Financial Crisis in France: Key Events
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Questions and Answers

What year did Necker resign after being rejected by Louis XVI?

  • 1788
  • 1781 (correct)
  • 1776
  • 1786

    • Calonne presented his Plan for the Improvement of the Finances in August 1786.

    True

    How much did Necker borrow from 1777 to May 1781?

    520 million livres

    The government's declaration of bankruptcy occurred on ______.

    <p>16th August 1788</p> Signup and view all the answers

    Match the following financial figures to their corresponding years:

    <p>377 million livres = 1775 411 million livres = 1775 112 million livres = 1786 633 million livres = 1788</p> Signup and view all the answers

    What percentage of the annual budget was spent on servicing the national debt in 1788?

    <p>41.2%</p> Signup and view all the answers

    The total expenditure in France rose from 182 million livres in 1726 to 633 million livres in 1786.

    <p>False</p> Signup and view all the answers

    What was the total revenue of the state in 1775?

    <p>377 million livres</p> Signup and view all the answers

    The massive hailstorm that destroyed the grain harvest occurred on ______.

    <p>13th July 1788</p> Signup and view all the answers

    What was one of Necker's significant reforms regarding venal positions?

    <p>He abolished 386 venal positions in taxation and finance.</p> Signup and view all the answers

    The state revenue in 1775 was greater than the expenditure.

    <p>False</p> Signup and view all the answers

    What was the total amount of money borrowed by Necker between 1777 and May 1781?

    <p>520 million livres</p> Signup and view all the answers

    By 1786, the deficit was ______ million livres.

    <p>112</p> Signup and view all the answers

    Match the financial outcomes to the corresponding figures:

    <p>State revenue in 1775 = 377 million livres Expenditure in 1788 = 633 million livres Total deficit in 1786 = 112 million livres Savings from abolishing positions = 2.5 million livres</p> Signup and view all the answers

    Who succeeded Necker as a minister after his resignation in May 1781?

    <p>Joy de Fleury</p> Signup and view all the answers

    The government declared bankruptcy on 16th August 1788 due to insufficient funds.

    <p>True</p> Signup and view all the answers

    What percentage of the annual budget was allocated to servicing the national debt in 1788?

    <p>41.2%</p> Signup and view all the answers

    The hailstorm that devastated the grain harvest occurred on ______.

    <p>13th July 1788</p> Signup and view all the answers

    What was the total amount of expenditure in 1788?

    <p>633 million livres</p> Signup and view all the answers

    The state revenue in 1775 exceeded the expenditure by 34 million livres.

    <p>False</p> Signup and view all the answers

    What was one of the actions taken by Necker regarding venal positions?

    <p>Abolished 386 venal positions in taxation and finance.</p> Signup and view all the answers

    The government declared bankruptcy on ______.

    <p>16th August 1788</p> Signup and view all the answers

    Match the following individuals with their actions:

    <p>Necker = Abolished venal positions Calonne = Presented financial plan Brienne = Resigned in August 1788 Joy de Fleury = Raised taxation</p> Signup and view all the answers

    How many livres were left in the treasury in August 1788?

    <p>400,000 livres</p> Signup and view all the answers

    By 1786, the financial deficit was 112 million livres.

    <p>True</p> Signup and view all the answers

    What caused a significant drop in the grain harvest around Paris in July 1788?

    <p>Massive hailstorm</p> Signup and view all the answers

    The expenditure of France in 1775 was ______ million livres.

    <p>411</p> Signup and view all the answers

    What financial action was taken by Necker regarding the royal household?

    <p>Abolished 506 venal positions</p> Signup and view all the answers

    By 1786, the financial deficit reached 112 million livres.

    <p>True</p> Signup and view all the answers

    What was the total state revenue in France for the year 1775?

    <p>377 million livres</p> Signup and view all the answers

    In August 1788, only ______ livres were left in the treasury.

