Wednesday, 4 May 2022

The General-Farm of Taxes

The General-Farm (or, strictly speaking, General-Farms) of Taxes was one of the most hated institutions of 18th century France.  It wa  responsible for the collection of the majority of indirect taxes, that is to say it controlled between 40% and 50% of the Crown's total tax revenue. Its operations extended throughout the provinces and  impinged to great or lesser extent on the lives of most ordinary Frenchmen.

An organisation of such a complexity clearly  poses many challenges of research.  According to  the historian of French customs administration, Jean Cliquart, writing in 2004, there is  much work still to be done, especially  at local level.  The major work of synthesis, is still the study by the American George T. Matthews, published as long ago as 1958 (now fortunately available on Open Library). The French scholar Yves Durand published a major thesis in 1971, but his consideration was largely confined to the General Farmers themselves.  

See: Jean Clinquart, "Ce que nous ignorons des fermes générales" In: Histoire institutionnelle, économique et financière : questions de méthode (xviie-xviiie siècles) (2004).  [Open access]  

To fill some of this gap, an online Dictionnaire de la Ferme générale (1640-1794), part of a wider project involving various different academic and cultural institutions, was launched in 2019. This has loads of information, but is a bit overwhelming to the casual visitor.

Dictionnaire de la Ferme générale (1640-1794)  ed. Marie-Laure Legay, for the  Institut de recherches historiques du Septentrion

What follows are my summary notes from a few accessible sources: 

The Financial Premise

As contemporary critics were quick to point out, the General-Farm was not a public agency, but  a  private monopoly.  At its apex stood the Compagnie des Fermier-Généraux, a syndicate of wealthy financiers, who negotiated a bail or lease from the Crown for the right to collect  taxes. The Company  retained as profit any revenues collected in excess of the lease price.  In 1726, when  its position was consolidated  by Fleury, the Farm comprised the receipts of the gabelles (salt monopoly), the traites (customs duties), the aides (sales taxes) and the domaines (king's seignorial rights and registry taxes). The tabac, or tobacco monopoly was added in 1730.  

The Farmers - who numbered no more than sixty individuals at any one time -  assumed the risk for any variations in tax revenue.  They operated on a basis of joint and unlimited liability: each Farmer contributed an equal share of capital and enjoyed an equal share of the profits.  Leases were negotiated on six year circle, with each contract traditionally given the name of adjudicataire or lead member of the syndicate. (Hence Mercier's maliciously satirical portrait of Nicolas Salzard, the little man with a knotted wig, who had advanced the King of France 160 million livres:  see Tableau de Paris, 1781

Administration of the Farm

The centre of operations was the imposing Hôtel des Fermes in the rue-de-Grenelle in Paris, where the senior Farmers met and the main offices were based.  Organisation was divided between affairs common to the General Farms, and a series of bureaux de correspondance which maintained communication with the Provinces. The Farmers themselves were actively involved in day-to-day operations:  in theory each Farmer participated in a series of strictly scheduled, overlapping assemblies (comités) - though in practice, the majority made only token contributions.  The most important of these bodies was the comité des caisses, which acted as the intermediary with the government and negotiated the leases. George Matthews, the historian of the Farm, notes that this structure tended to be top-heavy and cumbersome, and to encourage institutional inertia; nonetheless, there was scope for enterprising individuals.  Farmers assigned to supervise the bureaux de correspondance, were often key figures - an energetic man could exercise considerable initiative over policy in this role (Matthews, p.216)  

In the final years of the Ancien Régime direct government supervision was increased. In 1778, for the first time since Colbert, Necker placed agents of the Ministry of Finance in the Hôtel des Fermes.  An intendant de finance now met regularly with the assemblée des caisses.  In 1780 four premiers commis given wide powers of audit and inspection over four receipts remaining in the General Farms.  Members of the Farm such as Jacques Delahante, Paulze, Lavoisier, De la Borde, Parseval were affected by the prevailing spirit of renovation and readily took on the role of senior financial advisers to government. "By the time of the Revolution the General Farms had ceased to be an autonomous province; it was recognised to be in fact what it had always been in law, a part of the royal fiscal service". (Matthews p.205)


Bernard Lepicié, The courtyard of the Customs house (1775)
Museo Thyssen-Bornemisza, Madrid  [Wikimedia]

This painting was commissioned from Lepicié by the abbé Terray.  A stagecoach has just entered the courtyard of a customs house, followed by a heavy waggon of merchandise pulled by six horses. The commis unload various bales and barrels for inspection.  The architectural details are fanciful, so the location is probably not intended to be specifically the Paris customs in the rue du Bouloi  - though the Cours de Fermes was certainly an important stop for the Paris stage coach.

