Chapter

Borrowing to the Limit

Guy Rowlands

in The Financial Decline of a Great Power

Published in print October 2012 | ISBN: 9780199585076
Published online January 2013 | e-ISBN: 9780191744600 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199585076.003.0005
Borrowing to the Limit

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Declining tax revenues forced the French monarchy deeper and deeper into debt in the War of the Spanish Succession. As the 1690s and 1700s wore on the direct tax agents and the farmers general floated more and more short-term loans, using their own credit and the revenues they collected as pledges, but the interest rates charged were relatively high. It was not until 1710 that the receivers general for direct taxes were organised into a more solid consortium for better managing credit flows. Through the Paris city hall and other corporate bodies the government also floated vast numbers of long-term rentes, fairly illiquid annuity bonds, to cover the bulk of the debt. Most costly of all, though, were the contracts the king entered into with rapacious financiers to raise money through venal offices: these were largely in the form of new positions and forced loans on existing officials.

Keywords: short-term debt; long-term debt; bearer bills; annuity bonds; venality

Chapter.  10465 words. 

Subjects: Modern History (1700 to 1945)

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