51 Efforts at Financial Reform
22.2.4: Efforts at Financial Reform
Facing severe financial crisis, Louis XVI appointed three ministers who tried progressive reforms but failed under the pressure of opposition from the privileged classes of the society.
Learning Objective
Compare the efforts made by French finance ministers under Louis XVI to revitalize the French treasury
Key Points
- While the later years of Louis XV’s reign saw serious economic setbacks, it was not until 1775 that the French economy began to enter a true crisis. With the government deeply in debt, Louis XVI was forced to permit radical reforms. He felt unqualified to resolve the situation and surrounded himself with experienced finance ministers.
- Anne Robert Jacques Turgot was appointed Controller-General of Finances in 1774. His radical reforms met with fierce opposition although they were praised by intellectuals. His attacks on privilege won him the hatred of the nobles and the parlements; his attempted reforms in the royal household, that of the court; his free trade legislation, that of the financiers; and his views on religious tolerance that of the clergy.
- Marie Antoinette disliked Turgot for opposing the granting of favors to her proteges, which played a key role in the end of his career.
- In 1777, Jacques Necker was made director-general of the finances. His greatest financial measures were the use of loans to help fund the French debt and increasing interest rather than taxes. In 1781, he gave the first-ever public record of royal finances, but the statistics were completely false. In light of the opposition to reforms, Louis forced Necker to resign. Although he was recalled twice, he failed to introduce effective reforms.
- In 1783, Louis replaced Necker with Charles Alexandre de Calonne, who increased public spending to buy the country way out of debt. Knowing the Parlement of Paris would veto a single land tax payable by all landowners, Calonne persuaded Louis XVI to call the Assembly of Notables to vote on his referendum.
- Calonne’s eventual reform package consisted of five major points: cut government spending; create a revival of free trade methods; authorize the sale of Church property; equalize salt and tobacco taxes; and establish a universal land value tax. All the proposed measures failed because of the powerlessness of the crown to impose them. Under the pressure of the opposition, Louis XVI dismissed Calonne in 1787.
Examples
Key Terms
- Assembly of Notables
- A group of high-ranking nobles, ecclesiastics, and state functionaries convened by the King of France on extraordinary occasions to consult on matters of state.
- estates of the realm
- The broad orders of social hierarchy used in Christendom (Christian Europe) from the medieval period to early modern Europe. Different systems for dividing society members into estates evolved over time. The best-known system is the French Ancien Régime (Old Regime), a three-estate system used until the French