Flashcards in Economic Problems & Royal Finance Deck (15):
What were some signs that French economy was thriving in the first half of the 18th century?
- France was large and there was a rapid growth in population from the late 1730s.
- France was united and politically stable, was a greater power than Spain.
- France had a lot of land suitable for farming. (Created a rising demand).
What happened regarding trade in the mid 17th Century?
Trade with the colonies quadrupled, making trading ports very prosperous.
What were some economic problems in the 1770s and 80s?
- Food production could not keep up with the population growth. Rural overpopulation.
- The state imposed many regulations on the domestic economy. (Set requirements for production).
- France lacked a network of rivers and canals to carry goods, especially grain.
- In 1780s there was a decline in France's textile industry in the face of British competition.
- A series of bad harvests and winters from 1785-9.
How was government financed?
From direct and indirect taxation.
What was the don gratuit?
A 'voluntary gift' paid by the church every five years.
Amounting to approximately 2% of Church's total revenue.
Who collected indirect taxes?
At times of heavy expenditure, what did the government have to rely on?
Loans which built up into substantial royal debt
When Louis XIV died in 1715, what was Frances National Debt?
2 billion livres
(150 million pounds)
What is a balance of payments crisis?
When someone is spending more (outgoings) than they earn (revenue).
What was the controller-general?
Title taken by the minister in charge of finances in France between 1661-1791
What active measures did Turgot take in 1774-6?
- Cuts to royal expenses
- Demand that government departments submit their expenses to the Controller General and find ways of reducing their spending
- The removal or reduction of a number of pensions
- Some reforms of the tax farming system to increase efficiency
What ideas of Turgot were opposed?
- His idea of replacing indirect taxes with a property tax
- His idea of establishing free trade in grain, ending tolls and price controls
- His 'Six Edicts' of 1776, expressed the desire to abolish all privilege and to tax all
How did Necker continue Turgot's cost cutting measures from 1777-81?
- He reduced royal household expenses and pensions
- He appointed salaried officials to run the royal estates
- He removed the vingtiéme on industry
Who was the most popular Controller-General in the 1770s-80s?
Necker was extremely popular with the ordinary people in France.
- Partly for his attacks on vested interests
- Partly because he involved France in a successful war without raising taxes