Napoleon's Economy and Finance
Napoleon's Economy and Finance
Finance and The Bank of France
One of the most important reforms introduced by Napoleon was the creation of the Bank of France on 6 Jan 1800 - it survives to this day!
Although the bank was a private bank with its own shareholders, it was given a range of public functions such as the sole right to issue paper notes
The aim was to improve the efficiency of the state's finances.
A risky business venture in 1805 threatened the stability of the new bank
In order to boost state finances, a scheme aimed at importing silver from Mexico to Spain and then on to France was arranged. It even involved agreement from the British
When the scheme ended in failure, Napoleon, in order to avert a more serious crisis, imposed stricter controls on the bank
Inflation linked to the assignat - clear reminder to Napoleon of the problems an unstable currency could pose
On 28 March 1803, he introduced the franc de germinal - became the basis of his monetary system
The new gold and silver coins established a standard ratio of gold to silver at 1:15.5
Each one-franc coin would weigh five grams of silver
Other denominations would be minted in strict proportion to this
This reform gave France the most stable currency in Europe at that time. It would remain the basis of France's currency for the next 120 years
secure source of income so people likely to invest in government
carefully monitoring budget/spending and income
minister of finance 1799-1814- responsible for collection of taxes and revenues
in change of the treasury 1801-1806- loaning and balancing the budget + gov expenditure.
The early financial reforms introduced were:
A much clearer division of roles between the ministry of finances (which oversaw collection of taxes and revenues) and the treasury (which dealt with government expenditure)
The reorganisation of both direct and indirect tax collection
The first steps in establishing a public banking system
The main source of government revenue continued to be the land tax. A much ore detailed tax register detailing those eligible to pay was drawn up. More efficient land registers listing ownership helped to ensure that the amount paid was spread more evenly.
Although the system was reformed and stabilised the amount raised remained constant at some 250 million francs a year until 1813, which represented 29% of government revenue
One of Guadin's most important reforms was to remove the assessment and collection of direct taxation from the control of local authorities and form a central organisation to undertake the task
A more dramatic increase in revenue came from indirect taxes.
Many of these had been abolished by the Constituent Assembly
With mounting deficits, the Directory had reintroduced indirect taxes on certain goods
Napoleon centralised the collection of duties by creating a Central Excise Office in 1804
Among the goods and services taxed were tobacco, alcohol, items made from gold and silver, playing cards and public transport
In 1806, salt was added to the list - similar to the hated gabelle of the Ancien Regime
Revenue from indirect taxes increased by over 400 percent between 1806 and 1812, and was considered a much easier way of making up any shortfalls in government revenue from direct taxes
It is estimated that by 1813, revenue from all indirect taxes accounted for possibly 25% of the government's revenue
Directory - using outdated land owning records to decide tax. Napoleon redoing this, trying to improve existing system but doesn't have time to assess who owns what land
able to balance the budget initially. main source of income - indirect tax, adds to what was reintroduced by the directory
unpopular with working class
Econimic state of France by 1799
reduced pool of loans for gov, people who can afford (bourgiosie) it are unwilling to lend money to gov, foreign countries don't want to invest in france cos at war.
mandat failed, counterfeit leads to inflation
budget balanced, pillaged conquered terriorites, but not a sustainable souce of income, balanced budget limited in longevity
tax on windows and doors, richer bourgeoisie not happy, the richer you are the more you pay.
The years of revolution and Terror had hit hard at the nation's economy and Napoleon's Minister of the Interior, Jean-Antoine Chaptal was brought in to help stabilise and expand this sector, which was lagging well behind Britain
Chaptal's contributions included:
The establishment of a Bureau of Statistics to gather data from the departements on population and the condition of agriculture, commerce and industry
The formation of the ;Societe d'Encouragement pour l'Industrie Nationale' in 1801. This offered prizes, published newsletters and held exhibitions of the products of French industry
The establishment of Councils of Agriculture, Arts and Commerce in each of France's 'departements'
The establishment of Chambers of Commerce in 23 of the largest cities in 1802 and Chambres Consultatives de Arts et Manufactures in 150 of the smaller urban areas in 1803
Chaptal's encouragement increased mechanisation and technical innovation, particularly in the mass-production of consumer goods
However, Napoleon himself was more interested in luxury goods, which he felt reflected better on his regime
If the figures gathered by Montalivet, the Minister of the Interior from 1811 to 1812, are to be believed, France saw some industrial advancement
According to his report of that year, the wool industry increased its yield by 400 percent
How effective were N's financial and economic policies?
was napoleon successful in financing his armies?
expenditure and income were carefully monitored and recorded.
Bank of France regulated money supply
paper money was abandoned in favour of metal currency
bank of france eventually taken into state control
indirect taxes and customs dues were increased to inject money into the treasury
how successful was n in enforcing centralised contorl of F
prefects were key to admin in provinces