Introduction

The primary role of the Royal Navy in the First World War was to protect seaborne commerce and communications, and there was no greater challenge to the flow of oceanic trade than Germany's unrestricted submarine campaign of 1917–18. Since the wars with Louis XIV the protection of trade had been critical to England's national survival, with the Western Approaches and English Channel the decisive maritime theatres. William III crossed the English Channel at the beginning of the War of the League of Augsburg, and the privations of Spanish, Dutch and French commerce raiders during the War of Spanish Succession were so significant that the newly created United Kingdom was forced to introduce compulsory convoys in 1707. The defence of trade was no less significant for the conduct of distant colonial campaigns during the Seven Years War, and the protection of merchant shipping necessitated a strict convoy policy during the American Revolutionary War. The Act of 1798 once again granted the Admiralty the power to enforce the convoy system on oceanic merchants, and indeed it was control of these vast supply lines, and the mobilization of capital and credit this enabled, that contributed so profoundly to victory against Napoleon's Empire.

The legal basis for the protection of oceanic trade, and the rules of engagement for maritime warfare, became codified during what Stephen Cobb described as the new ‘liberal age of free trade’ that emerged in the decades following the Congress of Vienna. Privateering was abolished by the 1856 Declaration of Paris and the rights of neutrals during a naval blockade reinforced by the 1907 Hague Conference and the 1909 Declaration of London. Warships engaged in trade interdiction were expected to follow prize law, necessitating basic consideration for the crews of captured ships and assuring the safety of passengers.6 By 1914 the Royal Navy's conceptualization of trade defence had transitioned from the traditional 18th century combination of convoy escort and close blockade to a geographically globalized laissez-faire model that provided for the security of oceanic communications and trade routes through command of the sea.

Introduction

Part III outlined the weaknesses of the measures that were intended to ensure paymaster accountability and the challenges that the crown faced in gathering the information that would have better enabled it to control the activities of the trésoriers. Part IV argues that a mismatch between the navy's funding needs and the structure of its financing mechanism developed over the course of the seventeenth century. It investigates the organisational expedients that were deployed by the crown in managing the office of trésorier as both purchasable property and as a means of mobilising private access to credit. Chapter Nine begins by considering the long-term consequences of efforts to improve the effectiveness of the naval treasury in the first half of the seventeenth century, particularly during the ministry of Cardinal Richelieu when he built his power base in maritime affairs. In doing so, the chapter principally draws upon the archival research of Henri Legohérel and Alan James, but it examines the ramifications of their findings in the light of the naval treasury's eventual failure in the War of the Spanish Succession. Chapter Ten then outlines the pattern of office ownership that was encouraged during Louis XIV's reign and examines how the naval treasury developed in a way that was incompatible with the demands of funding the navy when it mobilised for war in the 1690s. The consequence of treating the office of trésorier as a marketable investment was that the French navy came to rely on the financial strength of only one trésorier until 1692, and that the financial rewards of acting as trésorier were structured in a way that secured office values but failed to indemnify officeholders against the rising costs of naval warfare.

The cumulative effects of overspending and underfunding, as well as the extent to which the trésoriers were limiting payments according to their personal financial situations, caused the navy to become cash-flow insolvent over the course of 1707 to 1709. The diminishing levels of liquidity had disastrous consequences for naval procurement, and the inability to acquire essential materials translated short-term funding issues into years of operational paralysis. Procurement was a lengthy and complex process that drained the trésoriers’ cash and involved an extensive network of suppliers who relied on a schedule of regular payments in advance of delivery. This was particularly the case in the arms industry, where cash was needed to finance large capital investments. For example, a munitions order with the St Gervais foundry, which supplied Toulon's arsenal with 73 cannons, required 72 per cent of its value acquitted at least four to five months before the first consignment of cannons was delivered in October 1706. However, as the trésoriers had to devote a disproportionate amount of resources and time to addressing unsettled debts from previous exercices, the navy could no longer afford or keep up with these upfront payments and regular disbursements that contractors required. Increasing interruptions in the settlement of procurement bills damaged suppliers’ confidence and created further dysfunction: for instance, in two comparable deliveries of hemp from Auvergne to Nantes and Rochefort during the exercices of 1705 and 1706, the delay between the initial and final payments of the orders grew from nine to 22 months. Moreover, when the suppliers were paid, they increasingly received illiquid credit instruments that became untradeable as faith in the trésoriers’ credit eroded. Contractors thereafter sought cash guarantees or the ability to bypass the trésoriers and deal directly with the crown's revenue agents, but as these demands became prohibitive, naval administrators were left unable to sign many suppliers to new contracts, even with the enticement of price increases. This left the navy in an ‘unfortunate state’, as Pontchartrain described the situation in the spring of 1707, and contributed to a precipitous drop in procurement spending, which fell 44 per cent from 9.6 million l. to 5.4 million l. between 1705 and 1707.

