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The Sun King‘s Red Book of Household Accounts – Versailles wasn‘t such a Squander

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Keeping books of account is an effective means of preventing debts, and for this Ursula Kampmann can give you a historic example. She knows of a ruler who balanced his state budget by means of a housekeeping book bound in red leather. You will be surprised when you hear his name - It was Louis XIV of France, the Sun King.

 

 

 

Alright, I’ve just installed this new app in order to monitor my expenses. Doing so, I belong to a minority. At least this is what I’ve read. Only 18 percent of German households are said to account on a cash basis. The fact that 10 percent of all Germans are in debt may have something to do with this.

Well, keeping books of account is an effective means of preventing debts, and for this I can give you a historic example. I know of a ruler who balanced his state budget by means of a housekeeping book bound in red leather. You will be surprised when you hear his name.

It was Louis XIV of France. Yes, you’re right, the Sun King.

Louis XIV had not always been the Sun King. When he came to power, he was a little boy of only four years. The courtiers of course took advantage of that.

There was the Minister of Finance, Nicolas Fouquet, for instance. He was the protégé of Cardinal Mazarin who conducted government affairs on behalf of Louis XIV.

Both men deemed it important that there was always sufficient money available to pay the current expenses. Mazarin wasn’t really interested in how Fouquet acquired that money.

Fouquet resorted to a popular trick. He borrowed money from private investors and paid back the loans with dear interest when the taxes had been paid. By that, the real state income remained a mystery, while there was no getting through the mess of local and national taxes, customs and fees anyway. Even after the death of Mazarin, Fouquet still felt safe in his office because he absolutely was sure that he was the only one who could make sense of that complicated number jumble.

Nevertheless there was a second one: Colbert. He had a knack for numbers, and he had noticed that Fouquet had secretly caused a massive deficit. He got the King’s ear. Together, they covertly worked towards Fouquet’s fall.

Famous d’Artagnan came in person to arrest Fouquet. And the King decreed that his former Minister of Finance should be imprisoned for the rest of his life. The man who had built the castle Vaux-le-Vicomte spent the last 16 years of his life in a cell in the fortress of Pignerol.

Hardly surprising considering the fact that Fouquet had pocketed almost half of the French state revenue over the course of several years.

Fouquet left behind debts, heavy debts. The day he got arrested, the entire income of the current year was already spent, plus 26 million livres in advance of the 1662 state budget. Not forgetting the unsettled accounts, amounting to 9.5 million livres.

This is where the little red housekeeping book comes in. There, the Sun King recorded all revenues and expenditures with his own hand. At one single glance he could tell immediately and exactly how much money remained in his treasury. Louis XIV was economical. As a result, the French budget was soon the soundest in all of Europe.

In 1664, the revenues amounted to 63,602,796 livres. The expenses added up to 63,071,008 livres. The resulting surplus was merely half a million livres, but still!

Thanks to his little red book, Louis also kept an eye on the budget in respect of his building programs. He didn’t incur any debts for Versailles. All costs were covered by the annual state budget.

The entire building project, including the expensive gardens, consumed 25 million livres of a state budget that added up to 26 billion livres over the years Versailles was built. This means that the building costs made less than one percent of the state budget over the years.

Thus, Versailles didn’t wipe out France financially. Another thing deserves credit for that. Louis XIV began to engage in war. And the profits became smaller, the losses bigger. Take 1706, for example. That was a pretty normal year in the War of the Spanish Succession.

In that year, the annual budget was increased to 220 million livres. The revenues, in contrast, only added up to 50 million livres, so that Louis XIV was forced to incur debts of 170 million livres in that year alone.

Louis’ new Minister of Finance, Michel Camillart, had no alternative than to fall back on the tactics of Fouquet and take out loans, at excessively high interest rates.

No wonder, then, that on his deathbed Louis XIV advised his successor: “Do not imitate me in my passion for war and for building, but try to remain at peace with your neighbors.”

Strictly speaking, he shouldn’t have mentioned his passion for building. That he certainly could not blame for the disaster.