At regional level, the administration of the Farm was a truly mammoth undertaking.   Apart from the military, the Farm was "the largest employer and organiser of manpower in eighteenth-century France" (Matthews, p.207)   By general consensus it was also one of the most highly organised and effective.   The staff were not venal office holders but professional functionaries (Technically, the commis des fermes, those directly employed by the Farm, were royal officers - this category included all officials,  clerks, tax collectors and guards). 

Hostile public opinion tended to exaggerate the number of the Farm's employees fantastically.  Critics listed the tax collectors in hundreds of thousands and spoke of "hordes" and "armies" of commis des fermes.  The best available figures, those of Lavoisier, indicate 29,500 employees in 1774; Mollien estimated 30,000 in 1780.  (These figures exclude the brigades of guardsmen, I think.)

The fundamental administrative unit in the provinces was the direction, which in geographical terms corresponded roughly to a royal generality.  In 1763 there were 123 overlapping directions. Administrative and policing personnel were usually shared for gabelles, tabacs and traites, indeed, by the later 18th century the salt and tobacco monopolies were generally treated as a single unit.  Aides and domaines, however, remained distinct.  The Provincial Director had power of attorney from the Company of General Farmers.  Matthews (p.188) notes that this role was an onerous one, with  detailed and rigid procedures to follow and formidable requirements for reporting and statistics.  The Directors were also often heavily embroiled in local legal proceedings. 

To improve supervision the Company had introduced a system of regular inspection.  Six to eight Farmers-General were dispatched from Paris each year  to observe, verify and report back on activity in the provinces.  These  tours of inspection were extensive and rigorous: See Matthews,  p.199-200:  the tourneurs would spend much of their time in the saddle and would travel accompanied by a cavalcade of fifteen to eighteen men. 

The Crown delegated extensive policing powers to the Farm.  In order to enforce the salt and tobacco monopolies, the Farm relied on a huge paramilitary force, which, in the last twenty years before the Revolution, numbered over 20,000 men. For the gabelles and tabacs, particularly in areas bordering the pays rédimés or francs where the weight of taxation did not apply, the Director was "forced to act as a kind of commander of the financial militia in a ceaseless campaign against the smugglers" (Matthews, p.188) The Farm's brigades had almost unlimited and arbitrary rights of search and seizure.  Salt smugglers were heard by a separate court and faced brutal punishment.  As late as 1783, over 200 men were condemned to the galleys for smuggling. The former employee of the Farm, François-Nicolas Mollien saw the Farm's army of employees as itself "a heavy tax" on the nation, but one which was the unavoidable result of regional autonomy and  multiple tax jurisdictions (Mollien, Mémoires vol. 1,  (1898) p.648)

Who were the Farmers-General?

According to J.F. Bosher in his classic history of French public finances, the Farmers General acquired a new discrete identity in the 18th-century, following  the confirmation of their position in 1726:

  "Until the reign of Louis XV tax farmers were an indistinguishable part of a large, fluctuating group of businessmen, variously called traitants, partisans, financiers or gens d'affaires. These continued to flourish until the Revolution, but in the reign of Louis XV the Farmers General became a group apart, wealthier and more firmly established, monopolising official business."

[Bosher, French finances 1770-1795: from business to bureaucracy (1970) p.8]

Fermier - Pierre Faventines de Fontenilles;
pastel of 1768  by Jean Valade  [Wikimedia]

The wider social and cultural identity of the individual Farmers was the subject of a monumental thesis by Yves-René Durand,  published in 1971.  His main conclusions were as follows:

1. This was a relative open élite.  Between 1726 and 1791,  223 different individuals can be identified, representing 156 families. Although there were some financial dynasties, two-thirds of the Farmers were first-generation.  They were not the sons of lackeys as their enemies maintained, but almost half  came from bourgeois financial and commercial backgrounds. The Farm was seen as a means of entry into the nobility. Only 10% remained routuriers, whilst 43% achieved full noble status. They became more fully integrated into the high nobility by ties of marriage. 

2. The Farmers wielded considerable power as a "pressure group". Although royal government often threatened the Farm with reform, the Crown was dependent on it for a substantial part of  its income.  Farmers secured social leverage through marriage alliances, or financial services to the Court nobility.  Some were intimates of the King and his ministers - indeed Louis XV himself personally invested in the Farm (Individual Farmers frequently had recourse to croupiers, sleeping partners, to raise capital; when a list published in 1776 the public were scandalised to find that the King, Mme de Pompadour and Mme du Barry were all among their number). 