The availability of cash to the navy was significantly reduced during the exercice of 1707.

This chapter provides an essential overview of the wider financial environment in which the French navy was administered under Louis XIV. In outlining Louis XIV's financial position, it focuses attention on the reasons behind increased military expenditure between 1701 and 1713 and investigates how overspending affected France's revenue-raising system. While the monarchy's financial position was unsustainably leveraged to the point of collapse to meet the costs of war, Louis XIV's revenue-raising system demonstrated a degree of adaptability and resilience in finding ways to shift the burden of debt onto fiscal stakeholders and corporate bodies. However, reliance on fiscal and financial intermediaries in the crown's taxation and expenditure systems would lead to a power imbalance between the state and its agents as office-holders engaged in increasingly risky practices to meet the crown's fiscal demands and spending needs. The chapter gives further evidence for Guy Rowlands's recent corrective that the French monarchy's fiscal problems were expenditure-driven rather than the issue being a limited revenue-raising capacity, thus providing a more accurate context to Louis XIV's growing inability to fund his navy.

Costs of War, 1701–13

The prolonged nature and geographic extent of Louis XIV's military mobilisations over the course of the Nine Years’ War and the War of the Spanish Succession inflicted enormous financial strain upon France, burdening the monarchy with accumulated debts of at least 1.5 billion l., as estimated by a printed état de dépense (statement of expenses) in 1721. In addition, the capital invested by provincial and Parisian elites in interest-bearing offices would have likely stood at a net 666 million l. in 1721 after 454 million l. worth of liabilities were wiped out following the suppression of certain offices and augmentations de gages in the years surrounding the Chambre de justice in 1716. The crown's total financial liabilities in 1720 therefore stood at an estimated 2.2 billion l., which represented a nine-fold increase on debt levels in 1683, assessed at 240 million l. at the time of Jean-Baptiste Colbert's death. Unsurprisingly, the debt amassed during the final decades of Louis's reign was overwhelmingly generated by military expenses, with the naval treasury and the army's financing arm, the Extraordinaire des Guerres, accounting for at least 51 per cent of total expenditure, reaching nearly 3.5 billion l. between 1689 and 1707, according to Forbonnais's figures.

Between the late 1660s and early 1690s, the French navy underwent significant operational and administrative expansion. Naval minister and contrôleur général (finance minister) Jean-Baptiste Colbert (1665–83) and later his son, the marquis de Seignelay (1683–90), presided over a series of naval reforms in an effort to match Anglo-Dutch naval strength. Rebuilding the navy required not only the construction and acquisition of ships, but also the creation of a naval supply chain, investments in ports and arsenals at Toulon, Brest, and Rochefort, the formation of a conscription system to supply the navy with over 40,000 sailors, and the oversight of a centralised, commission-based administrative system of maritime intendants and commissaires, the king's agents in the ports with a broad array of responsibilities. While Colbert's navy was built on a network of ‘fisco-financiers’, where administrative and subcontracting roles were often conflated, the growth of Louis XIV's navy echoed, it would seem, a wider determination by the king to reassert monarchical sovereignty and establish firm royal control over the armed forces.

