1. The Financial situation
Matthews
The Financial situation

2. Clarification point
Economy – how your country makes money – agriculture /industry
Fiscal Policy – how your country runs its economy – capitalism/communism
Finance – stream of money to fund something
Capital – the first investment of money for a project
Budget – choice of where the money goes
Deficit – debt/lack of money/finance
Surplus – more money than you expected

3. How do states gain money or income to run on?
TAX!!
Income tax – tax on what comes in
Customs and tariffs – money on exported and imported goods
Borrowing /loans – usually charged interest.

4.
France was defeated by Britain in the ‘Seven Years War’ in various places around the world.
Significance? – loss of territories that provided cheap resources
- expense of fighting war (army and navy)
- humiliation of defeat with arch enemy
- King wants to get even so keen to fight again!
-needs to spend more money on army and navy to improve it so they don’t lose again
Result =DEBT and potential for more DEBT

5. The Plan to get the army and navy back up to scratch
Maximise revenues, i.e. LETS RAISE TAXES!!!
Reform the system of collecting taxes so it works better. (Britain is doing alright…)
To change the tax the King had to get the agreement of the Nobles and Clergy in the PARLEMENTS. Guess what they said!! They claimed to represent the liberties of the nation against the King imposing more taxes for the war effort.
In the background everyone was suffering economically because of bad harvests and industrial depression. No wants higher taxes.

6. What did Louis XV do?
Trim the power of the Parlement so they would not stop him
Try to reform the tax system.
1770 – Edicts issued to prolong the special war taxes
The vingtieme was a wartime extraordinary tax.
Ministers said the tax should be paid even if the Parlement didn’t agree!
Parlement was furious! Parlement was exiled!!!

7. So Louis XV did not do nothing, his ministers tried to reform the tax system. But he was hated.
Renegotiation with tax farmers
Reduction of venalities
RESULT
The King was very unpopular. People did not like his reforms.

8. Louis XVI came to the throne in 1774
The reforms were reversed
The Paris Parlement was restored
1776 Turgot the Controleur General – chief financial minister
Tried to introduce reforms, get rid of venalities, pressure of the Farmer General (tax farmers), abolish guilds to increase food supply.
They were good ideas but Louis did not support Turgot and the reform ideas collapsed.

9. 1776 – American War of Independence
France decided to support the Americans against Britain.
1778 when this happened France was nearly bankrupt.
Jacques Necker was employed to fix the finances.
Necker had great contacts in Geneva and raised 150 livres in loans, he restricted decadence in the courts and stopped the venalities. He published the accounts of France for all to see. Compte Rendu (Transparency!!)
It looked like France had a surplus! He had some support from the King.

10. Necker was very unpopular with French Ministers of the Crown.
He was protestant – didn’t help in a very Roman Catholic country
He wanted to stop the vingtieme they didn’t
They thought it was embarrassing for the King to publish his finances
In 1781, with Marie- Antoinette’s encouragement he sacked Necker!!

11. Now what? Thanks to Necker there was a little short term credit
But the debts were still mounting
Interest was 41% of the expenditure. Expenditure was greater than income.
Calonne was appointed and tried to keep the loans coming, he paid interest promptly and encouraged building projects to stimulate the economy.

12.
Credit dried up
Calonne pointed the finger at Necker and said he lied about the accounts
Calonne looked for radical desperate reform to help they were facing bankruptcy
He suggested the Second Estates should pay taxes!!!!! Ouch!
Calonne called the Assembly of Notables to agree to this.

13. February 1787 – Assembly of Notables
Assembly of Notables - guess what they said.
They argued they did not have the right to agree to such fundamental reforms only the Estates General could do that.
Calonne was dismissed

14. Enter Brienne. The Assembly still did not agree
Credit was less available because now everyone knew how bad the accounts situation was
Bad harvests occurred in 1786
The Eden Treaty with Britain was damaging for France and undermined the tax collection
Brienne tried to reintroduce Calonne’s idea
The Paris Parlement said NO!!

15. BANKRUPCY WAS IMMINENT 1787 November
Paris Parlement refused to register any changes
They insisted on calling the Estates General
August the Paris Parlement was exiled for their obstructiveness!
The Public grew more hostile
The King was forced to recall the Parlement because there was no more money left and promise to call the Estates General
NOVEMBER the king met the Parlement in a royal session. He wanted a 5yr loan. When the Parlement prevaricated he issued a lit de justice – ie you have to do what I say!!

16. Protests begin in 1788
May 1788 the Parlement issued ‘Fundamental Laws’ of the Kingdom.
Give examples
The King ordered reform of the Parlement.
Provinces around France had riots (Grenoble – the Day of the Tiles)
The Assembly of the Clergy backed up the Parlement. It condemned the reforms and voted a very small Don Gratuit This was called the revolt of the Nobles.
See p19 what was the significance?

17. August 1788 the Treasury was empty
The King was forced to recall Necker and call the Estates General immediately not sometime before Things were dire.
The Paris Parlement re-entered Paris in triumph
Brienne’s likeness was burnt
Everyone was agreed that the King was out of order. All the Estates were cross with him.

18. Voting at the Estates General
Paris Parlement said the voting must be the same as in That would guarantee…
The Third Estate were furious. The Parlement was clearly not acting for the nation but protecting its own vested interests and privileges.
Pamplets and Salons hosted a huge debate.
Liberal nobles and Bourgeois leaders argued…
The King could have allied with the Bourgeois Third Estate members against the nobles
Brienne had been in favour of this.

19. But Louis and Necker – hesitated and asked the Assembly of Notables
But Louis and Necker – hesitated and asked the Assembly of Notables!! Guess what they said!
It was agreed to double the representation, but it was not clear how the vote would proceed
Cahiers were continued raising aspirations and expectations of redress
The harvest of 1788 was a disaster – why?
April riots broke out in …
The Third estate refused to register their representatives separately
For 7 weeks nothing happened!!

20. The King’s son had died and he was in mourning
June – the Third estate invited the other 2 estates to join them.
Some clergy joined but no nobles
17 June – Third Estate said it was the National Assembly!! It was claiming sovereignty and asked the others to join them.
19 June the clergy voted to join
Necker said hold on, you better call a Royal Session and make concessions or you are going to lose control.
20 June troops excluded the Third Estate from their usual meeting place…why?

21. Tennis Court Oath – give details
23 June king outlined reforms, but allowed the nobles a veto. They were told to meet separately
Third Estate stood firm
27 June – the Louis admitted defeat – he ordered all estates to meet together
Troops began to gather around Paris.
what do you think the new National Assembly thought was going to happen?
Necker was dismissed on 11 July – people assumed…

22. Disorder!!
The Paris Bourgeoisie form a provisional municapal authority
And police force!
Guardes Francais – what is this? What did they do it for?
Camille Desmoulins exacerbated things because he…

23. Bastille Day – July 14th 1789 Why there? What was there in fact?
Was there bloodshed?
Louis’s response was…
What was the state of the country?

24. Significance/effects of the fall of the Bastille
Necker was reinstated
Louis had to appear with what…? Why important
What was secured?
What was the Paris Commune?
What happened across France?
Why?
What did the peasants believe?

25. The Great Fear or Grande Peur
What happened in it
When most intense?
Result was

26. 4 August, ‘August Decrees’
What were these and how genuine were they?
Give examples
26 August ‘ Declaration of the Rights of Man and the Citizen’.
Ancien Regime was dismantled
King’s authority curtailed
Democratic rights had prevailed
Privileges overturned
New constitution was planned
The declaration was the founding of a new order.