20-Financial and economic policies and problems

Taxation

Nap had to maintain high level of taxation because of the costs of war. Kept ‘contribution fonciere’ (land tax, provided bulk of government revenue) that he inherited from Directory
During Consulate, ‘contribution personelle mobiliere’ (tax on personal property e,g, servants and carriages) collected in urban areas.- brought in small amount of revenue, sometimes more costly than it was worth. Other direct taxes, including customs duties and fees for registration and services, continued as before.
Nap sought to increase revenue and to make collection more effective:
1807- Nap’s officials drew up new ‘cadastre’ (land register) to measure value of land in order to recalculate the land tax. Not only to make tax fairer but also to ensure that farmers who had increased value of their land paid more tax as a result. Compilation of new register took longer than expected- only 1/5 of country had been assessed by 1815.
From Sep 1803, following Paris, towns and cities were allowed to levy an ‘octroi’ on consumer goods entering their administration. Gradually replaced ‘contribution personelle mobiliere’
Tax collectors and inspectors appointed for each ‘departement’ and paid in proportion to taxes they collected. Their tax receipts were passed to receivers, who were subject to inspection of central government
Constitution of Year VIII established a commission to take responsibility for accounting of state revenue and expenditure. From this came 'Cour des Comptes’ Sep 1807: a central bureau for handling and auditing state’s finances. Kept detailed accounts of income and expenditure and ministries and had to have certified authorisation for release of money

However, due to continuous war, improvements in tax assessment and collection offset by cost of maintaining army and Empire. Government relied heavily on indirect taxes on goods. Taxes on salt, alcohol and tobacoo 4x- hit working class hard

Central economy
Money supply
In order for Nap to be stable and secure, he needed more reform. One of his 1st acts was to refuse honour agreements paid for in paper money- declared only legal tender was metal coinage
Jan 1800- established Bank of france- provide an institution that could provide credit for government and entrepreneurs. Had a small issue of paper money, restricted to use in Paris and limited to high value 500-1,000 francs- only to use for merchants. Was Directory’s idea but didn’t act on it
Main purpose was to produce and control a national currency of gold and silver coins. Its monetary control and responsible behaviour were a considerable boost to French economy and by controlling sale of government bonds ensured that Nap could raise loans at reasonable interest, by guaranteeing repayments. From 1808, sub-branches set up in other French towns where trade was growing and more cash fluidity was needed

Weights and measures- under directory these were regional. Nap passes laws to say that weight and measures were the same acrss france. Standardisation 1795 was not implemented consistently, Nap brings that consistency by 1804/05. Not perfect but better.

Economic Growth
Nap’s ministers, Chaptal brought in to help stabilise and expand economy- well behind Britain. He:
established a Bureau of statistics to gather data from ‘departements’ on population and condition of agriculture, commerce and industry
formulated the ‘societe d’encouragement pour l’industrie nationale’ in 1801, with himself as President. They offered prizes, published newsletters and held exhibitions of products of French industry
Established Council of Agriculture, Arts and Commerce in each of France’s ‘departements’
Established Chambers of Commerce in 23 of largest citiees in 1802 and ‘Chambres Consultatives des Arts et Manufactures’ in 150 of smaller urban areas in 1803

These increased mechanisation and technical innovation, particularly in mass-production of consumer goods. However, Nap more interested in luxury goods, reflected his regime better- some of Chaptal’s direction lost after he stepped down. Nevertheless, figures gathered by Montalivet, Minister of Interior from 1811-1812 are to be believed, France some industrial advancement. Wool increased its yield by 400%, exported silk rose in value from 26 million francs to 64 million francs between 1790-1812
Agriculture remained largest sector of French economy. Some regions saw major improvements- new large landowners developed estates and agricultural associations established to share ideas on new crops, animal breeding and scientific farming. However, much of France remained in hands of small peasant proprietors who could barely support own needs. Division of farms between surviving sons, supported by new Civil code, exacerbated problems, Elsewhere, tenant farmers reluctant to make improvements for fear of rent increases
Government encouraged growth of ‘replacement crops’ like cotton, coffee, dyes, tobacco and sugar, so as to avoid dependence on colonial production which was disrupted by war. Prefects ordered to ensure certain amount of land set aside for these. Jan 1813 import of sugar cane prohibited in order to stimulate home industry. Targets not met yet was effective, yet results not felt until after 1815. Some good harvests in early years of Consulate and Empire (excluding 1806), which helped increase feeling of prosperity, although conditions fell after 1809. Montalivet’s stats were positive- agriculture of france prospered so much that by 1812, it was able to export butter, cheese and veg oils, all of which were imported before revolution. However, prefects often reported favourable on the state of agriculture in their areas; but apart from some improvements in wine-production, hard to see widespread improvement