The prestige of finance as a whole was especially high in period between 1726 and the Seven Years War,  when Madame de Pompadour consistently exercised influence on the side of the senior Farmers and their allies, the Pâris brothers. Nonetheless, the power of the Farm persisted throughout the century -  immediately prior to the Revolution they were able to secure Calonne's appointment as Finance minister. 

3. Members of the Farm occupied the pinnacle of the pyramid of "finance"; they were perhaps the richest group of all.  Yves Durant calculated that, on average, their  estates were worth  more than 3 million livres.  The nature of their assets was strikingly modern; they invested in land and property only as befitted their noble status; most of their wealth was in "mobile capital", invested in the Farm itself or other financial ventures. In their economic behaviour, they represented a progressive élite of wealth and talent. 


Was the profit excessive?

Two main charges were levelled against the Farm, that its profits were excessive and  that its collection methods were unnecessarily brutal.   Since the negotiations of the Farm with royal government were often acrimonious,  it was widely perceived that the Farm extracted huge profits at the expense of both the Crown and the people. 

The true figures uncertain, since many of the financial records are lost.  The available evidence has been marshalled by George Matthews  (p.262-72) and, more recently, by   Eugene White. in the Journal of Economic History for 2004.

No two authorities agree on the profits of a single lease, let along the whole series from 1726-1786. However, the Company suffered no significant loss on any lease; indeed the consensus is that profits rose steadily throughout the century in line with economic growth. According to Matthews,  "up to 1749 there can be little question that lease prices were held at abnormally low levels by virtue of the ignorance, indifference, or connivance of interested high government officials" (p.266)  Estimates of the profit made during the six years of the Lease Carlier (1726-32)  vary widely, but  Lavoisier in 1774 put the figure at  25 million livres, which White considers broadly accurate.  The Lease Girandin of 1749  added another 10.5 million livres to the lease price.  White's reworking of the figures for the Lease Henriet  (1756-62) shows that the Farmers could run great financial risk, as profits dropped drastically during the Seven Years War.   The Crown's financial problems also encouraged it to increase the capital advance demanded from the Farm, from 8 million livres to 92 million livres for the Alaterre and David leases.  This was in effect a forced loan.. Nonetheless, in the thirty-one years prior to 1780, a period of war and state bankruptcy, the profits of tax-farming continued to mount from lease to lease, both in absolute quantity and in rate.

In the final fifteen years, under Turgot and Necker, the conditions of the leases were substantially altered.  From the Lease David in 1774,  the Crown negotiated a percentage of the profit from the Farm. In 1780 with  the Lease Salzard, Necker increased this revenue sharing element to 50% and changed part of the lease to a fixed-wage contract (a régie)  The aides and domaines  were placed under a separate administration,  leaving to the Farm the salt and tobacco monopolies and customs duties.  The number of Farmers was also reduced from sixty to forty.   In 1783 the customs duties were also reorganised into a régie (with the Farmers serving as the régisseurs).  Thus indirect taxes were either governed by a mixed  rental/revenue-sharing arrangement or they were collected by officials paid a fixed wage.  However, there is no reason to believe that the Company became less profitable; indeed Matthews speculates that the final Lease Mager of 1786 promised to be the most profitable of all. 

Lavoisier, Delahante and Mollien - all put the average income of each Farmer under the Lease David at 300,000 livres per annum.  Eugene White does not think this is wildly out of line with other members of the elite - Parisian notaries, for example, could earn 80,000 livres in a year.  I'm not sure I'm convinced  - many tax farmers appeared, and undoubtedly were, excessively rich. 

White also asks the crucial question:  Did the tax-farm contribute to the financial collapse of the Ancien Régime?

Such queries are always speculative. However, Write concludes that,  had the Crown be able to switch entirely to a wage contract and obtain most of the profits of the Mager Lease of 1786, it might have gained another 20 million livres in revenue.  When the deficit stood at 100 million livres by the mid-1780s, "such a loss was not insignificant" (p.654)


George T. Matthews, The Royal General Farms in eighteenth-century France (New York, 1958)

Yves Durand, Finance et mécénat : les fermiers généraux au XVIIIe siècle, 1976. Reviewed by Jean Sentou, AHRF 208 (1972, p.288-91.

Eugene N. White,  "From privatized to government-administered tax collection: tax farming in eighteenth-century France", Economic History Review, 2004, 57(4):p.636-63.

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