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A-Level AQA History French Revolution Chapter 3 summary
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Chapter 3: Economic problems and royal financeThe economy
There were many signs of a thriving economy in France in the first three quarters of the 18 th century.
France was large and a rapid growth from the late 1730s meant it had a population of 27 million by the
1780s (compared with 21.5 million in 1700). This was more than three times the population of GB.
There were 600,000 people living in Paris in filth, misery and stench (especially bad when considering
the King and Queen and their lavish lifestyle at Versailles).
20,000 people died a year, and the life expectancy was 23 (for an average labourer)
2% of France were nobility
While neighbouring Italians and Germans were politically fragmented, France was united and politically
stable and reaped the benefit of Spain’s decline as a great power.
France had a lot of land suitable for farming. With prices for agricultural goods rising because of
demand, large landowners did well, and some increased the income from their lands
From the 1730s, France had followed Britain’s lead in improving agricultural techniques, such as crop
rotation and the use of fertilisers, although this was not common everywhere. The cultivation of
(American) maize and potatoes expanded.
Between 1715 and 1771, French commerce increased almost eight-fold, making France second only to
GB in trade
Trade with the colonies quadrupled, making trading ports very prosperous. Marseilles boomed n trade
with Levant, Nantes and Le Havre with the French West Indies. Bordeaux thrived on handling goods to
and from Spain. Merchants grew rich from the slave trade and the import of cotton, indigo, coffee and
sugar which they re-exported across Europe.
Transport was improving. In the 1760s, the 1000 kilometres between Paris and Toulouse took 15 days;
by the 1780s, it took 8 days. Visitors commented on the quality of French roads (maintained by the
corvée royale).
Industrial production doubled between 1715 and 1771; mining, metallurgy, and textiles (in particular
printed fabrics) did well. Mechanisation was introduced and some factories appeared.
Paris became France’s centre of banking. The Caisse d’Escompte was founded in 1776 to discount bills of
exchange. These helped trade by offering ready cash for a bill, so that the trader did not have to wait for
payment.
However, there was also economic problems, and these grew worse in the 1770s and 1780s
The French economy was predominantly agricultural: only 15% of the population lived in localities of
more than 2000 inhabitants. However, it remained backwards compared to Britain or the Dutch
Republic (or the United Provinces). This was partly because of the seigneurial arrangements and partly
because, with a rise in population, farming families were diving land between sons. This reduced the
size of holdings to below the level of self-sufficiency
The yield from French farms was very law, there was rural overpopulation and the highly taxed
peasantry persisted with backward agricultural practices. Food production could not keep up with
population growth.
The state imposed many regulations on the domestic economy. It often set requirements for production
quality and limited industries to certain cities. There were also international trade barriers.
There were variations in weights and measures across the country. It has been estimated tht there were
25,000 different units of measure in France before 1789. They varied from town to town and 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.
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.
The French banking system was not advanced. A borrowing scheme using paper money had been
initiated by John Law at the beginning of the 18th century but had collapsed. This had led businessmen
and traders to fear paper notes, as opposed to metal currency. So raising capital was not easy (and
aristocrats were traditionally uninterested in this anyway
There was a downturn in the 1770s; the failure of the vintage of 1778 was followed by a series of poor
harvests and disastrous winters from 1785 to 1789 which depressed peasant’s 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
France had been involved in the Seven Years War from 1756 to 1763
Royal finance
, Government was financed from direct and indirect taxation, supplemented by ‘temporary expedients’ such as
loans or sales of office to meet the shortfall between income and expenditure. Traditionally, the main direct tax
was the taille personelle (paid in the estimated annual value of possessions), but in some areas this was
calculated slightly differently and was known as the taille réelle. 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 vingtième (a 5% levy). These taxes were collected by royal officials (officiers) but some of the pays
d’états paid their taxes as a reduced taxable income considerable; the Church only offered the Crown a ‘don
gratuit’, a self-calculated lump sum which bore little relation to the wealth of its lands.
There were also many indirect taxes on goods and services, which were collected by tax farmers and
syndicates. However, accounting procedures were limited and there was widespread corruption. There was no
central treasury or bank, and 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.
Government was therefore increasingly forced to rely on loans, particularly at times of heavy expenditure, such
as during a war. Interest had to be paid on these loans, and they built up into a substantial royal debt
Direct taxes Indirect taxes
Taille Gabelle
The taille was a tax on property and income of the The gabelle was the salt tax. It was collected by the
third estate. It was divided into taille personnelle ferme générale.
(property/revenue/personal tax) and taille réelle Tabac
(land and house property or household, applicable in The tabac was the tobacco tax, also collected by the
Languedoc, Provence, Guyenne and Dauphiné) ferme générale.
Aides
The aides represented a consumption tax on
soncumer goods, such as wine, liquor, oil, textiles,
tallow, iron, wood, livestock, playing cards, hides,
soap, and paper. Aides were collected by the régie
générale.
Capitation (poll tax) Domaine
The capitation was theoretically payable by everyone The domaine compromised taxes on the Crown lands
by the clergy paid the don gratuit instead and second (known as the ‘royal domain’). These were collected
estate payments varied depending on rank, status, by the régié Générale and overseen by the Chambre
occupation, and property. There were 22 different des Comptes (Chamber of Accounts)
tax classes Traite
Vingtième (income tax) The traite was customs duty collected by the régie
The vingtième was a direct tax of 5% of earnings générale
from land, property, commerce, industry and official Timbre
offices. Although it was intended to be levied on all, The timbre was the stamp tax, levied on legal
the clergy won exemption, the pays d’états won transactions and collected by the régie générale
reduced rates and the parlements resisted new Octrois
assessments of income Octrois were local customs duties on good that were
brought into towns (customs).
Royal debt
When Louis XVI dies in 1715, France already had a national debt of 2 billion livres (c£150 million). The annual
interest payments on this debt (165 million livres) were more than the government collected in taxes. This
produced a severe balance of payments crisis.
The wars of the 18th century had continually added to French debt. The War of the Austrian Succession (1740-
48) was closely followed by the Seven Years War (1756-63) which cost around 1.3 billion livres and ended with
disastrous economic loss of all French colonial possessions in North America. By 1764, France was 2.3 billion
livres in debt.
The French economy was therefore in a state of crisis when Louis XVI came to power in 1774. Louis increased
this debt further when he chose, in 1778, to side with the American revolutionaries in their War of
Independence against Britain, at the same time as income was hit by the economic depression. The Treaty of
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