Q- How did American war of Independence add more debt to France.
Answer- At that time, France helped America a lot in its war of Independence against Great Britain, This is because both American and France have same enemy Britain. That’s why France sent troops to attack against Great Britain in American war of Independence and supported over 13 colonies of America. This process is enough expensive and France is already suffering from state of crisis as their Royal treasury is empty. So, that France had to borrow money from other countries that leads to debt of 1 billion livres (French currency) with very high interest on France. In this way American war of Independence add more debt to France.
There are some other reasons behind increase in debt of France. These are given below:
- Louis 16 (King of France) has no idea to handle all three estates of France that is why we imposed taxed on only third estate people.
- The maintenance of Versailles in France is very costly that drained Royal treasury of France.
- The money lender (who lend money to France) started charging a very high interest rate of their money that is about 10 percent.