    <p>400,000</p> Signup and view all the answers

    Match the following events with their corresponding dates:

    <p>Massive hailstorm destroys grain harvest = 13th July 1788 Brienne resigns = 24th August 1788 Necker's Compte Rendu Au Roi = February 1781 Louis XVI is presented with Calonne's Plan = 20th August 1786</p> Signup and view all the answers

    What percentage of the annual budget was allocated to servicing the national debt in 1788?

    <p>41.2%</p> Signup and view all the answers

    The government suspended all payments to the bureaucracy before declaring bankruptcy.

    <p>True</p> Signup and view all the answers

    What significant reform related to taxation did Necker implement?

    <p>Abolished 386 venal positions in taxation and finance</p> Signup and view all the answers

    The total expenditure in France rose from 182 million livres in 1726 to ______ million livres in 1788.

    <p>633</p> Signup and view all the answers

    What was a consequence of Necker's abolition of venal positions in taxation and finance?

    <p>Reduction in expenditure by 2.5 million livres</p> Signup and view all the answers

    The state revenue in 1775 was greater than the expenditure.

    <p>False</p> Signup and view all the answers

    How much had France's total expenditure risen to by the year 1788?

    <p>633 million livres</p> Signup and view all the answers

    In August 1788, only ______ livres were left in the treasury.

    <p>400,000</p> Signup and view all the answers

    Match the financial actions to the corresponding figures.

    <p>Necker's borrowing between 1777 and May 1781 = 520 million livres Deficit by 1786 = 112 million livres Total revenue in 1775 = 377 million livres Expenditure in 1775 = 411 million livres</p> Signup and view all the answers

    Who was appointed after Necker and raised taxation?

    <p>Joy de Fleury</p> Signup and view all the answers

    A massive hailstorm in July 1788 improved the grain harvest around Paris.

    <p>False</p> Signup and view all the answers

    What was the primary financial issue facing France by 1788?

    <p>Bankruptcy</p> Signup and view all the answers

    In 1788, ___________ percent of the annual budget was spent on servicing the national debt.

    <p>41.2</p> Signup and view all the answers

    What was the main effect of Necker abolishing venal positions in taxation and finance?

    <p>Saved the crown about 2.5 million livres a year</p> Signup and view all the answers

    The total expenditure in France in 1788 was lower than that in 1726.

    <p>False</p> Signup and view all the answers

    What percentage of the annual budget was allocated to servicing the national debt in 1788?

    <p>41.2 percent</p> Signup and view all the answers

    Total state revenue in 1775 was ______ million livres.

    <p>377</p> Signup and view all the answers

    Match the following events with their corresponding dates:

    <p>Necker's abolition of venal positions = 1776 Calonne's financial plan presentation = 1786 Brienne's resignation = 1788 Declaration of bankruptcy = 1788</p> Signup and view all the answers

    What major action did Louis XVI take after Necker resigned?

    <p>Appointed Joy de Fleury as a new minister</p> Signup and view all the answers

    Necker borrowed a total of 520 million livres with high interest rates from 1777 to May 1781.

    <p>True</p> Signup and view all the answers

    What caused the dramatic financial issues leading to the government's suspension of all payments in August 1788?

    <p>A massive hailstorm that destroyed the grain harvest.</p> Signup and view all the answers

    There were ______ livres left in the treasury in August 1788.

    <p>400,000</p> Signup and view all the answers

    What was the primary action taken by Necker regarding venal positions?

    <p>He abolished several venal positions.</p> Signup and view all the answers

    By 1786, France had a financial surplus.

    <p>False</p> Signup and view all the answers

    What major event in July 1788 significantly affected the grain harvest in Paris?

    <p>A massive hailstorm</p> Signup and view all the answers

    In August 1788, the treasury had only ______ livres left.

