finacial and economic policies new Flashcards
(27 cards)
Economic Problem - Thermidorian government
Thermidorian attempt to switch from a system of economic control to a liberal environment caused acute inflation.
Economic Problem - Poor harvest
1795 poor harvest meant many people were poor and could not afford food.
Economic Problem - Trading
Trading situations were compromised due to instability and inflation.
Economic Solution - Standardisation of weights and measures
In 1795, weights and measures were standardised.
Economic Success - Grain prices
Brought the price of grain down, with the help of better harvests in 1796 and 1798.
Financial Problem - Assignat value
Excess printing of assignats brought them down to 1% of face value, making them worthless.
Financial Problem - Inflation
Thermidorian attempt to switch to a liberal economy caused acute inflation.
Financial Problem - Unbalanced budget
Inherited a badly unbalanced budget, made worse by the cost of war and inefficient tax collection.
Financial Problem - National debt
National debt was very high due to war and poor fiscal management.
Financial Problem - Government revenue
Government revenue was very low because of poor tax collection.
Financial Solution - Mandats
Introduced mandats: 800 million francs worth of mandats issued to replace 24 billion francs of assignats.
Financial Solution - Metal coins
Metal coins became the legal currency.
Financial Solution - Partial return to natural economy
Partial return to a natural economy in 1797.
Financial Solution - Control currency
The Directory attempted to control the currency.
Financial Solution - Debt conversion
In September 1797, Ramel (Minister of Finance) wrote off 2/3 of internal debt, replacing it with non-interest-bearing bonds to buy land.
Financial Solution - Direct taxation
- In 1799,
- Ramel introduced 4 direct taxes:
- tax on trading licences,
- land tax, tax on movable property
- tax on windows and doors.
Financial Solution - Central tax collection
Method of collecting direct tax was changed to central control where the Directors appointed commissioners to assess and levy taxes.
Financial Success - Mandats
Mandats were rapidly counterfeited, lost value quickly (5% face value) and ceased to exist in February 1799.
Financial Success - Payment system
Directories and deputies refused to accept cash payments, instead accepted grain as it was the only worthy thing.
Financial Success - Barter system
A barter system emerged, which created an unbalanced trade system.
Financial Success - Inflation halted
Inflation was halted, but the lack of coinage due to émigrés leaving with it brought about deflation.
Financial Success - Deflation consequences
Deflation made the Directory unpopular with businessmen as lower prices meant lower profits.
Financial Success - Circulation
In 1797, only 1 billion livres were in circulation compared to 2.5 billion in 1789.
Financial Success - Legacy
Directory’s financial reforms laid the groundwork for the Bank of France established by Napoleon in 1800.
