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Chapter 138: Saving and Investing
🕑 Added 2024-12-15 19:05:47 +0000 UTCChapter 138: Saving and Investing
The famous American five-star general Douglas MacArthur once said, "The world's great, but Dad is the greatest." When Dad calls, it takes top priority.
Joseph sighed, glanced at the carriage, and gestured to Emon, "Let's head to Versailles. We can read the letters on the way."
"Yes, Your Highness."
Soon, several carriages left the Bureau of Industrial Planning.
Inside the carriage, Joseph opened the letters one by one.
The letters were from his three "white gloves" who were purchasing grain overseas. To maintain secrecy, they were written in code.
Joseph took the codebook from Emon and painstakingly deciphered the letters.
The "white gloves" reported on their progress in grain purchases, which was generally positive. In the first two batches, they had bought nearly 70,000 setiers of grain, 10,000 setiers of corn, and over 30,000 setiers of potatoes from the UK, North Africa, and Eastern Europe.
A setier was a common unit of measurement at the time, equivalent to 4.43 bushels. The exact weight of the grain varied depending on the type, as a bushel was a volume measure.
In practice, a bushel of grain might weigh about 45-50 pounds, while a bushel of potatoes might weigh 55-60 pounds.
In other words, the "white gloves" had already bought nearly 20 million pounds of grain from around the world.
And, following Joseph's instructions, they had first spent money in each location to find influential locals to spread news in the papers that the year was expected to be a bumper harvest, with a potential surplus of grain. With the harvest still far off, people readily believed this.
As a result, local grain prices began to drop, and the "white gloves" moved in to buy once the prices dipped slightly, leaving as soon as they began to rise. So, the grain they had bought, over 10 million pounds of it, was mostly acquired at or below market price.
Joseph calculated in his head. At this rate of purchase, by July, before the hailstorms hit, they could secure around 500 million pounds of grain.
This alone wouldn't be enough to survive a major famine, but with nearly a third of France's provinces now growing potatoes, which wouldn't be destroyed by hail, the overall grain yield would significantly increase.
Together, these measures should ensure the country gets through the winter. As for next year... that would have to be dealt with later.
Of course, there was still the issue of the state needing enough money to buy these 500 million pounds of grain.
Sure enough, the latter half of the letters mentioned that the funds from the first two disbursements were nearly depleted, and they requested that the Prince release additional funds as soon as possible.
They also inquired where the grain currently stockpiled at the port of Le Havre should be transported.
Joseph rubbed his temples; transportation was another major headache. Ultimately, it all came down to money.
In this era, transportation was notoriously poor. Even the cheapest river transport would double the price of grain.
He recalled reading in Varenne's report that nearly half of the 5 million livres allocated for potato purchases in Alsace and Lorraine had been spent on transportation.
And this was with government orders for local governors to provide full cooperation—otherwise, costs would have been even higher.
Speaking of river transport, Joseph suddenly remembered that this year's drought could cause some waterways to dry up, forcing grain to be moved by land, which would increase costs several times over.
Historically, the Feuillant faction tried many methods to alleviate grain shortages in Paris by requisitioning grain from the provinces. But because of the exorbitant land transport costs, they couldn't bring it into Paris quickly enough.
Parisians' lack of bread was a key factor in the Feuillant's downfall.
So, the grain at Le Havre needed to be moved as soon as possible while river transport was still viable.
But that would cost even more money.
Joseph calculated that the upcoming Paris Fashion Week should bring in some income, but it wouldn't be enough to cover the shortfall.
The Paris Angels Company's revenue, much of which now went to support the Prince's Guard, left only about 200,000 livres per month.
The paper mill was still under construction and wouldn't generate profits for at least three more months.
The wine industry was bringing in some patent fees, but not much, and it wasn't yet the main season for production.
The industrial development zone in Nancy was a money pit, requiring constant investment with no returns in sight.
As he watched the cityscape pass by the carriage window, Joseph sighed inwardly. Money was much easier to spend than to earn.
It seemed he would have to focus more on both generating revenue and cutting expenses.
In terms of revenue generation, he was already doing what he could. Most of his projects required significant investment and had long payback periods, making it difficult to see immediate returns.
Another option was what all the great European powers were doing—expanding colonies.
Since the Age of Exploration, colonies had been cash cows for European powers, providing vast resources and markets for their products during the early stages of the Industrial Revolution.
Colonial expansion was an essential path for any nation seeking wealth and power.
France's current financial woes were largely due to the loss of its vast colonies to Britain after the Seven Years' War, causing a sharp drop in overseas revenue.
Joseph naturally began considering potential areas for colonial development.
The Far East was out of the question for now. Historically, France didn't reenter the region until nearly a century later, after completing its industrial revolution.
Most of the Americas were already under British or Spanish control. While the region was rich, it was too far away, making it difficult to project power there. For now, France would be lucky just to maintain its Caribbean colonies.
Looking around, he realized that North Africa, historically France's choice, still seemed the most practical option.
North Africa was close to France, had vast fertile lands, and was home to the strategically crucial region of Egypt. Controlling Egypt and developing the Suez Canal could give France significant leverage over Britain, allowing France to take the strategic initiative. [Note 1]
But... Joseph frowned. Britain saw France as a mortal enemy, watching every move closely. Any sign that France was moving on North Africa would provoke British intervention. Historically, Napoleon's campaign in Egypt saw his supply lines cut off by the British almost immediately after landing.
So, any move on North Africa would have to be made with the utmost secrecy...
He pondered this for a long time but couldn't find a satisfactory solution, so he shelved the idea for the time being.
Since generating revenue in the short term seemed difficult, Joseph turned his thoughts to cutting expenses.
He considered France's major expenditures and was shocked to discover that the biggest outlay was interest on the national debt.
France was paying over 200 million livres in interest each year!
If he had that money, the famine, industrial development—everything—could be addressed.
But the debt agreements were all meticulously documented, and the interest would only continue to grow over time.
Joseph knew that in just two years, the French government would be paying over 400 million livres in interest annually...
Note 1: In 1788, the Suez Canal had not yet been developed. Trade routes between Asia and Europe had to pass around the southern tip of Africa via the Cape of Good Hope, a journey of over 10,000 miles. The Suez Canal route would cut that distance in half to just 5,000 miles. Control of the Suez Canal would therefore mean control of European trade routes.
(End of Chapter)
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