Dire Financial Situation Of The French Government example essay topic

Long-term government financial chaos played a lead role in the cause of the French Revolution. This point is supported by William Doyle, in Origins of the French Revolution. Government debt and lack of available funding seriously deteriorated authority and credit, leading to extreme measures in taxation, thereby acting as a catalyst of the French Revolution. Doyle makes his point by arguing that France was approaching a state of fiscal ruin as far back as August 20, 1786, indicating that "Calonne, comptroller-general of the royal finances, first came to Louis XVI and informed him that the state was on the brink of financial collapse", at that time. (p. 43) Although Doyle enforces the point that there are no concrete records to support the state of the government at that time, there are figures derived by Calonne, after extensive research on his part, that present the dire financial situation of the French government.

The evidence shows a debt of approximately a quarter of the annual revenue, steadily rising, through increased short and long term loans. (p. 43) Debt was not a new problem for France around the time of the Revolution. According to Doyle, previous wars and conflict left the government finances in serious trouble. Expenditures grossly outweighed revenue. In an attempt to rectify the situation, proposals were put in place to save money, however, debt reduction was seemingly impossible and reduction in armed forces funding would put France's stability at risk. Taxation appeared to be the only release from debt, therefore, there were substantial rises in direct and indirect taxation. The problem with that solution was that all that could really be done was to "redistribute the burden so that it fell more equitably and was levied with more accuracy". (p. 46) Bankruptcy might have been an option for France, but to declare such a thing would put the creditability of the government at risk.

In order to maintain the ability to borrow funds and retain the honor of a stable government, Doyle points out that France could not embark upon this option at that time. A banker, Necker, gained control over royal finances in 1777. He was able to raise funds from a variety of sources, and thereby was able to "finance a major war without any new taxation". (p. 49) The problem here was that so much had been borrowed that when Calonne took over financial control he found no funding and low stocks. In order to preserve the royal reputation and prevent a public concern, what money there was, was spent on lavish unnecessary items and new projects. Calonne proceeded to borrow even more money, further increasing a potentially devastating situation. Doyle points out that Calonne may have realized the terrible financial situation had the king created a central treasury and formal records and accounts.

By the time Calonne could compile and report on the royal financial state, it was far too late for repair. In thorough agreement with Doyle's points on the dismal financial status of France's governing institution, I believe this created an uprising of turmoil and discontent among social classes. Attempts at absolutism by the monarchy were to impose a series of new and increased taxes on nobility. Charles Alexandre de Calonne had called an Assembly of Notables in 1787 in an attempt to induce the privileged classes to share in the financial burden.

They refused, however, to participate, declaring the taxation to be unfair, and leaving a very financially unstable government to fend for itself. The only successful taxation was on the peasantry, but because of poverty, that effort brought in the least amount of revenue. France was a rich nation, so to speak, but with a very impoverished government. This triggered prolonged differences between the bourgeoisie and the aristocracy, leading to upheaval, discontent, and distrust in the government that reigned over them. Supporting this point is the fact that the king was supposed to be the ultimate authority, an absolute power, able to control a multitude of situations and maintain a balanced economy. Even with advisement and assistance from those with expertise, people directed to solve and prevent royal financial strain were unable to follow through.

As the government's debt grew, its reputation diminished, its people's morale fell, and the classes found themselves pitted against each other. Initially preventing the debt may not have prevented the revolution, but by eliminating this major catalyst, the chances for negotiations and ease of political change would have been stronger. In order for this prevention to have occurred, the king would have needed to initiate and either plan or appoint knowledgeable advisors to create an official budget and loan management program. As Doyle pointed out, the king had no plan for this initially, as Calonne had found when trying to assess the royal debt. Without knowing the true instability of the royal finances, Calonne and his predecessor, Necker, borrowed endless amounts of money, only to borrow more to pay off previous loans. As more money was borrowed, the royal creditability lessened and therefore higher interest was imposed upon the government.

Fewer and fewer countries and organizations agreed to assist the royalty of France, putting France in a weak position of requiring to declare bankruptcy for lack of other positive options. Since the government was not about to put itself in such a disrespecting position, it instead sunk deeper and deeper in debt, leaving no funding for necessary expenditures. In full agreement with Doyle, I strongly conclude that the financial situation the French royalty found itself in helped to catapult the French Revolution for a multitude of reasons. First, the increase of loans and assistance in the American Revolution put the French economy at a low. Installing increased taxation left the peasantry even more impoverished than ever and insulted the nobility, who refused to assist in the debt reduction effort.

By implementing a strong bookkeeping and debt management plan, the king could have prevented a terrible financial ruin. In Necker's interest to sort out financial difficulties, many loans were established, so that when Calonne gained control, there were no available funds to support government interests. Calonne also took out loans, mainly to pay off older debts, but eventually leading to a formidable financial reputation. By the time of the revolution, the government of France was in a horrific state of disrepair, leaving itself vulnerable and disreputable, and ultimately a major cause of the French Revolution.