    <p>400,000</p> Signup and view all the answers

    Match the following actions with their outcomes:

    <p>Necker's reform of venal positions = Savings of about 2.5 million livres annually Suppression of government payments = Declaration of bankruptcy Brienne's increase in taxation = Revenue boost of 252 million livres Calonne's financial plan = Proposal for fiscal improvement</p> Signup and view all the answers

    What percentage of the annual budget was allocated to servicing the national debt in 1788?

    <p>41.2%</p> Signup and view all the answers

    The total state expenditure rose from 182 million livres in 1726 to 633 million livres in 1788.

    <p>True</p> Signup and view all the answers

    Who was appointed after Necker and was known for raising taxation?

    <p>Joy de Fleury</p> Signup and view all the answers

    Between 1777 and May 1781, Necker borrowed ______ million livres.

    <p>520</p> Signup and view all the answers

    What was one of the financial actions taken by Necker regarding venal positions?

    <p>Abolished venal positions in taxation and finance</p> Signup and view all the answers

    The total expenditure in France decreased from 1726 to 1788.

    <p>False</p> Signup and view all the answers

    What was the primary financial issue facing France by 1788?

    <p>Deficit in budget</p> Signup and view all the answers

    In August 1788, ______ livres were left in the treasury.

    <p>400,000</p> Signup and view all the answers

    Match the financial figures to the corresponding events:

    <p>State revenue in 1775 = 377 million livres Total expenditure in 1788 = 633 million livres Deficit in 1786 = 112 million livres Revenue in 1775 = 34 million livres more than expenditure</p> Signup and view all the answers

    What was the immediate consequence of the massive hailstorm in July 1788?

    <p>Decrease in grain harvest</p> Signup and view all the answers

    Brienne assumed the role of minister after Necker resigned.

    <p>True</p> Signup and view all the answers

    How much did Calonne present as his Plan for the Improvement of the Finances?

    <p>Unknown amount</p> Signup and view all the answers

    By 1786, the deficit was ______ million livres.

    <p>112</p> Signup and view all the answers

    Study Notes

    Financial Crisis in France

    • Turgot's dismissal: In 1776, the finance minister Turgot was dismissed.

    • Necker's Reforms: Jacques Necker, Turgot's successor, aimed to reduce government spending. He abolished numerous venal positions in the royal household and taxation, saving approximately 2.5 million livres annually. He also restructured the management of postal and transport systems and the sale of timber from royal estates.

    • Debt Accumulation: Despite reforms, Necker resorted to borrowing to cover the expenses, accumulating over 520 million livres in debt between 1777 and 1781. The high interest rates on these loans increased the financial burden on the state.

    • Compte Rendu Au Roi: Necker presented his financial report to the King in February 1781, but was dismissed in May when the King rejected his role as minister.

    • Restructuring and War: His successor, Joy de Fleury, attempted to address rising costs by increasing taxation by 252 million livres. The War of American Independence had cost France over 1 billion livres.

    • Budget Imbalance: In 1775, France had a revenue of 377 million livres but expenditures exceeded this at 411 million, resulting in a significant deficit. More than 37% of the revenue was allocated towards debt repayment.

    • Growing Deficit: By 1786, the deficit had reached 112 million livres, nearly a quarter of the total income.

    • Calonne's Plan: In 1786, Charles Alexandre de Calonne proposed a plan for financial improvement to Louis XVI.

    • Natural Disaster and Financial Collapse: A massive hailstorm in 1788 significantly impacted the grain harvest near Paris, compounding the financial crisis. The government, facing bankruptcy, suspended all payments to the bureaucracy and army. France was forced to declare bankruptcy.

    • Brienne's Resignation: Finance Minister Brienne resigned in August 1788.

    • Escalating Expenditures: France's total expenditure had increased from 182 million in 1726 to 633 million in 1788. By 1788, a significant portion of the budget (41.2%) was dedicated to servicing the national debt.

    • Financial Crisis Deepens: In August 1788, the treasury had only 400,000 livres left, highlighting the critical state of the French economy.

    The Dismissal of Turgot

    • Turgot was dismissed as finance minister on 12th May 1776.

