Attempts at financial reform 1786-1789

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  • Created on: 07-04-18 08:50
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  • Attempts at financial reform 1786-1789
    • 1781: Necker dismissed
      • Successor Joly de Fleury discovered the true nature of France's finances
        • The Treasury was 160 million livres short for 1781
        • The Treasury was 295 million livres short for 1782
        • Fleury and Calonne attempted to undo Necker's work
          • Resumed venality
          • Borrowed much more heavily than Necker
    • August 1786: The government was verging on bankruptcy
      • Revenue was 475 million livres, expenditure was 587 million livres
        • A deficit of 112 million livres
      • The deficit increased to 126 million livres in two years
    • Reasons for the deficit
      • War
        • 1740-1783: France was at war for 20 years
          • War of Austrian Succession (1740-1748)
          • Seven Years War (1756-1763)
          • American War of Independence (1778-1783)
            • Cost 1,066 million livres
              • Achieved through Necker raising loans rather than taxes
                • Lack of an elected parliament to guarantee loans did not give lenders confidence
      • Tax
        • The Crown was not receiving much of the money collected in taxes
          • Tax farming was inefficient
          • Many tax collectors had bought their positions through venality
            • Could not be dismissed
              • Could overtly manipulate the taxation system to their own benefit
    • 1786: Calonne's reform plan
      • Replace the capitation and the vingtieme on landed property by a single land tax
        • Universal
      • Stimulate the economy to ensure future tax revenues would increase
        • Abandon controls on the grain trade
        • Abolish internal customs barriers
          • Prevented the free movement of grain
      • Restore national confidence to secure new loans
        • Achieve some display of national unity and consensus
      • Failure
        • Should have called the Estates General
          • Deemed too unpredictable
          • Instead called the handpicked Assembly of Notables
            • Anticipated to be a pliant body who would easily agree to the reforms
            • Met February 1787
              • They would not collaborate with Calonne and Louis in agreeing the reforms
                • They had the most to lose as members of the privileged order
                • HOWEVER: They did agree that taxation should be extended to all
                  • Argued that new taxes could only be approved by a representative body
                    • The Estates General
    • The political crisis 1787-1788
      • 1787: Calonne replaced by Brienne (Notable)
        • The Assembly of Notables was no more cooperative with Brienne
      • 1787: Brienne's reform plan
        • Universal land tax
        • Ending of venal financial officials
        • Create a central treasury
        • Create a concrete and accessible set of laws
        • Reform education
        • Introduce religious tolerance
        • Create a more efficient armed forces
        • The Parlement of Paris refused to approve the reforms
          • Said that only the Estates General could consent to any new taxes
          • 15 August 1787: Louis exiled the Parlement to Troyes
            • Considered to be high handed and led to an aristocratic revolt
              • Riots in some of the provincial capitals where the parlements met
                • E.g. Rennes in Brittany and Grenoble in Dauphine
              • Nobles met in unauthorised assemblies across the country
                • Discussed action in support of the parlements
              • An assembly of clergy joined in on the side of the parlements
                • Breaking its long tradition of loyalty to the Crown
                • Condemned the reforms
                • Voted a don gratuit of less than a quarter the size requested by the Crown
              • HOWEVER: Opposition was fragmented and dispersed
    • August 1788: The royal treasury was empty
      • The Estates General was summoned for 1 May 1789
        • Navy minister, Marquis de Castries
          • "As a Frenchman I want the Estates General, as a minister I am bound to tell you that it might destroy your authority."
      • 16 August 1788: Brienne suspended all payments from the royal treasury
        • Acknowledging that the Crown was bankrupt
    • September 1788: Louis was forced to allow the Paris parlement to return
      • Brienne resigned
        • Louis recalled Necker
          • Abandoned reform plans
          • Would raise new loans
          • Would not do anything until the Estates General had met
    • Impact of the political crisis
      • Showed the limitation of royal power
        • Although Louis was the absolute ruler, he could not impose reforms on the State
      • The forces of opposition detected clear signs of weakness in the Crown
      • The failure to secure reform contributed to a paralysis of the government
      • Short term: Very signficant

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