In 1774, Louis XVI of the Bourbon family of kings ascended the throne of France. He found an empty treasury. The causes for it was
(i) Long years of wars had drained the financial resources of France. The condition was served when under Louis XVI, France helped the thirteen American colonies to gain their independence from Britain.
(ii) The king's court at the immense palace of Versailles was extravagant. A huge amount of money was required for its maintenance.
(iii) Taxes were levied only on third estate and exempted first and second estates which were rich.
(iv) The war with Britain added more than a billion livres to a debt that had already risen to more than 2 billion livres.
(v) Lenders who had given the state credit, now began to change 10 per cent interest on the existing loans. So, the French government had to spend an increasing percentage of its budget on interest payment.

1 france helped thirteen American colonies to free from britian 2 the king live luxurious life

Causes of the Financial Crisis in France

There were several reasons behind the financial crisis in France that Louis XVI encountered upon his accession in 1774. These factors can be categorized into three main areas: excessive spending, ineffective taxation system, and economic mismanagement.

Excessive Spending
- French involvement in costly wars: France had participated in various wars, including the Seven Years' War and the American Revolutionary War, which drained the treasury.
- Extravagant royal lifestyle: The French monarchy, including Louis XVI and his queen Marie Antoinette, lived a lavish lifestyle and spent extravagantly on palaces, courtiers, and luxurious goods.
- Costly court expenditures: The royal court at Versailles was a center of opulence and extravagance. The expenses incurred in maintaining the court, including salaries, pensions, and allowances for courtiers, added to the financial burden.

Ineffective Taxation System
- Tax exemptions for the nobility and clergy: The nobles and clergy enjoyed numerous privileges, including exemption from most taxes. This meant that the burden of taxation fell heavily on the common people, leading to growing resentment.
- Inefficient tax collection: The tax collection system in France was inefficient and corrupt. The tax farmers, who were responsible for collecting taxes, often exploited the system for personal gain, resulting in a significant loss of revenue for the state.

Economic Mismanagement
- Poor agricultural practices: France relied heavily on agriculture, but outdated farming techniques and inefficient land distribution led to low productivity and economic stagnation.
- Rising national debt: Over the years, France accumulated a substantial national debt due to borrowing for wars and other expenses. The interest payments on the debt further strained the treasury.
- Economic downturn: In the late 18th century, France experienced a series of poor harvests, resulting in food shortages and rising prices. This further worsened the economic situation, as people struggled to afford basic necessities.

Overall, the combination of excessive spending, an ineffective taxation system, and economic mismanagement led to a severe financial crisis in France by the time Louis XVI ascended the throne in 1774. This crisis would eventually contribute to the growing discontent among the French population and play a significant role in triggering the French Revolution in 1789.