Impact of war and continental system
While demands of war stimulated production of armaments and other military supplies, this came at expense of peacetime industry and investment. Labour lost to army, which, reduced internal demand. Nap paid for his wars by tightening taxation, conscripting soldiers at low wages, taking out loans, selling land (sale of Louisiana to USA) and taking what he could from conquered territories. However, after initial success during Consulate, Empire never provided sufficient income to meet its own expenses
War had effects on french trade, particularly in West of country where British had blockade. Under Nap, trade moved away from Atlantic Ocean direction to France’s allies and conquered territories in continental Europe. Ports and industrial cities in W, e.g. Le Havre and Rouen hit badly, although Bordeaux suffered less. Maritime commerce in Mediterranean affected by British dominance at sea, and trade passing through Marseilles reduced.
From 1793, British goods prohibited from entering French territories. However, in 1806-07 Nap took this further, with decision to introduce a continental blockade, known as continental system, which banned all French trade with Britain and insisted that France’s allies and other neutral countries should follow suit- or be treated as enemies. This intensified economic warfare

Nap aimed to weaken Britain by closing its European markets, and so force it to sue for peace. Enable France to get its Atlantic trade back. He hoped to increase french trade and production to fill gap left by Britain’s inability to trade with continental Europe. This would replace france’s losses from decline of its Atlantic trade. System failed due to French Navy and Nap’s hold on the coastlines of Europe not strong enough to enforce it, smuggling thrived (despite 3x number of customs officials between 1797-1810). Sometime officials, ‘gendarmes’, and soldiers responsible for enforcing system indulged in illegal practices themselves. Included ‘contrabande’ (prohibited goods) and ‘fraude’ (trading in permitted goods but without paying duties)
British CA affected french producers, depriving them of much-needed raw materials. Colonial and wine trades hit particularly hard and products normally supplied by British (especially sugar, coffee) left in short supply. Nap was forced to allow some licensed trade with Britain as an additional way of raising funds from 1810- to offset french decline in customs receipts. moreover, Britain’s trade with North and South America more than made up for losses from British continental trade, so country was never ‘brought to its knees’ as Nap hoped

Degree of economic change
Limited demand because mass of population still tied to farming, heavily taxed and had a low standard of living
Industrial work unattractive since workers restrained by ‘livret’, there was a ban on trade unions and living conditions in towns and cities were poor. Joining army was a more attractive proposition for those seeking advancement
Limited incentive for expansion other than in war-based industries and opportunities for economic development curbed by loss of markets in war
France had no rich capitalist/bourgeoisie class with a desire to invest in industry. Bourgeoisie satisfied by acquisition of ‘biens nationaux’ and to be ‘in trade’ looked down upon
Communications in general remained poor (despite some improvements in road-building, which were for military purposes only)
Many farms small and unprofitable. State control of prices and food supplies (with restrictions on export of grain and maximum prices for bread and flour introduced in 1812) prevented bread riots in towns but gave little incentive to farmers to change

3 key individuals of economic management
Finance Ministry- Gaudin (1799-1814)- deals with taxes and revenues
Treasury- Barbe-mabois (1801-1806)- dealt with expenditure
Interior Ministry- Chaptal (1801-1814) organised other 2 and dealt with economic organisation