    The Financial Reforms of Necker

    • Necker was appointed as finance minister after Turgot.
    • Necker abolished 386 venal positions in taxation and finance.
    • He also abolished 506 venal positions in the royal household, resulting in savings of approximately 2.5 million livres annually for the crown.
    • Necker restructured the management of the postal and transportation systems.
    • He also restructured the sale of timber from estates owned by the king.
    • Between 1777 and May 1781, Necker borrowed 520 million livres at significant interest rates.

    The Compte Rendu Au Roi and Necker's Resignation

    • In February 1781, Necker published the Compte Rendu Au Roi, a report on the state of the French finances.
    • Necker resigned in May 1781 after being rejected by Louis XVI as a minister.
    • Joy de Fleury was appointed to succeed Necker and implemented tax increases that raised 252 million livres.
    • The cost of the American Revolutionary War to France exceeded one billion livres.

    The Deteriorating Financial Situation

    • State revenue in 1775 was 377 million livres but expenditure was 411 million livres, resulting in a deficit of 34 million livres.
    • 37 percent of state revenue by 1786 was used to pay interest on loans.
    • By 1786, the deficit had risen to 112 million livres, almost a quarter of total state income.

    Calonne's Plan for Financial Improvement

    • Calonne presented Louis XVI with his Plan for the Improvement of the Finances on 20th August 1786.

    The Impact of Natural Disasters

    • A massive hailstorm in July 1788 destroyed the grain harvest in the area around Paris.

    Financial Crisis and Bankruptcy

    • The government suspended all payments to the bureaucracy, army, and requested repayment of loans from foreign countries in August 1788.
    • France declared bankruptcy in August 1788.

    The Resignation of Brienne

    • Brienne resigned as finance minister on 24th August 1788.

    The Growth of Expenditure

    • Total state expenditure had risen from 182 million livres in 1726 to 633 million livres in 1788.
    • In 1788, 41.2 percent of the annual budget was allocated to servicing the national debt.
    • By August 1788, only 400,000 livres remained in the treasury.

    Financial Crisis Leading Up to the French Revolution

    • 1776: Turgot dismissed as finance minister amid efforts to reform French finances.
    • Necker's Reforms:
      • Abolished over 890 venal positions in taxation, finance, and the royal household, saving the crown millions of livres annually.
      • Restructured key government services like the postal system and timber sales.
    • Growing Debt: Necker borrowed heavily to finance the American Revolutionary War, accumulating a large debt with high interest rates.
    • Compte Rendu Au Roi (1781): Necker's financial report highlighting the severe state of French finances.
    • Necker's Resignation (1781): Rejected by Louis XVI as minister, Necker resigns; his successor raises taxes significantly.
    • Financial Strain: By 1786, the French deficit reached 112 million livres, almost a quarter of total income. A large portion of revenue was used to service the national debt.
    • Calonne's Plan for Improvement (1786): Presented a plan to address the growing financial crisis but faced strong opposition.
    • 1788:
      • A devastating hailstorm destroyed crops near Paris, further exacerbating the economic situation.
      • The government declared bankruptcy, suspending payments to the bureaucracy and army.
      • Brienne resigned as finance minister in the face of mounting financial pressures.
    • Decades of Spending: France's total expenditure had increased dramatically from 182 million livres in 1726 to 633 million livres in 1788.
    • National Debt Burden: By 1788, over 41% of the annual budget was dedicated to servicing the national debt.
    • Dire Situation: By August 1788, the treasury had only 400,000 livres left, reflecting the dire state of French finances on the eve of the revolution.

    Dismissal of Turgot and Necker's Reforms

    • Turgot was dismissed on May 12th, 1776.
    • Necker abolished 386 venal positions in taxation and finance, and 506 in the royal household, saving the crown 2.5 million livres annually.
    • Necker restructured the post and transport system, as well as the sale of timber from royal estates.
    • Between 1777 and May 1781, Necker borrowed 520 million livres at high interest rates.
    • Necker resigned in May 1781 after being rejected by Louis XVI as a minister.
    • Joy de Fleury, Necker's successor, raised taxation by 252 million livres.

