France's Role In The American Revolution

In the American Revolution France directed its forces to assist the Americans. French aid was pivotal in compelling the British to surrender at Yorktown in 1781. However although the Americans gained much from France’s support it led to no substantial gains for France but it had accumulated a debt of 1,066 million livres. France could not solely rely on its revenue from tax to fund the war thus it frequently borrowed at high rates of interest. The American Revolution combined with the Seven and Nine Years’ Wars caused heavy expenditures for France, it wasn’t capable of raising funds to equate to the level of debt it had. Louis XV was naïve in believing that with the absence of a central bank France would have been able to reduce its debt, when in reality the wars were financed by

France had already devoted 25% of its budget to the army and navy and about 50% to pay off the debt, the further expansion was inevitably deemed to worsen the economic situation. Britain was also in debt as a result of the wars but Britain’s highly advanced fiscal organizations such as the Bank of England was able to compact the implications via low interest rates unlike the debt in France which was financed at twice the rate of interest compared to that of Britain. The unreformed and old fashioned fiscal institutions in France’s couldn’t resolve the debt like the more modern state of Great Britain. The fiscal negligence was a crucial factor in the French Revolution, if it abandoned its participation in the wars that led France to accumulate a substantial amount of debt it may have been able to avoid the revolution that was to