USA HISTORY

Detailed explanation-1: -half of the country’s annual budget. The American Revolution [1775-1783] cost France 1.3 billion livres. By 1789 France’s total debt was 4 billion livres or $40 billion. France was on the verge of bankruptcy with no means to pay.

Detailed explanation-2: -Jacques Necker, finance minister from 1777 and 1781, had largely funded France’s war effort through loans. As a result the state debt ballooned to between 8 and 12 billion livres by 1789.

Detailed explanation-3: -A rapidly growing population had outpaced the food supply. A severe winter in 1788 resulted in famine and widespread starvation in the countryside. Rising prices in Paris brought bread riots. By 1789 France was broke.

Detailed explanation-4: -But when the grain crops failed two years in a row, in 1788 and 1789, the price of bread shot up to 88 percent of his wages. Many blamed the ruling class for the resulting famine and economic upheaval. On top of that, peasants resented the gabelle, a tax on salt that was particularly unfairly applied to the poor.

Detailed explanation-5: -The French Crown’s debt was caused by both individual decisions, such as intervention in the American War of Independence and the Seven Years’ War, and underlying issues such as an inadequate taxation system.