    Financial Crisis and the Reign of Louis XVI

    • War expenditure exceeded one billion livres.
    • In 1775, France's state revenue was 377 million livres, while expenditure was 411 million livres, resulting in a 34 million livres deficit.
    • 37% of revenue was allocated to servicing the national debt.
    • By 1786, the deficit reached 112 million livres, representing almost a quarter of the total income.
    • Calonne presented Louis XVI with his Plan for the Improvement of the Finances on August 20th, 1786.
    • A massive hailstorm destroyed the grain harvest near Paris on July 13th, 1788.
    • On August 16th, 1788, the government suspended payments to the bureaucracy and army, and requested foreign countries to repay debt. Bankruptcy was declared.
    • Brienne resigned on August 24th, 1788.
    • Total expenditure increased from 182 million livres in 1726 to 633 million livres in 1788.
    • In 1788, 41.2% of the annual budget was spent on servicing the national debt.
    • The treasury held only 400,000 livres in August 1788.

    Financial Crisis in France (1776-1788)

    • 1776: Turgot is dismissed as finance minister, highlighting the challenges of reforming the French financial system.

    • Jacques Necker (1776-1781):

      • Abolished numerous venal positions (positions sold for personal profit) in taxation, finance, and the royal household, aiming to reduce government spending.
      • Restructured the management of postal services and timber sales, potentially increasing efficiency.
      • Despite efforts, Necker borrowed heavily (520 million livres from 1777-1781) with high interest rates, adding to the existing debt.

    • 1781:

      • Necker published the "Compte Rendu Au Roi" (Account Rendered to the King) detailing the state of the finances.
      • Facing opposition from Louis XVI, he resigned in May.

    • 1781-1786:

      • Under Joy de Fleury, taxes were increased by 252 million livres, reflecting the impact of wars on the French treasury.
      • During the period, the debt was over one billion livres.
      • Even in 1775, the government already faced a deficit of 34 million livres, with a significant percentage (37%) of tax revenue allocated to servicing the national debt.
      • By 1786, the deficit had risen to 112 million livres, representing a quarter of total government income.

    • 1786:

      • Charles Alexandre de Calonne presented a plan to Louis XVI to improve the French finances, demonstrating the continuous need for reform.

    • 1788:

      • A disastrous hailstorm in July devastated the grain harvest near Paris, potentially exacerbating food shortages and social unrest.
      • Facing severe financial difficulties, the government stopped payments to its bureaucracy and military, requesting a foreign loan to cover the expenses. This effectively declared bankruptcy.
      • August: Brienne resigned as finance minister, highlighting the government's inability to address the financial crisis.
      • August 1788: France's total annual expenditure had skyrocketed from 182 million livres in 1726 to 633 million livres.
      • Approximately 41.2% of the annual budget was allocated to servicing the national debt.
      • The treasury had a mere 400,000 livres left.

    • The recurring financial issues and inability of the government to address the crisis contributed significantly to the increasing discontent and ultimately led to the French Revolution.

