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Advanced Placement (AP), 15.01.2021 01:30 PluggedIn
Without a doubt, the king’s revenues are derived from a part of the goods and money his subjects accumulate through their labors, by the fruits they harvest from the earth, and by what their industry gains for them. Everything that the people accumulate is divided into three parts: first, what they can set aside for their subsistence and their small savings; second, for their lord who is the owner of the land they cultivate; third, for the king. This is the normal distribution. But when authority is at the level where Your Majesty has put it, it is certain . . . that the people, who fear and respect the royal authority, begin by paying their taxes [to the king] and have little left for their own sustenance, and pay little or nothing to their lords. And since the people need at least something before they think of meeting their tax obligations, and since these taxes must always be proportionate to the amount of money people have, the financial administration . . . must make every effort and [use] all Your Majesty’s authority to attract money into the realm, and to distribute the money throughout the provinces so that the people have the ability to live and pay their taxes.
. . . the well-being and economic recovery of the people depend on apportioning what they pay into the public treasury with the amount of money that circulates in commerce. This ratio has always been 150 million livres [in circulation] to 45 million livres.1 [in taxes and expenditures] . . . But at present it appears that there are no more than 120 million livres in public commerce . . . and that taxes and expenditures are at 70 million livres. As a result, it is in excess by a wide margin, and as would be expected, the people are falling into great misery.
It will be necessary to do one of two things to stop this evil: either lower tax obligations and expenditures, or increase the amount of money in public commerce. For the first, taxes have been lowered already. . . . For the second, it consists of three parts: increase money in public commerce by drawing it away from other countries; by keeping it inside the kingdom and keeping it from leaving; by giving the people the means to make a profit from it.
The livre was the basic unit of the French currency.
What is Colbert suggesting to the king of France about finances?
a. He suggests that the king should invest profits into France to make even more money.
b. Colbert is trying to convince the king that farming is the best way to gain profits.
c. He is saying that the best way for France to create revenue is to get income from other countries.
d. Colbert is attempting to institute a manufactured-based economy, which would ultimately be owned by the king.
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