With impressive speed, the navy increased in size and sophistication over the course of three decades, expanding from 18 ships in 1661 to 132 rated warships by January 1692. By 1676, when it gained an important victory over a combined Spanish-Dutch fleet at Palermo during the Franco-Dutch War (1672–78), the navy demonstrated its importance as an instrument of war by enabling the French monarchy to project its military power and influence beyond its immediate reach. The offshore bombardments of Algiers (1682–83), Genoa (1684), and Tripoli (1685) underscored not only the strategic value of a standing fleet, but also the devastating effect with which it could be deployed. On the surface, the results of the Colbertian naval reconstruction programme were decisive. France had a fleet capable of challenging the Anglo-Dutch navies both in terms of warship tonnage, and for relative strategic dominance of the Mediterranean between 1676 and 1693.

Yet, as the French navy reached the apogee of its numerical and operational strength during the Nine Years’ War (1688–97), Louis XIV's government was forced in 1694–95 to drawdown the fleet. The decades-long revival of the French navy came to a halt as fleet operations were suspended and Louis XIV's larger rated warships, emblematic of royal prestige and dynastic might, were laid up in Brest and Toulon. By 1695, the Atlantic fleet was no longer operating.

Introduction

Part II established the importance of the naval trésoriers to the crown's ability to fund the navy and outlined the financial risks of their responsibilities. Part III highlights the weaknesses of the financial controls in place to oversee and regulate the activities of the naval treasury in the 1700s. Chapter Six begins by outlining the three levels of accountability to which the trésoriers were theoretically subjected and then underscores how ineffective these accountability measures became when war strained the state's organisational capacities. Chapter Seven examines the challenges of holding the trésoriers to account in wartime as the naval administration failed to manage the flow of financial information. Chapter Eight then outlines the scale of misappropriation and fraudulent activity that certain trésoriers perpetrated. In practice, the trésoriers had long operated in an accountability void under Louis XIV. However, by the War of the Spanish Succession, the crown's inability to exercise tight control over the trésoriers’ operations allowed the trésoriers to prioritise their own financial positions over the navy's financial needs and prevented ministers from identifying financing problems as they developed.

The financial officers who constituted the naval treasury, the trésoriers généraux de la Marine, were an integral part of the navy's system of finance. Alongside the trésoriers of the Extraordinaire des Guerres, the navy's trésoriers were some of Louis XIV's most important paymasters, whose operations uniquely spanned virtually all of France's provinces and interacted with the wide range of industries and manpower resources that the navy relied on. Situated in the Marais and the quartier Richelieu in Paris, these office-holders were tightly integrated into the administrative and financial hub that financed and sustained the crown's military enterprises: these were the same locations where the administrative and social elite had established their grands hôtels, and leading officers, bankers, and financiers conducted their business. In the 1690s and 1700s, the growing indispensability of the position of trésorier to the navy's funding was the direct result of Louis XIV's increasingly expensive war effort and the deteriorating fiscal resources he could rely on to fund his military activities.

The fundamental purpose of the navy's paymasters was to fund the navy's operations by matching the royal revenues designated for its consumption to the navy's myriad expenses. Responsible for managing the navy's accounts, these comptables effectively operated as a central clearing house by receiving the navy's share of the crown's income and disbursing these funds on the government's request. Once the navy's funding allocation was decided at the start of the year, the authority to arrange payments to the navy's creditors resided principally with the king. Once aware of the specifics of the navy's needs, the secrétaire d’État de la Marine (naval minister) operating out of the naval bureau in Paris was responsible for drawing up a series of ordonnances de paiements, or payment orders, which then would have been presented to the contrôleur général des finances (finance minister) and, subsequently, the king for countersigning before they were issued to the trésoriers. The ordonnances de paiements formed the basis of a trésorier's operations, directing him to remit money to payees in the ports and other localities throughout France. Without possession of one of these payment orders, the trésorier was strictly forbidden from moving royal funds to acquit costs.