost-cutting measures?
A
- How did Necker continue Turgot’s cost-cutting measures?
• Necker continued turgot’s cost-cutting measures, by
- Reducing royal household expenses and pensions.
- Appointing salaried officials, rather than venal corporations, to run royal estates.
- Removing the vingtiéme on industry.
39
Q
- How did Necker restructure the royal accounting system?
A
- How did Necker restructure the royal accounting system?
- He also tried to make the royal accounting system more professional.
- Restructured financial administration, reducing number of separate collecting bodies (caisses) and replacing venal accountants with paid secretaries.
- Caisses were the place where government funds were held: in the absence of a state treasury, there were a network of caisses managed by accountants who bought their positions.
- Reduced no. of tax-farmers from 60 to 40.
- Abolished the 48 posts of ‘receivers-general’ of direct taxes, replacing with 12 salaried officials who had to submit their receipts to necker’s own scrutiny.
40
Q
- How did Necker try to given increased power to Third Estate members in the provinces, and why was this opposed?
A
- How did Necker try to given increased power to Third Estate members in the provinces, and why was this opposed?
- In 1778-79, Necker established ‘provincial assemblies’ for Berry and Haute-Guyenne to take responsibility for local administration.
- In these he gave the third estate equal representation to the 2nd and 1st estates combined, and voting was by head.
- This experiment met with opposition from both King and courtiers.
- It was not extended, as Necker had hoped, to all France.
41
Q
- How did Necker reform Venality?
A
- How did Necker reform Venality?
- Necker’s changes certainly helped reduce corruption.
- He hit hard at venality, but in doing so his reforms created another problem.
- Traditionally, it was venal officials who lent money to the crown.
- Their removal removed this vital source of credit.
42
Q
- What was the Comte Rendu au Roi?
A
- What was the Comte Rendu au Roi?
- As part of professionalising the royal accounting system, Necker published France’s first-ever ‘budget statement’ of royal finances in 1781.
- Comte Rendu au Roi (Report to the King).
- Copied British idea of ‘Budget Statement’, summarising expenditure and income.
- Within weeks, 100,000 copies sold.
- It had been suggested that Necker wanted to encourage public debate (or at least intellectual debate).
- However, the king and his courtiers saw this as a breach of royal protocol.
43
Q
- Why was the Comte du Redu inaccurate?!
A
- Why was it inaccurate?!
- Worse still, Necker’s statement grossly inaccurate!
- Necker desperately needed to raise more loans to deal with France’s debt, grown from 1778 significantly.
- Determined to avoid raising taxes, disguised France’s high interest payments as normal expenditure.
- This suggested that France was in a far stronger financial position that was the case.
- The statement appeared to suggest that France had a surplus of 10 million livres rather than a substantial deficit.
44
Q
- Why did Necker fall from power in 1781?
A
- Why did Necker fall from power in 1781?
- Necker was extremely popular with ordinary people of France.
- This was partly due to his attacked on vested interests.
- It was also because he appeared to involve France in a successful war without raising taxes.
- However, he had many enemies at court.
- These included Marie-Antoinette, whose influence on Louis helped bring about Necker’s resignation in 1781.
45
Q
- Who was Calonne?
A
- Who was Calonne?
- Charles de Calonne, much more traditionalist in outlook.
- A lawyer by training, came from the noblesse de robe, which made traditional aristocrats suspicious of him.
- Had been intendant of Flanders in 1778.
- Reform programme of 1787 aroused considerable hostility.
- Blamed for deficit and dismissed from office and exiled to Lorraine in April 1787.
- Spent time in Britain, in 1789 joined émigré group in Coblenz.
- Allowed to return to France by napoleon, died a month later.
46
Q
- How did Calonne initially intend to operate, and why did he swiftly change his mind on getting into office?
A
- How did Calonne initially intend to operate, and why did he swiftly change his mind on getting into office?
- Calonne was ready to support provision of pensions and extravagant public spending (to help maintain confidence). Took office with no plans to tackle the inconsistencies of the Ancien Régime.
- He had opposed Necker’s plans for provincial assemblies.
- However, circumstances forced Calonne to rethink. Loans were drying up, which France was reliant upon.
47
Q
- Why did Calonne worry about obtaining more loans from the Parlement?
A
- Why did Calonne worry about obtaining more loans from the Parlement?
- Paris Parlement became less willing to endorse the borrowing of large sums at high rates of interest, as these would add to France’s crippling rate of debt.
- In December 1785, members of the parlement had to be summoned to Versaille and lectured by the king, before they would give a much-needed loan.
- Calonne therefore feared he wouldn’t get their consent for more borrowing.
48
Q
- What was Calonne’s reform package in 1786?
A
- What was Calonne’s reform package in 1786?
- Consequently, Calonne put a reform package together in 1786.
- This was mostly culled from his predecessors!
- He was forced to do so because of the scale of the debt.
49
Q
- What was the scale of the debt by 1786?
A
- What was the scale of the debt by 1786?
- The estimated income for 1786 was 475 million livres.
- Expenditure was estimated at 587 million livres.
- This gave a deficit of over 100 million livres.
50
Q
- Why did the Comte Redu and Calonne’s lavish spending policies made the crisis worse?
A
- Why did the Comte Redu and Calonne’s lavish spending policies made the crisis worse?
- Both the Comte Redu and Calonne’s own lavish spending policies may have helped precipitate the crisis.
- This is because they both make it appear that crown finances were in good shape.
- This enabled more high interest rate loans, which caused more trouble.
51
Q
- What did Calonne’s reform package include?
A
- What did Calonne’s reform package include?
- A general land tax (and the abolition of the remaining vingtiémes), to be accompanied by a survey and evaluation of land-holdings.
- The establishment of provincial assemblies (to permit the involvement of landowners in the assessment of the new land tax).
- An extra indirect tax on legal documents (stamp duty).
- The end of the corvée royale – to be replaced by a tax on landowners.
- The removal of the controls on the grain trade.
- The removal of internal customs barriers to boost commerce.
52
Q
- Why was it likely that these reforms were going to face serious opposition?
A
- Why was it likely that these reforms were going to face serious opposition?
- These changes were on a major scale, and Calonne probably didn’t see this.
- Introducing a land tax, payable by all, including the church, would strike at the hierarchy of the Ancien Régime.
53
Q
- Why was it decided to put these measures to an ‘Assembly of Notables’?
A
- Why was it decided to put these measures to an ‘Assembly of Notables’?
- Louis was persuaded to back the measures.
- Other ministers (ranging from those supportive of parlements to those trying to uphold traditional aristocratic privilege) opposed them.
- It was decided, to overcome the deadlock, to put the measures to an ‘Assembly of Notables’.