    Financial Crisis Before the Revolution

    • 1776: Turgot dismissed, a crucial figure in financial reform
    • Necker's Reforms (1776-1781):
      • Abolished over 800 venal positions (paid positions for sale) in taxation, finance and the royal household, generating significant savings.
      • Restructured key systems like postal services and timber sales.
    • Borrowing and Rising Costs:
      • Necker borrowed heavily (520 million livres) between 1777-1781, resulting in high interest payments.
      • The American War cost France over a billion livres.
    • Necker's Resignation (1781):
      • His Compte Rendu Au Roi (financial report) clashed with Louis XVI, forcing him to resign.
    • The Deficit Continues:
      • By 1786, the budget deficit had ballooned to 112 million livres (almost a quarter of revenue).
      • Over 37% of revenue was going towards loan repayments.
    • Calonne's Plan (1786):
      • Calonne, the new finance minister, proposed a plan for financial improvement.
    • A Year of Disaster (1788):
      • A massive hailstorm devastated the grain harvest near Paris, further straining the economy.
      • The government was forced to suspend payments, declare bankruptcy, and seek foreign loans.
    • Brienne's Resignation (1788):
      • Brienne, succeeding Calonne, resigned amidst financial turmoil.
    • Financial Breakdown:
      • Total expenditure rose from 182 million livres in 1726 to 633 million in 1788.
      • By 1788, 41.2% of the annual budget was dedicated to servicing the national debt.
      • The treasury was left with a mere 400,000 livres in August 1788.

    Financial Crises in France (1776-1788)

    • Financial mismanagement and growing debt: French finances had been in a precarious state for decades, with spending consistently exceeding revenue.
    • Turgot's dismissal: In 1776, Turgot, a reform-minded minister, was dismissed, highlighting resistance to financial reform.
    • Necker's reforms: Jacques Necker, appointed Finance Minister in 1777, attempted to address the financial crisis by streamlining government spending and abolishing unnecessary positions. He also restructured the management of the post and transport system and the sale of timber from royal estates.
    • High-interest borrowing: Between 1777 and 1781, Necker borrowed significantly to cover expenses, accumulating a large debt with high interest rates.
    • Compte Rendu Au Roi: In 1781, Necker presented a financial report to the king (Compte Rendu Au Roi), showcasing the precarious state of the French treasury. This transparency contributed to Necker's dismissal in the same year.
    • Wartime expenditure: The American Revolutionary War proved costly for France, further straining the treasury.
    • Growing deficit: By 1786, the French deficit had reached 112 million livres, almost a quarter of the total income.
    • Calonne's Plan: In 1786, Charles Alexandre de Calonne presented a Plan for the Improvement of the Finances to Louis XVI, which aimed to address the growing financial crisis.
    • Natural disasters and economic hardship: A massive hailstorm in 1788 heavily damaged grain harvests in the Paris region, contributing to economic hardship.
    • Government bankruptcy: Facing mounting debt and dwindling revenue, the government suspended all payments to bureaucracy and the army in 1788, effectively declaring bankruptcy.
    • Brienne's resignation: Minister of Finance Jacques de Brienne resigned in 1788, unable to address the financial crisis.
    • Escalating expenditure: The national budget had increased dramatically from 182 million livres in 1726 to 633 million livres in 1788.
    • Servicing the National Debt: In 1788, a significant portion of the annual budget (41.2%) was dedicated to servicing the national debt.
    • Treasury depletion: By August 1788, the treasury held only 400,000 livres, highlighting the severity of the financial crisis.

    Financial Crisis in France

    • 1776: Turgot dismissed, reforms failed to address financial issues.
    • 1776-1781: Necker's efforts to save finances included abolishing positions, restructuring systems, and raising capital through loans.
    • 1781: Necker resigns after being rejected by Louis XVI, resulting in increased taxation under Joy de Fleury.
    • 1775-1786: Expenditure consistently exceeded revenue, leading to a growing deficit.
    • 1786: Calonne proposed plans for financial recovery.
    • 1788: Severe hailstorm devastated crops around Paris, worsening economic hardship.
    • 1788: Government suspension of payments, bankruptcy declared, and a near-empty treasury.
    • 1788: Brienne resigns due to the worsening crisis.
    • 1726-1788: Total expenditure rose significantly, with a significant portion devoted to servicing the national debt (41.2% in 1788).

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    Description

    Explore the events surrounding the financial crisis in France during the late 18th century. This quiz covers Turgot's dismissal, Necker's reforms, accumulating debt, and the subsequent changes in government policies. Test your knowledge of the economic challenges faced by France during this tumultuous period.

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